3 posts tagged “nonprofit organizations”

Since wiki entries can change at a moment's notice and improvement of content by collaboration are their strengths, I wanted to document the original material that I submitted for Wikipedia's article on Cause Marketing.  As you can see, there is much work to be done still.  Here it is minus the Wikipedia-like formatting and internal Wikipedia links:

Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a "for profit" business and a non-profit organization for mutual benefit. The term is sometimes also used to refer to the marketing efforts of social and other charitable causes generally. Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship generally not based on a donation.

History

The creation of the term "cause-related marketing" is attributed to American Express, and it was coined to describe efforts to support locally based charitable causes in a way that also promoted business. The term was then used to describe the marketing campaign led by American Express in 1983 for the Statue of Liberty Restoration project.^[1] The terms "cause-related marketing" and "cause marketing" continued to grown in usage since that time. In more recent years the term has come to describe a wider variety of marketing initiatives based on the cooperative efforts of business and charitable causes.

Background

According to a report published by onPhilanthropy^[2], cause marketing sponsorship by American businesses is rising at a dramatic rate. Citing an IEG, Inc. study, $1.11 billion was spent in 2005, an estimated $1.34 billion will be spent in 2006, and the number is expected to rise further in 2007.

Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006^[3], 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with "good cause". The same study also indicated that a significant percentage surveyed would prefer to work for a company that was considered socially responsible. This can be linked to the increase in workplace giving programs. Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that companies to be "good corporate citizens"^[4]. These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.

Numerous other studies^[5] have also been conducted to show that cause-related marketing has helped to increase a company's profits. For example, in the cause marketing campaign by American Express (to which the term "cause marketing" is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.

Benefits

The possible benefits of cause marketing for nonprofit organizations include an increased ability to promote the nonprofit organization's cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company's customer base. The possible benefits of cause marketing for business include positive public relations, improved customer relations, and additional marketing opportunities.

Online Cause Marketing

Although originally a marketing strategy that occurred offline, cause marketing has been conducted more and more through online channels in the last decade. This is due in part to the increasing percentage of households with internet connections. As with other types of marketing campaigns, companies can leverage online marketing channels along with other offline channels such as print and media. (Sometimes referred to as integrated marketing).

Online Charity Auctions

In recent years, online auctions have been used in cause marketing strategies using a number of different online auction platforms. eBay provides a dedicated charity program, eBay Giving Works, that allows online auction sellers to donate a percentage of their sales to a nonprofit orgranization. Businesses and nonprofit organizations can also use the program for cause marketing and nonprofit fundraising programs. This and other online auction platforms like, cMarkets, have been used to conduct a wide range of cause marketing campaigns, like the auctioning of the celebrity-autographed Harley by Jay Leno in 2005.^[6][7]

Types of cause marketing

Cause marketing can take on many forms, including:

• Product, service, or transaction specific
• Promotion of a common message
• Product licensing, endorsements, and certifications
• Local partnerships
• Employee service programs

Examples

• One example of cause-marketing would be the partnership of Yoplait's "Save Lids to Save Lives" campaign in support of the Susan G. Komen Breast Cancer Foundation. The company packages specific products with a pink lid that consumers turn in, and in turn Yoplait donates 10 cents for each lid.

• An example of a nonprofit certification of a product (business) includes the American Heart Association's stamp of approval on Cheerios, the popular breakfast cereal.

• Launched in early 2006, Product Red^[8] is an example of one the largest cause-related marketing campaigns to date given the number of companies and organizations involved as participants as well as its reach worldwide. It is also an example of a cause marketing campaign that is also a brand on its own. Product Red was created to supportThe Global Fund to Fight AIDS, Tuberculosis & Malaria (aka "The Global Fund") and includes companies such as Apple Computer, Motorola, Giorgio Armani, and The Gap as participants.

