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Who Really Wins at Cause Marketing? The Non-Profit or the Business?

Leslie Back | Monday December 13th, 2010 | 0 Comments

Earlier this year I wrote about the expanding relationships between non-profit and for-profit organizations. Historically, these relationships have been either adversarial or based on corporate philanthropy and cooperative marketing. Today, however, we see more in-depth collaborations, based in the reality that no one group can meet our social and environmental problems in isolation. These new partnerships, such as WWF and Coca-Cola or EDF & Wal-Mart, are transformative and have the potential to forever strengthen the way that companies and NGOs work together.

Such collaborations do not, however, negate the necessity of more familiar and traditional approaches. For instance, cause-related marketing, which really gained momentum in the 1980s with the American Express effort to restore the Statue of Liberty, is still a relatively new concept. While cause-related marketing campaigns do not have the depth of multi-year and multi-faceted collaborative partnerships like those mentioned above, they are full of merit. Indeed, cause-related marketing is one of the principal ways that companies express their social responsibility (to the tune of about $1.08 billion in 2005). It is not a question of cause-related marketing or philanthropy or transformative partnerships or non-profit policing of corporate activities. All approaches are necessary to find solutions to the systemic sustainability challenges we face.

But do cause-related marketing campaigns benefit the business over the non-profit or vice versa? Do one of the two parties come out an obvious winner? Obviously, companies expect a return on investment (more sales) from enhanced reputation brought about by the affiliation with a well-known NGO.  The non-profit wants funding and increased exposure for its programs and causes. According to recent research, both win. In February of this year Cone conducted a survey on cause related marketing. According to the research, (78%) of Americans believe a partnership between a nonprofit and a company they trust makes a cause stand out. Further, 59% of respondents said they were more likely to buy a product associated with the partnership and 50% are more likely to donate to the non-profit as a result of the cooperative marketing effort. Take our American Express case as an example. As a result of that trendsetting effort, within three months the Restoration Fund raised over $1.7 million and American Express card use rose 27%. New card applications increased 45% over the previous year.

Of course, society is the true benefactor. Cause-related marketing campaigns help reach social and environmental goals and secure funds for worthy community projects. Further, the relationships formed through such cooperative campaigns often form a foundation for more in-depth agreements and collaborations later on. While cause marketing is only one tactic for corporate social responsibility and is only one avenue for nonprofit funding, its value cannot be underestimated.


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