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Does Rainbow Capitalism Hurt Brands?

Over the past few years, it has become standard for companies to don rainbow-themed logos during the start of June. This tradition is the root of Rainbow Capitalism, where companies pander to the queer community to boost their public image.

However, Rainbow capitalism has come under fire over the past three years. Between companies pulling out of Pride Month due to backlash and large corporations donating to anti-LGBTQ+ politicians in secret, many fear that tokenization has erased the true meaning of Pride. While businesses large and small still celebrate Pride, many worry that their efforts undermine real progress.


What is Rainbow Capitalism? 

According to LGBTQ and All, Rainbow capitalism “is the action of companies claiming to support LGBTQ+ causes and communities, but are actually making merchandise for-profit and capitalizing on the trend.” Retailers like Target and Bud Light have played major roles in normalizing Rainbow capitalism: while changing the colors of a logo or releasing a line of t-shirts helps the brand’s bottom line, it does little for real people.

Rainbow on a screen reflecting off an iPhone with a rainbow Apple logo

Case in point: in 2023, Target was subjected to intense backlash from homophobic shoppers over their Pride merchandise. Customers knocked down Pride displays, threatened workers, and posted disturbing videos online. In response, Target pulled the merchandise and shoved it back into the proverbial closet. Bud Light faced similar threats when it partnered with transgender TikTok star Dylan Mulvaney. While the collaboration occurred well before Pride month, the impact was clear: Bud Light suffered a 13.7% decline in sales as right-wing influencers called for a boycott. This year, Bud Light, known for their outlandish, but well-meaning, Pride month campaigns, has gone quiet on social media

Like all forms of capitalism, Rainbow capitalism is exploitative. When companies sell Pride-themed t-shirts, mugs, and nail polish, Pride becomes less about activism and more about consumerism. But ignoring Pride or giving in to the demands of homophobic consumers also sends a message: corporations only care about Pride when it’s profitable. 

The Bottom Line 

So, does Rainbow capitalism hurt brands? The short answer is yes. Larger companies like AT&T, which publicly celebrate Pride but donate to anti-LGBTQ+ politicians, risk scandal and criticism on the national stage. Smaller companies might lose entire sales demographics. While many brands might need help to walk the line between genuine support and tokenization, balance is possible.

For example, companies like Abercrombie & Fitch support the community year-round. Abercombie & Fitch was named one of the Best Places to Work for LGBTQ+ Equality in 2022 by the Human Rights Campaign; the brand has one of the strongest Diversity and Inclusion initiatives in the industry. Additionally, the brand has an extensive record of activism. For the past ten years, Abercrombie & Fitch has partnered with the Trevor Project, the leading suicide prevention and crisis intervention organization for LGBTQ+ young people. To date, they’ve raised over $5 million for the charity; this year, they’re donating $400,000 to the Trevor Project, regardless of sales.

But how can companies emulate their success? The answer is simple: brands must support the LGBTQ+ community year-round. Showing support can take many forms, such as creating policies or events that promote Diversity, Equity, and Inclusion (DEI), offering more inclusive products and services, or partnering with local LGBTQ+ organizations.

Here are five ways businesses can support the queer community throughout the year:

1. Hire (and Support) Diverse Staff

Prior to 2020, one in ten members of the LGBTQ+ community were unemployed. That same year, the Williams Institute found that queer adults were more likely to be living in poverty than their straight counterparts. Therefore, one of the easiest ways to support the LGBTQ+ community is through employment. 

But it’s one thing to say you’ll hire diverse staff and another to ensure it happens. Thankfully, committing to diversity is easy. Companies can outline DEI goals at the start of each quarter; additionally, businesses can eliminate gendered language in recruitment ads to attract diverse hires. Finally, organizations can hire through professional LGBTQ+ recruitment events.

Once your company hires diverse staff, you’ll need to support them. A 2016 study found that implementing formal policies that prohibited the mistreatment of these minorities prevented altercations in the workplace. Workplace inclusiveness should also be a part of the training and onboarding process to set the tone for a respectful environment. 

2. Volunteer and Donate

According to the National Network for Youth, LGBTQ+ teens have a 120% greater chance of experiencing homelessness and a higher chance of mental health challenges. Queer adults face similar challenges; adults are twice as likely to experience homelessness. Businesses can make a significant impact on the community by raising money for nonprofits.

Donating to LGBTQ+ charities, such as The Trevor Project or GLAAD, throughout the year is an excellent way to support the community. Additionally, giving employees time off to volunteer with grassroots organizations is another way to support the LGBTQ+ community. 

3. Create Authentic Ads

In 2017, Hornet, the leading gay social network outside the United States, released a study that analyzed the efficacy of LGBTQ-themed advertising on queer consumers. Hornet found that LGBTQ-inclusive advertising can raise profits by 40%. Additionally, buyers were 66% more willing to recommend the brand to others. In short, creating authentic ads can demonstrate your company’s support for the LGBTQ+ community while authentically promoting your brand.

4. Partner with Queer Brands

Partnering with local LGBTQ+ organizations is a great way to show support for the community. Sponsoring (or participating) in Pride parades, drag shows, and other events combines activism with marketing. Smaller businesses can partner with influencers or nonprofits who support the community.

Brands that want to be at the forefront of innovation and creativity should actively engage with the community. Beyonce honored the queer community in her 2023 album Renaissance; the Met Gala pulled from queer fashion with their 2019 “Camp: Notes on Fashion” theme. Companies with a large audience can honor their audience by partnering with gay-friendly travel destinations, cities, and event venues.

5. Adjust Your DEI

If you haven’t already, update your Diversity, Equity, and Inclusion policies (also known as DEI) to reflect a diverse workplace. For members of the LGBTQ+ community, DEI initiatives contain policies that help them thrive in the workplace. Inclusive benefits (such as specific needs related to medical coverage or bereavement) and an emphasis on gender-neutral language are excellent starting points. DEI should also include mandatory diversity training for new hires, along with added support for employee resource groups. 


Showing support for the LGBTQ+ community after Pride can take many forms. From DEI initiatives to eschewing Rainbow capitalism, there are many ways to demonstrate your company’s values to customers. How will your business celebrate diverse populations this Pride month (and always)? Let us know in the comments.


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