7, No. 2, May 2006
Cause Related Marketing: The Gift that Keeps on Giving?
by Inger L. Stole
University of Illinois at Urbana-Champaign
the 1980s, consumers have witnessed the rapid proliferation of
a new form of marketing: a hybrid between product advertising
and corporate public relations. Cause Related Marketing (CRM)
aims to link corporate identities with nonprofit organizations,
good causes, and significant social issues through cooperative
marketing and fund-raising programs. As a tax-deductible expense
for business, this form of brand leveraging is an attempt at connecting
with the consuming public beyond the traditional point of purchase
and to form long lasting and emotional ties with consumer constituencies.
However, what might seem like a fair exchange between corporation
in search of goodwill and non-profits in search of funds also
raises a range of troubling social, political and ethical questions.
efforts fall under six broad headings. The first four relate to
standard corporate practices. These are: advertising (where
a business aligns itself with a particular cause and uses its
advertising to communicate the cause's message); public relations
(attracting press and public attention to the a strategic partnership
between a business and a non-for profit group); sponsorship
(corporate sponsorship of a particular program or event); licensing
(the corporation pays for the license to use a charity logo on
its products or services); and direct marketing (both business
and non-profit raise funds and promote brand awareness).
A fifth type
of CRM is facilitated giving, where the business partner
help facilitate customer donations to the charity....or to themselves!
The ongoing effort by Ameren, an Illinois energy supplier, is
a good example of this practice. Included in their monthly bills
Ameren customers receive a plea for donations to the corporation's
"Warm Neighbor" program, a fund established to help Ameren customers
who are unable to pay their utility bills and/or weatherize their
homes. While the energy supplier contributes an unspecified amount,
its good deed is largely to facilitate the generosity of its customers
by mailing out information, collecting and distributing the funds
(www.ameren.com, 2006). Lost (or deliberately obscured) is the
fact that customers are asked to help other customers settle their
debts to Ameren. Other utility companies use the same strategy.
A few years ago, then SBC Ameritech, launched a program called
"Bridge the Digital Divide," to provide people with basic computer
knowledge using the same collection strategies (SBC Ameritech,
and most widely used CRM practice is purchase-triggered donations.
This is where a company pledges to contribute a percentage or
set amount of the purchase price from a product to a charitable
cause or organizations (Adkins, 2001). A campaign to restore the
Statue of Liberty and Ellis Island that American Express undertook
in 1983 is credited as the blueprint. Promising to contribute
one cent for every card transaction and $1 for every new card
issued during the last quarter of 1983 to the cause, American
Express collected $1.7 million for the restoration effort. The
causes were not the only benefactors, however. The 28 percent
increase in use of the American Express cards and the massive
press coverage and free publicity bestowed on the company as a
result of the campaign were nice benefits (American Express, 2003).
The results were not lost on others. Between 1990 and 1999, American
companies spent increasing amounts on CRM and the total annual
sum has now passed the one billion dollar mark (Bishoff, 2000/2001;
Good Deeds, 1999).
Due to their
largely non-controversial nature, certain causes attract more
than their share of attention from businesses. Among the early
and well-known national campaigns of national significance was
Visa's 1997 "Read a Story" campaign where Visa pledged a donation
to a group called "Reading Is Fundamental" for each cardholder
transaction (Pringle and Thompson, 2001). Today, CRM efforts involving
the educational arena have become more elaborate. Take, for example,
Upromise, a program involving major companies like Exxon Mobile,
Coca Cola, McDonald's and New York Life Insurance. Each time a
parent, grandparent or other caring adult patronizes one of the
over 20,000 grocery or drug stores, more than 40,000 retail stores
and services, more than 8,000 restaurants and over 350 online
retailers affiliated with the program, rents a car from Avis,
or buys or sells a home with one of the real estate companies
affiliated with Upromise, he or she can request that a portion
of the amount be deposited to college savings account established
in a child or grandchild's name. The size of the contributions
varies. While a few participants pledge as much as 10% of the
purchasing price to the program, most donate 1 percent. Thus,
in order to earn $1,000 for college, relatives and friends must
purchase close to $100,000 of goods and services and provide the
participating companies with a great deal of valuable demographic
information in the process (www.upromise.com 2006).
