Things to Consider When Choosing a Cause Related Marketing Program

The fact that your primary assets are invisible doesn’t make them any less attractive to corporations seeking word of mouth brand loyalty.  Your good name and trust among your members make your network into a goldmine for customer acquisition.  When financial profit exists as the bottom line for a company, using your cause as bait for customers can produce a host of unintended consequences and dissatisfaction over time.

On the other hand, cause related marketing can be very helpful in raising funds for your organization and even strengthen your social capital through the shared benefit of a successful Take care to research the motives, nature and practices of any company that seeks to partner with you. Below are some factors to consider.

Transparency.  How open and clear is the corporate partner about what amount of profit from cause related sales will be committed to your organization? Any company operating a credible cause marketing program will respond to requests for information and be able to answer specific questions about amount and accounting of funds used for charitable causes.

Pricing.  Does the company market cause related products at a different price than the same product sells through other outlets?  Sometimes a product will be sold at “list price” when customer referral comes through a charitable organization while selling the product at “discounted” prices through other channels.   This effectively makes the customer pay extra to cover any donation to their nonprofit cause.

Quality.  Don’t offer your members an inferior quality product in order to receive income for your budget.  Members may feel obligated to purchase the product and associate any problems they experience in product performance or customer service with your organization.  Although you may not formally endorse any product or company using your name for cause marketing, there is an implicit understanding by most members that you have researched the product and would not encourage members to make a poor consumer purchase.

Compatibility.  Is the product and company compatible with your organizations goals and values?  An animal welfare organization, for instance, will not want to allow a skin care product to use their name if the company uses lab animals for testing products.  An agency working for the benefit of children will not want to use a company that targets children with junk food or foods and high sugar content or deals in tobacco products.

Marketing.  What marketing methods will be used in public or targeted advertising?  You will not want your membership to be hounded by aggressive emails or phone calls.  Don’t allow the use of guilt or pressure by a company to make sales.  Marketing should be clear about benefits to your organization and choice of members to participate without pressure.  Marketing must be honest and should be effective enough to make any partnership profitable for your cause.  Reserve the right to approve any advertising campaigns.

Integrity.  The importance of integrity is related to other concerns on this list.  It is a good filter to apply to every step in a cause related marketing process.  Trust is your most valuable asset.  It can be quickly eroded if suspicions arise about any communication, motive or practice that violates common expectations of honesty, respect and fairness.  The primary values, history, recommendations and practices of the corporate partner in other areas (customer service, employee relations, advertising, etc) may give you valid clues about integrity.

Effectiveness.  Will the benefit to your organization be significant enough to justify a cause related marketing campaign?  Are there restrictions, qualifications or requirements that limit the amount your cause will receive?  If the corporation has used caused related marketing before, what were the results?  What projection does the corporation make for expected income and funding for your cause?  Is there any guaranteed donation to your organization for the right to use your name in marketing?

Expectations.  What work is expected from your organization?  Will time be required of staff, board, administration or volunteers to conduct the marketing project?  Does the marketing organization expect to have access to your membership, donor or contact  list?  Do not commit to a marketing process that would divert energy or time away from your primary mission.

Follow-Through.  Be sure that the corporate partner will supply detailed reports on a regular basis as well as a final report of all partner activity and income.  Reports should be available to your members on request. Evaluation by your board will determine if cause related marketing is right for your organization or if changes need to be made for future marketing projects.

With all these concerns and ways that cause related marketing could fail or harm your cause, should you consider using it as a fundraising opportunity?

Yes. With government funding, private grants and individual donations declining while social needs increase, cause related marketing continues to hold great potential for directing corporate profits to your cause.  Because it is connected with corporate sales and profits generated through association with your cause, income can be predictable and sustainable rather than being dependent on the decision of others or their ability to make a donation.

But do your homework on any cause related marketing opportunity.  Executed properly, it can be profitable for your organization and the corporate partner.  Benefit to your organization may extend far beyond financial income to include connection with the community, awareness of your mission, staff and volunteer cohesion.  A significant sustainable source of income that requires little time or effort can be an encouragement to everyone in your organization and fund your mission budget.

Blurring the line Between Profit and Nonprofit

It used to be simple.  I would buy tires at Sears and drop my change in the Salvation Army bucket.   I would leave my donation in the offering basket at church and give my credit card to the checkout guy at Target for my DVD.

