Are Sponsorship Deals Resulting in Cause Clutter?

The Chronicle of Philanthropy, in a recent article, discusses the benefits and dangers of too much cause marketing by too many charities.

The recent Product Red campaign, led by rock star Bono, has enticed more charities into seeking deals with corporations to create products bearing the charity's name.

However, the Chronicle says there are some dangers as well as opportunities in such deals:

• Merchandising deals are not appropriate for just any charity. The ones that do well have significant name recognition or expertise in a particular topic.
• It can take up to two years of research, negotiation, and product development before an organization realizes any profit.
• Too many charities pursuing high profile deals can result in "cause clutter." Consumers may grow tired of the constant appeals to buy things to support good causes.

A recent survey by the leading cause marketing firm, Cone, found that while 30 percent of surveyed consumers in 2004 said they would pay more for a product if it supports a good cause, a follow-up survey more recently showed that only 14 percent of consumers say they would do so.

Like so many fundraising ideas, cause marketing might be in jeopardy because the field is becoming overcrowded. Licensing experts warn charities that products bearing their names must have a strong commercial appeal and be closely linked to the mission of the organization.

Furthermore, the field of cause marketing has not developed standards for the way charities are compensated. Sometimes a charity receives a maximum of royalties no matter how many units are sold; while other charities receive anywhere from 2 to 12 percent royalties from a product. Sometimes, the exact amount of money a charity receives is unknown to consumers.

So many questions are being asked, can some kind of regulation be far behind?

More about cause marketing:

• Courting Consumer Dollars (Chronicle of Philanthropy - free)
• Made Possible By: Succeeding With Sponsorships - a Review (About.com)