Cause marketing or cause related marketing are terms used to describe a strategic partnership between a for profit and non profit organization. Support is given to a charitable cause in such a way that it also promotes the business interest or image of the for profit company.
This style of marketing is relatively new. One of the first campaigns started in 1979 with the Famous Amos Cookie Company. Company founder and owner Wally Amos became the national spokesperson for the Literacy Volunteers of America from 1979 until 2002 when they merged with the Laubach Literacy Council to create ProLiteracy Worldwide.
American Express also launched a cause marketing campaign in 1983 for the restoration project of the Statue of Liberty. The pay off for American Express was huge. As a result of the promotion consumers increased their usage of the America Express Card by a whopping 28%! With this type of result you can bet most marketing departments of major corporations in America took more than a slight interest in this new way of promotion.
Today these consumer targeted joint ventures between the business world and the nonprofit arena are a $1.3 billion business!
Cause Marketing and Nonprofits
Nonprofits for the most part have always had to operate under a “do more with less” mentality. There is a constant concern there is not enough money to do the job at hand. Many organizations also struggle with the lack of human capacity to do all the jobs needed to be done. Most nonprofit organizations are led by unpaid volunteers who have only a limited amount of time they can offer. Regardless, the paid staff are expected to operate the organization in a business like manner on a shoe string budget. This is enough to drive anyone to look for an easier answer.
The Promise: Easy Money.
The Price: Just let us use your name. Sit back and relax, the PR guys will do all the work.
So what is in a name? “According to the Cone Millennial Cause Study in 2006 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with a “good cause”. The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that companies for be “good corporate citizens”.
For years I’ve been telling nonprofits to be careful. Read: Be Cautious! Don’t Prostitute Your Good Nonprofit Name. Unfortunately, the local version of this marketing idea totally exploits the “good name” of the local nonprofit and in almost every instance the professional fundraiser leaves with well over 50% of the money raised.
I know there will be a group of folks reading this article that will shrug their shoulders and can’t see any real harm in this type of joint promotion. After all, if you use the standard measurement of success it looks to be a win/win situation, right? My question is where does it end? Likewise are long term relationships built or is this a short term fix?
Other donors might actually be discouraged into giving because all the extra PR might make it seem all your money concerns are taken care of because you are partnered with this large corporation.
DISCLAIMER: This information is not intended to provide legal or accounting advice, or to address specific situations. Please consult with your legal or tax advisor to supplement and verify what you learn here.