Guest Author - Tricia Krietzberg
In this tragic economy, when both corporations and charities have seen a decline in profits and donations, cause-related marketing seems to really be catching on. But what is “cause-related marketing?” It is a business strategy involving a partnership between a company with a product to sell and a charity with a cause to advance. As opposed to “corporate philanthropy,” which simply involves a company making a tax-deductible charitable donation, cause-related marketing benefits both the company (by helping to increase sales, and therefore, profits), and the charity (by bringing in donations and calling attention to the cause.)
Funny thing, but this marketing tactic is nothing new. It dates back to the early 1980s when Wally Amos of “Famous Amos Cookies,” built his brand through a very strategic connection to Literacy Volunteers of America. In more recent times, you have the Susan G. Komen Foundation and its huge success with corporate partnerships that have yielded millions of dollars in the sales of “pink” items. And, though it does not involve a marketing partnership with a corporation, the sale of Girl Scout cookies has always been the number one way Girl Scouts of the USA raises funds.
You wouldn’t think there could be anything bad about buying a product that sends a percentage of the profits to a charity. Yet, like anything else in this world, there is an air of controversy surrounding these types of programs.
First, there are critics who say it is inherently against the concept of “charitable giving” to tie it to a purchase. That is certainly a valid point. However, there are hundreds of corporations out there that donate millions of dollars to charity without any strings attached. And, then of course, if companies are going to sell their products anyway, and they are willing to share a little bit with a charity, what’s wrong with that?
The second argument against these cause-related programs is that they involve millions of promotional dollars to generate a small percentage of donations. The RED campaign, started by Bono to help raise funds to fight AIDS in Africa through the sales of red products and specific merchandise, has generated much controversy. There are critics who say that the RED campaign has spent way more to promote the program than it generated in charitable donations. Yet, in its defense, the RED campaign explains that it spent $40 million in promotional dollars and earned $50 million in profits, with half of all profits going to the Global Fund. That’s $25 million dollars to support the cause! Honestly, who cares how much they spend to promote a program that raises money for charity?
In my mind, I see it as the proverbial one hand washing another. I don’t think any argument against cause-related marketing is strong enough to ignore the strategy. If I’m buying a product anyway, I love the fact that part of my purchase is going to something important. Will I switch brands just to make a charitable donation? I might. Why not? The company wins, and the charity wins. I’d like to see more of these “Buy One, Give One” programs. I like the new meaning of the phrase “BOGO.” Don’t you?
Check back next week to see Part II in my cause-related marketing series to catch some of the latest examples of these charitable programs that you can check out for yourself. Better yet, subscribe to the BellaOnline Charity newsletter, and the next article will land in your in-box automatically.
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