Marketing for the cause: A growing trend in corporate philanthropy
April 8, 2002
by Nicole Zummach
Over the years, pennies have helped send athletes to the Olympics,
buy wilderness habitat, and fund important programs run by a wide range
of nonprofits. Many of these pennies have been generated by cause-related
marketing programs (CRM), where a company donates a portion of purchase
proceeds to a specific charity. The corporate partner benefits from
its association with a charitable cause and the nonprofit benefits by
receiving funds or other compensation from the company.
Not a new concept but one that's gaining popularity
American Express first coined the phrase "cause-related marketing"
in the 1980s while raising money for the restoration of the Statue of
Liberty. A penny was donated by the company each time a cardholder used
their credit card. Not only did they raise money for a worthy cause
but American Express also saw usage and membership increase. Since then,
companies producing everything from yogurt to teddy bears have been
partnering with nonprofits, using their name and logo to help sell products
and then handing over a percentage of the profits. It's a relatively
simple arrangement that can pay off for everyone involved.
"Companies are starting to see the value of being associated with a
cause," says Valerie Tibbles, a corporate grant-giving consultant.
"There is also a level of expectation from the Canadian public for these
kinds of activities. At the same time, charities have to be very creative
in terms of the kinds of funding arrangements they make with corporations.
It has gone well beyond typical corporate philanthropy." Though relationships
may be evolving, Tibbles points out that the partnership must work for
both sides. "In order for it to work, both the charity and the corporation
have to know who they are and what they want out of the relationship.
It's about looking for a good fit because, ideally, the relationship
should be long-term."
Finding the right partner is the key to success
Though Tibbles says this type of relationship is on the rise, Fran
McDougall, national executive director of the Make A Wish Foundation,
warns that charities must carefully assess any offer put forward by
a company. "You have to make sure it is a credible company and
a realistic venture and that the affiliation is a good fit. These types
of partnerships are not just to the benefit of the charity; they raise
the public image of the company as well." The foundation currently
has several partnerships, including one with Mappins/Peoples Jewellers,
which raises approximately $100,000 annually for Make A Wish through
special promotions.
While this may be one of the foundation's success stories, McDougall
says not all experiences are so positive. She advises that charities
sign a contract before entering into any arrangement, and use discretion
when something is not the right fit, even though the offer may be tempting.
"There are examples where the promoter made a lot more money than the
charity. When we give out the name 'Make a Wish', and the credibility
that comes with that, then we must make sure there is a bottom line."
She also recommends setting a timeframe and reviewing and evaluating
the partnership prior to renewing any agreement. "You have to have
a business approach because you are entering into a business agreement.
It's not just a donation pledge."
Promoting the cause can be as important as generating funds
Although the financial and business aspects of these partnerships cannot
be overlooked, another important component is raising awareness about
a particular cause. Awareness building is what motivates Alain Branchaud,
Andrée Gendron, and Michel Cusson, the trio behind
Projet Rescousse, a nonprofit organization working to raise funds
and consciousness about species endangerment. A few years ago they had
the idea to market a beer to raise funds for endangered animals. The
result was Rescousse beer, which has been available in Quebec for several
years and which was just launched in Ontario. The bottle label depicts
an endangered species found in the province and royalties paid by RJ
Brewers, makers of the beer, help protect wildlife.
What makes this arrangement different than other cause-related marketing
ventures is that Projet Rescousse sees none of the money. "We decided
that the money should go to existing charities because of their notoriety,
la Fondation de la faune du Québec and Wildlife Habitat
Canada, two important foundations for wildlife," explains Alain
Branchaud. "We at Projet Rescousse do this strictly as volunteers."
He adds that besides raising money, the project is also an excellent
way to heighten public awareness. "The fact that we are independent
of both the brewer and the foundations gives us the liberty to speak
out about certain political subjects." He also hopes that their
'message in a bottle' will inspire people to discuss environmental issues
at social gatherings.
Finding corporate partners that believes in the cause
Before consumers could ever buy Rescousse beer, Branchaud and his partners
had to find a brewer to get involved with the project. That didn't pose
a problem but he says it was a belief in the cause that brought RJ Brewers
on board, not the promise of boosting their own image. "The owner was
probably asked 40 times to speak with the media but it was only last
week that he granted his first interview," says Branchaud. "It
is surprising I guess, but they just like the idea and want to support
the cause."
United Furniture Warehouse is another company that is focused
on helping the cause. They donate 2% of all sales to Welcome Home,
a planned youth refuge founded by John Volken, who also owns
United Furniture Warehouse. Though the partnership was almost a given,
United advertising manager Steve Barrett says the company isn't
donating profits for its own benefit. "I'm sure there are some people
who know what we do and say 'Oh, that's nice', but I doubt whether that
really has any influence in terms of their buying decisions. That's
not why we are doing this and it's certainly not something we have pinned
any marketing hopes on." It's a refreshing attitude and one that will
hopefully become more common as corporate philanthropy continues to
evolve and expand.
For more information about the Make A Wish Foundation, visit: www.makeawish.ca
To learn more about Projet Rescousse, visit: www.rescousse.org
and for more information about Welcome Home, visit: www.welcomehomeinternational.org.
Valerie Tibbles can be reached at vtibbles@aol.com.