See also

• Corporate image
• Foundation (charity)
• List of marketing topics
• Marketing
• Non-profit organization
• Philanthropy
• Public relations

References

1. ^ http://media.wiley.com/product_data/excerpt/09/04717175/0471717509.pdf
2. ^ http://www.onphilanthropy.com/site/News2?page=NewsArticle&id=6863
3. ^ http://www.csrwire.com/PressRelease.php?id=6641
4. ^ http://www.thinkbeforeyoupink.org/PDF/ConeCorpCitizen.pdf
5. ^ http://www.causemarketingforum.com/page.asp?ID=345
6. ^ http://www.causemarketingforum.com/directory_detail.asp?ID=76
7. ^ http://www.auctionbytes.com/cab/abu/y205/m11/abu0154/s05
8. ^ http://www.joinred.com/default.asp

External links

• Cone Corporate Citizenship Studies
• List of Noted Organizations and Foundations promoting Business-Nonprofit Partnerships

Business Edge aticle, Consumers drive 'cause marketing' trend, discusses the role of consumers in and the increased popularity of cause marketing.  But neither are new.  Many cause marketers and writers typically cite statistics by Cone (I know I have) to show the interest of consumers in charitable causes.  But what isn't often mentioned is that such statistics (like the roughly 8 out of 10 consumers who would switch brands for a good cause) aren't new on there own.  What one could be pointing out that is different than the typical article is that while these numbers aren't new, they are on the rise.  What research shows in the last few years is that a higher and higher percentage of people are concerned about the "social conscience" of the companies they work for, as well as the associations of brands (companies) with causes. 

In fact, the biggest shift in recent years was just prior to and just after the September 11th crisis. 

The article also discusses the position of Samantha King who has a problem with the rise of cause marketing.  And if the summary of the article is accurate, I think that Ms. King might be missing the point.  According to the article, Samantha King in ("Pink Ribbons Inc., ") "says corporations generally spend more money on promoting their Pink Ribbon campaigns than they end up donating to the cause".  Congratulations on pointing out the difference between cause marketing and corporate philanthrop.  It is unfortunate if a misunderanding of a couple of defnitions turned into book that is off-topic. 

The point of cause marketing is for corporations and charitable causes to benefit.  It is not the job of companies to be the nonprofit organization.  But by leveraging the additional resources (financial, media, customer base, etc.) of a business, nonprofit organizations have an opportunity to promote their cause more extensively.  And while Samantha King may not understand this, Jocelyne Daw, who authored, "Cause Marketing for Non-Profits: Partner for Purpose, Passion and Profits", does. 

Consumers are increasingly interested in buying from companies who support their communities and causes they care about.  Employees are increasingly concerned about "soul" of the companies they work for.  And nonprofit organizations and businesses are increasingly aware of the mutual benefit of a symbiotic relationship.  Enter cause marketing, a tool that is helping to bring more resources to charitable causes than ever before.

Nonprofit organizations and charitable causes could learn a lot from the business world.  And for too long, too many nonprofits have plied there own way, ignoring some valuable lessons from the business world and internet marketing.  This isn't to say that outstanding work, dedication, and passion cannot be found every day all over the world.  Because it can.  It is simply my opinion that there is more that can be done.

The following are a few suggestions taken from a much larger article that I am working on finishing.  And I'll perhaps post some more of it here in the future or on my cause marketing blog that I anticipate launching around the middle of January.  So a few of the suggestions that I have for nonprofit organizations in 2007 are:

1.  Don't just think about potential donors, think more about building a donor community.

2.  Viral marketing.  Don't ignore it.  Do something with it. This is sometimes labeled word-of-mouth marketing, though it is my opinion that there are some subtle differences that doesn't make them perfectly synonymous.

3.  Blogs - If you are reading this, you probably know more than half of what I could say about this topic

4.  Your website should not be an "after thought".  It says more about you than you may realize. 

5.  Pay attention to your back channels.  This basically means that you need to have a strategy and functionaltiy in place for those who come to your website.  Simply put, you simply cannot afford to just have "visitors only" to your website.

A number of the ideas above are actually tied together.  And perhaps you have noticed a theme that winds through all of them.  For nonprofit organizations, the year 2007 needs to be about Engagement.