1982 to "eradicate breast cancer as a life-threatening disease."
the Susan G. Komen Foundation has developed into one of the most
visible fund raising organizations for cancer research and has
become a favorite charity for CRM efforts. Its annual "Race for
the Cure," has evolved into what might be the largest ongoing
sports/fund-raising event in the country. More than most non-profits,
the Komen Foundation is actively involved in marketing the event
to companies in search of CRM ventures. This year, close to twenty
large companies, including Kellogg's, Yoplait yoghurt, Pier 1
Imports, Re/Max Real Estate, and American Airlines are members
of the organization's Million Dollar Council. In addition to paying
a million dollars for the right to serve as official sponsors
in connection with the annual race, they are also devising separate
CRM efforts to highlight their connections to the cause. Yoplait,
for example, has pledged to donate 10 cents for each of the first
30 million yoghurt lids it receives from customers to the Komen
Foundation. Not to be outdone, Kellogg's promises to send a pink
ribbon heart pin to every customer who donates 5 dollars to the
Komen Foundation and mails proof of the contribution along with
two purchase labels from specially marked cereal boxes. Also partnering
with Komen is BMW. The automaker has developed an elaborate scheme
to benefit the Susan B. Komen Foundation (and possibly itself).
As part of a campaign called "Ultimate Drive," BMW promises to
donate $1 to the Komen Foundation for each mile of test driving
during a particular period and to donate a percentage from the
sale of its "Pink Ribbon Collection" of watches, T-shirts and
notebooks to the Susan G. Komen Breast Cancer Foundation. (www.komen.org,
2006). For anyone doubting the marketing power of breast cancer
awareness, I recommend a trip to any department store during October
"the official Breast Cancer Awareness month." The sheer number
of manufactures who adorn their products with pink ribbons (the
official symbol) and offer to donate a share of the profits from
their transactions to the cause is overwhelming.
a company deliberately ties its identity so closely with its CRM
efforts that, by design or pure coincidence, it appears akin to
a non-profit outfit. The activities of Working Assets, a for-profit
company headquartered in San Francisco, is one example. As a self-described
"socially responsible long distance telephone and credit card
company," Working Assets donates one percent of customers' telephone
charges and 10 cents for each credit card transaction it processes
to nonprofit organizations working for peace, human rights, economic
justice, or the environment. An annual ballot listing participating
organizations is sent to customers who determine the ultimate
allocation of the unrestricted general-support grants. In 1986,
during its first year, Working Assets donated $32,000. Eleven
years later, donations had reached nearly $3 million annually
and by 2005 about $4 million. Today, the company claims to have
donated a total of $50 million to various causes thorough its
CRM efforts. (www.workingassets.com).
As new technologies
emerge, CRM efforts follow. One example is various "giving malls"
that have sprung up on the Internet. Since 1997, for example,
iGive.com has offered customers the opportunity to shop from the
over 400 merchants connected with its site and to direct up to
39 percent of every purchase (although typically around 3 percent)
to more than 18,000 causes that often are local chapters of larger
national non-profit organizations. Considering their numbers,
the individual checks are often small but the small checks have
a geographical reach. The chance to be associated with a good
cause is not lost on retail giants like Amazon.com, L.L Bean,
Barnes & Noble, Office Max, eBay and Dell computers, who all participate
in the program. During its 9 years in existence iGive.com has
helped distribute nearly two million dollars to a total of 30,000
charitable causes (iGive.com, 2004).
