Cause-related marketing is big business for nonprofits and their business partners. Recent research reveals just how popular cause marketing is with consumers, and what the future holds for this booming industry.
Cause marketing, although certainly not new, became well known during the 1980s with the highly visible and successful partnership between American Express and the Statue of Liberty restoration project.
It has been growing ever since (a $1.62 billion industry in 2010), becoming one of the most popular ways to raise funds for nonprofits, and a direct route to corporate social responsibility for many businesses.
So what does the future hold for cause marketing? Here are three trends that seem to predominate, based on recent research:
Trend #1: Growth
The trend for cause marketing is definitely up and rosy. Cone Communications recently released the results of a global survey that found that consumers everywhere are on board:
- 81% of consumers around the world want companies to address key social and environmental issues; 93% say companies should go beyond just legal compliance to operate responsibly; and 94% expect companies to analyze and evolve their businesses to make their impact as positive as possible.
- 94% of consumers surveyed say they are likely to switch brands to support a cause if both brands are similar in price and quality.
- 94% say they would buy a product that has an environmental benefit; 76% have already done so in the past year.
- 93% would buy a product associated with a cause; 65% have already done so in the past year.
Businesses used to think that CSR was an option. Clearly it no longer is. They need consumers and consumers want to support good causes through their purchases and expect companies to be responsible throughout their business operations.
For nonprofits, the trends are also upward. More cause marketing arrangements are being made with businesses.
The Cause Marketing Forum, an organization that brings business and causes together and develops best practices, recently found in a survey that two-thirds of "America's leading nonprofits engaged in cause marketing expect to form more business alliances in 2012."
The "leading nonprofits" are nine organizations that have won the Cause Marketing Golden Halo Award. They include the American Heart Association, Boys & Girls Clubs of America, DonorsChoose.org, Feeding America, First Book, KaBoom!, Share Our Strength, St. Jude Children's Research Hospital and Susan G. Komen for the Cure.
The cause marketing future looks bright for these organizations with 67% reporting that they expect to expand their cause marketing campaigns next year, and 22% expecting the same number of corporate partner programs in 2012. Only one of the nine Golden Halo winners expected a decrease.
These nonprofits are very experienced with cause marketing programs, often have long-standing relationships in place with corporations, and devote considerable resources to nurturing those relationships. What we don't know is to what extent cause marketing programs are penetrating the vast number of nonprofits that are smaller and less resource rich.
But we can guess that cause marketing practices are spreading rapidly. Joe Waters, a specialist in cause marketing with a lot of experience with local and smaller organizations and author of Cause Marketing for Dummies, says the most frequent question he receives is "how can my local nonprofit get into cause marketing?"
Trend #2: Cause Marketing Is Supplanting Corporate Philanthropy
Cause marketing, for better or worse, seems to be shifting the weight of corporate funding for nonprofits from corporate philanthropy (grants) to cause marketing. A recent survey by the Chronicle of Philanthropy of its Philanthropy 400 (the groups that raise the bulk of charitable donations) said in its report that "...corporate and foundation gifts have withered..." One development director, Amy Purvis of the Museum of Fine Arts in Houston, was quoted: "We have seen a lot of corporate support evaporate....There are far fewer corporate foundations these days, and any gifts are coming more from marketing."
Joe Waters says in Cause Marketing for Dummies that nonprofits need to prepare for the "end of corporate philanthropy." In today's economic environment, many companies can't afford just to give money away; they must receive a return on their investments. The way to do that and still support good causes is through cause marketing. This is good news for nonprofits that are ready and willing to make the changes necessary to forge partnerships with business, but it is bad news for those who are still in the dark about how to even get started in cause marketing.
Trend #3: Developing Standards and Best Practices
As cause marketing grows more prominent, bad cause marketing is being called to account. The media and the public have voiced disapproval when cause marketing runs off the rails. Just consider the partnership of Komen for the Cure and Kentucky Fried Chicken, or the "pinkwashing" label that has afflicted some breast cancer marketing programs each October.
There is a growing insistence on good practices in cause marketing. And they are developing. An example is the list of worthy breast cancer cause marketing programs recently compiled by Joe Waters and Cone Communications. The best practices of these programs include two standards for transparency: giving enough information about the charity being helped so that consumers can research it; and saying exactly how much money the charity will receive, both in total and/or from each purchase.
Places to look for best practices as they evolve include The Cause Marketing Forum, Cone Communications, and Selfish Giving (Joe Waters' blog).
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