What are the advantages of cause-related marketing?
There are advantages for both nonprofit and business. For business, cause-related marketing proves that it is socially responsible, and provides great public awareness of its values and willingness to support good causes.
For the nonprofit, the contributions from a cause-related marketing project can be significant, and those funds are usually unrestricted so even overhead costs can be supported by them. Besides actual monetary benefit is the intangible value of the publicity and advertising that usually accompanies a cause-related marketing program, which is often done by the corporation's public relations and marketing departments.
What are the negatives of cause-related marketing?
There is always the possibility that one of the entities involved (nonprofit or corporation) will do something that hurts its reputation. In that case, the other party may be perceived negatively as well. For that reason, corporations and nonprofits should choose their partners wisely.
In addition there has been considerable concern about nonprofits lending their good names to for-profit activities. Does it weaken the trustworthiness of a nonprofit? Does it blur the lines between business and philanthropy? Could a nonprofit "sell out" by lending its support to products that are less than benign for the public? These questions continue to be debated by both fundraising and marketing professionals.
Today, there is also a potential problem given that there are so many cause-related marketing programs. The Chronicle of Philanthropy made these caveats about the question:
- 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.
Resources for this article include:
- Cause Marketing for Nonprofits: Partner for Purpose, Passion, and Profits, Jocelyne Daw, Wiley, 2006. This is an extremely well documented text about cause-related marketing by a pro from the nonprofit side.
- The Art of Cause Marketing: How to Use Advertising to Change Personal Behavior and Public Policy, Richard Earle, McGraw Hill, 2002. Earle cites his top 10 list of the best cause-marketing campaigns and why they worked.
- Cause Marketing Forum
- The Chronicle of Philanthropy (July 2007)