glance, CRM appears to be a win-win situation for businesses and
non-profits alike. Charities get needed funds, while businesses
get to bask in the glory of having performed good deeds. Judging
from its popularity, business has clearly embraced the concept
and few non-profit organizations are turning the private sector
away. This does not mean that a practice of merging marketing
and social problems is without problems. Although cause-related
marketing may do a wonderful job in collecting funds for the affiliated
charities, it should not be forgotten that social causes, in desperate
need of funding, may venture into partnerships that are far from
equal and sometimes hold the potential of harming more than helping
it. Because cause-related marketing is driven by the need to increase
a firm's return on its investment, it goes without saying that
causes are not always selected on the basis of the potential good
that can be achieved but, rather, on the free publicity and increased
sales a particular affiliation might bring to a company. In fact,
and this is particularly true when it comes to business alliances
with the larger non-profits, cooperation can bring free publicity
and many public relations opportunities, thus saving advertising
and promotional expenses for the business involved. The latter
may also gain access to the non-profit's clientele, staff, trustees,
and donors, all of whom are potential customers. Such access makes
non-profits with large memberships especially attractive to many
companies (Andreasen, 2001). Not-for-profit groups that serve
valid social functions but do not fit a corporate profile or appeal
to the customer group that businesses want to reach, may be ignored
while other causes, because they serve as better marketing vehicles,
receive a disproportional amount of interest (Polonsky and Woods,
2001). Working Assets is the exception that proves the rule.
imperative behind CRM is well known in marketing circles. In February
2006, "The Luxury Institute," an outfit claiming to represent
"the sole independent voice of the wealthy consumer," surveyed
households with over $5 million in personal wealth and $200,000
in annual income to determine which non-profit organizations these
people liked. "Habitat for Humany;" "America's Second Harvest."
and St Jude's Hospital topped the list followed by a slew of charities,
most of them involved in health related work and research. The
findings were not lost on The Cause Marketing Forum, a New York
outfit designed to facilitate partnerships between business and
non-profits who responded enthusiastically to the survey findings.
As in all other forms of marketing, companies desire to reach
the most affluent group of consumers and it will be very interesting
to see how this study might influence the choice of causes to
be targeted for CRM efforts in the future (www.causemarketingforum.com).
of leaving support for non-profit organizations to a market driven
system where their chance of funding is hinged on their ability
to complement sales messages leaves a lot to be desired. Often,
the most controversial charities, with the least chance of being
adopted for cause-related schemes, may be conducting some very
important work. Think, for example, what a difference it might
have made if American Express in 1983 had chosen to highlight
AIDS, then a serious but also controversial disease associated
with homosexual lifestyles, instead of the much admired restoration
project of the Statute of Liberty and Ellis Island. And what,
if in addition to of selling pins, cute teddy bear and collecting
yoghurt tops to fund breast cancer research, companies would highlight
the basic lack of healthcare; a situation that prevents many from
detecting this terrible disease in its early, and most curable,
stage. Generally, there is a tendency for business to focus on
symptoms, as opposed to core problems. For example, while cause
related marketers have latched on to illiteracy as an issue (Pringle
and Thompson, 2001), none appears particularly eager to raise
awareness about the more fundamental issues of poorly funded schools
or growing economic inequality. Likewise, while many businesses
eagerly solicit funds for breast cancer research, they not devote
much attention to the possible links between certain industry
practices and cancer and rarely, if ever, do they focus on the
lack of affordable and adequate healthcare for women as one of
the missing links in the fight against (breast) cancer. In fact,
cause-related marketing, can, in some instances, be seen as just
a cleverly disguised ploy to mask some of the fundamental problems
that the very same marketing forces, are directly or indirectly
responsible for. "As companies appear to fill the gaps they have
helped create," one critic suggests," they can present themselves
as indispensable vehicles for social provision, enabling them
to argue for a further reduction in state services" (Monbiot,2001,
their generosity, compassions and charitable inclinations into
a well functioning branding strategy, companies have arrived at
a very successful formula and their future looks bright. Viewed
from the public perspective, however, the future is far from silver
lined. What will be the ultimate outcome of turning the non-profit
sector into a marketing tool for business? Non profits have traditionally
served the needs of people unable to obtain goods and services
in the marketplace but given recent trends it would not be surprising
if money-starved non-profits might try to change their approaches
(and services rendered) in order to present themselves as attractive
CRM partners. My personal opinion is that hinging the fate of
the non-profit sector to the whim of the marketplace is very problematic.
The partner most often asked to compromise is the non-profit.
In a fair society, business should pay a higher share of taxes
and help fund education, health care and research with no strings
attached. But don't expect that to happen soon. Right now, business
is having its cake and eating it too.
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