Now you ask me to buy/give at the store, online and by phone. I’m told that you are a business/charity.  That makes me a donor/customer.  I feel proud/happy that I’ve contributed/purchased something that I need/believe in.

The forward slash connecting line combines things I’ve never put together before.  Makes me curious/suspicious.  But I know you’ve received something for your mission/profit.  Thanks for explaining to me this is a social benefit/business.

Innovative collaborations are occurring in the profit/nonprofit world.  This brings risk that the unique advantages of both business and charity may be lost- the warmth/purity of motive from a nonprofit charity and the competence/accountability of a business enterprise.  Collaboration also opens the door to humanizing business by bringing conscience and compassion to bear while expecting more from charitable causes.  More results, more transparency and more efficiency.

In addition to changing the nature of both for-profit and not-for-profit organizations,  the synergy and community created through cooperative efforts will allow each to do more than it could ever do alone.  The trust and freedom from producing a bottom line for investors along with the administrative and technological advancements of the business world can extend the reach and value of this new hybrid.

Any give and take must be cautious since nonprofits can’t afford to lose their most valuable assets- social connectedness and creative problem solving to make the world a better place to live, whether it’s financially profitable or not.   Standard business practices and sales performance goals can limit a worthy dream, create competition or dissatisfaction that create division.  Extreme compassion or dependence on volunteers that give time only as they are available may cause a commercial enterprise to go out of business.

So we experiment and use feedback to measure success in multiple bottom lines- people/profit/planet/community/productivity/integrity/sustainability/goodwill/hope.

That’s where I draw the line.

Financial Fuzziness in Charitable Funding

It’s interesting that we have come to define charitable benefit organizations as “not-for-profit”.  “Non” profit doesn’t clearly identify the nature of social benefit organizations.  It only states one characteristic that isn’t true.   Actually, it simply hints at the fact that “non-profits” usually don’t generate too much profit, or that it isn’t their primary goal, or that the profit generated is to be used for a particular purpose.  Since charitable organizations have grown beyond simply being different than business enterprise in regard to their source of income, it may be more accurate and helpful to define community benefit programs with a term other than “non-for-profit”.

One fallout from being labeled as “nonprofit” includes a set of assumptions about “for profit” business that by implication, must not be true about “nonprofit” organizations.  We may assume that business endeavors are productive, innovative, driven, highly complex efficient organizations.  Thus “nonprofit” organizations may be considered unaccountable, dealing in activity that can’t be measured or evaluated.  The “bottom line” that makes this simple for business doesn’t seem to fit or isn’t given the same regard in nonprofits.

Businesses have customers who must be served and satisfied for success. Nonprofits have clients who may or may not be helped.  Competition is a primary motive in business.  Nonprofits operate from concern and caring.  Nonprofits receive donations.  For profits charge fees. Not-for-profit organizations have dreams while goals and objectives are required for responsible commercial operations.  Business requires measurable results and growth within a limited time in order to survive.  Nonprofits may continue trying various approaches and programs with good intentions and social theory.  These and other assumptions naturally arise by defining charitable groups as “not” or the opposite of for-profit business organizations.

As many nonprofits have matured in purpose and productivity, using multiple revenue streams and talented executives in administrative positions, the line between “for profit” and “not-for-profit” has become blurred.  Corporations are becoming more socially and environmentally responsible.  Whether for profit or reasons of conscience, businesses are giving attention to bottom lines that include people, community and the planet as well as profits.  As the cost of caring rises, donations and government funding dwindle, nonprofits are seeking more ways to generate income.  Without the same requirements of a corporate board and stockholders, nonprofits may be more flexible in financial matters while retaining their tax exempt status and continuing to collect financing from various sources.

Until rules and regulations catch up with the growing common ground between profit and nonprofit organizations, there may be lack of clarity as charitable nonprofit organizations operate social business enterprises and subsidiaries.  Self monitoring along with public transparency is needed for members and donors to maintain trust in charitable causes.  Investors with an interest in community welfare and sustainability look for financial profit as well as social ROI.  New rules will eventually be created to deal with profitable practices of nonprofits and charitable work of for-profits.  Transforming practices and stereotypes can begin now.

See related research from Stanford, Wharton Business School and University of Minnesota professors describing for-profit and not-for-profit stereotypes.