- Cause Related Marketing Differentiates Companies - Dominik Gwarek
With cause marketing (also known as cause-related marketing, cause-based marketing, joint venture marketing, passion branding and corporate partnerships), a relationship between a for-profit company and a nonprofit organization is created with the goal of raising money for the nonprofit’s work and building the image of the for-profit company.
Cause marketing can be a valuable approach to fundraising from corporations. As traditional corporate philanthropy declines, nonprofits can tap into a different budget – the company’s marketing budget.
Evolution of Cause Marketing
American Express is widely acknowledged as the originator of today’s cause-related marketing, says Sue Atkins in Cause-Related Marketing: Who Cares Wins (1999). In 1983, after a few pilot programs, American Express launched a short-term campaign to donate a penny for the Restoration of the Statue of Liberty every time an American Express transaction occurred, and $1 for each new account opened. The three-month campaign ended with $1.7 million for the Restoration of the Statue of Liberty. American Express transactions increased by 28% in the first month alone, and new card applications increased by 45%.
In Cause Marketing for Nonprofits: Partner for Purpose, Passion and Profits (2006), Jocelyne Daw outlines the four stages of growth in cause marketing:
- Sales phase, used as American Express did in the 1980s, this is a partnership focused on a short-term increase in sales for the corporation.
- Customer loyalty phase deepens relationships between corporations and nonprofits and aims to build customer loyalty and make broader contributions to nonprofits.
- Branding phase, which is designed to “integrate social issues into an organization’s brand and corporate identity.”
- Social responsibility phase, where companies use cause marketing to frame their corporate social responsibility and express corporate values.
Getting Started with Cause-Related Marketing
Nonprofits new to cause marketing will likely want to begin with a partnership in the sales phase. While there are still risks to consider, the commitment in this phase is significantly less than in more complex arrangements.
Before engaging a cause marketing partner, Atkins offers these tips for planning a cause-related marketing campaign:
- Define the reasons and objectives for the partnership
- In considering potential partners, be sure there is a match in the values of both organizations
- Secure top level and internal support for the project – both organizations have their reputations riding on the partnership
- Be clear about how the campaign will operate, parameters for payments and when and how the program will end.
- Define the budget
The next step in the nonprofit’s cause marketing campaign is negotiation. Again, be clear about objectives on both sides, and recognize what each party brings to the table in terms of assets (like a network of volunteers, for example, or media relationships).
Cause-Based Marketing Tactics
Consider utilizing these marketing tactics in the partnership:
- Advertising and public relations. The corporation and nonprofit may place advertisements together, or call public attention to the partnership through media efforts.
- Sponsorship. The corporation may directly fund a particular program or event (for example, the Stanley Corporation “Animals for Seniors” Program).
- Purchase-triggered donations. The corporation will make a donation of a set amount for each purchase of a brand of products. This is usually capped to protect the corporation in the event of extreme response.
- Licensing. The nonprofit’s logo might be placed on the company’s product that is then sold. This is sometimes negotiated as a flat fee or as a percentage of sales.
- Endorsement. Licensing is one form of endorsement. Another form is somewhat related to sponsorship – the nonprofit builds a program that is implemented by the company.
- Facilitated giving. This is sometime known as “check-out giving” because it is often used in stores by giving the consumer the option of adding a certain amount to their total to make a donation. It can also be used by companies sending invoices.
With cause marketing, nonprofit organizations can diversify fundraising strategies to make up ground lost by the decline of traditional corporate giving. By demonstrating a strong return on investment, nonprofits can build relationships that will bring greater rewards over time.
Molly Schar - With more than a decade of experience in fundraising, communications and nonprofit management, Molly Schar has worked with mission-based, ...
