Cause marketing or cause-related marketing is the perfect meeting ground for two parties with a need. With all of the clutter of the information age, a business needs to find innovative ways of marketing and branding. Nonprofit organizations are on the constant lookout for new ways to raise funds.
Corporate giving to nonprofit groups has had a long and admirable history. Without outright grants, many nonprofit organizations would have to close their doors. The donation may be as simple as a tee sponsorship at a charity golf outing or an elaborate grant of hundreds of thousands of dollars to sponsor a nonprofit concert.
But cause marketing goes a step further than corporate giving— the outright gift of money in exchange for advertising a company’s name, which is usually connected to a specific event. Cause marketing is where the needs of both the business corporation and the nonprofit come together and create a partnership that is profitable for both. Both entities participate in the profits of every sale. Cause marketing should be a part of every business plan.
How Did Cause Marketing Start?
A perfect example of cause marketing is American Express, to which the phrase “cause marketing” is attributed. In 1983, as part of its effort to raise money for the restoration of the Statue of Liberty, according to grantspace.org. American Express donated one penny to the restoration fund every time its card was used. For its charitable act, American Express was awarded with a 45 percent increase in new cardholders and a 28 percent increase in card usage. Who says nice guys don’t finish first?
Examples of well-done cause marketing campaigns abound. Whenever the checkout person in the supermarket asks you if you want to donate a dollar to a particular charity—that’s cause marketing. Whenever you see a sign in any business that says “$__ or X percent of every sale goes to ___”, that’s cause marketing. When a restaurant owner on a golf course organizes a charity golf tournament, he makes money and so does the charity. That’s cause marketing.
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How Does Cause Marketing Help a Business?
The huge increase in American Express card usage discussed above should tell you that something’s up with this cause marketing trend. Is there something customers like about it? Research emphatically says yes. According to Cone Communications, a public relations and marketing company, 83 percent of Americans want to buy products and services from companies that donate part of the proceeds to a good cause. Wow! Any corporate finance head who says “we can’t afford it” needs his head examined. Given these numbers, how can a business not afford it? If a customer feels positive about a company it’s only logical that the customer will want to do business with that company. This is just common sense, backed up by the numbers.
The Economy Has Taken a Bite Out of Nonprofit Budgets
The economic meltdown of 2008 and the anemic recovery since has had a serious impact on nonprofit organizations. In a study released by the Nonprofit Finance Fund (NFF), 87 percent of the 2,000 member organizations reported a negative impact on their groups. Traditional fundraising by passing the hat is difficult when the target corporate givers are struggling.
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Can Your Nonprofit Organization Benefit from Cause Marketing?
No simple one-two-three step solution will come up with an answer. There are, however, some basic questions that your organization should pose to itself, and once you come up with some possible answers, you are on your way to a new source of fundraising. Here are some ideas for your board to consider when thinking about cause marketing:
1) Does your nonprofit have a wide appeal?
If your group is formed to help families in your town or village who have lost a loved one in the military, it may not attract the attention of a large corporation, no matter how respectable your mission is. But the appeal may be there for a busy local business who would love the great PR from a cause marketing campaign addressed to the mission of your group.
2) What industries does your group share an affinity with?
If you’re a visual arts group, perhaps a large paint company or art supplies store could be a target. Do you manage a museum? A building needs constant upkeep. Consider Home Depot, Lowe’s or ACE Hardware. Is your organization involved in health-related issues such as the care of the elderly? Consider a large health insurance company, which certainly could use some good publicity. Brainstorm! Your perfect cause marketing partner is out there; you just have to find it.
A good starting point for cause marketing information can be found at grantspace.org.
4) It’s marketing—Don’t be shy.
Many nonprofit board volunteers feel uncomfortable asking for money. It’s just a personal trait. With cause marketing, however, you can show the decision-maker some of the numbers discussed in this article. You need to drive home this essential point: You’re showing the executive or business owner how to make money, not how to spend money. You are presenting an opportunity, not requesting a donation.
Cause marketing is the great win-win in nonprofit fundraising. The nonprofit organization is simply showing a business how to market a brand.
This article is written by Juan Koss. Juan is a business coach and digital strategist of DoMyWriting company, who’s worked behind the scenes in hundreds of businesses, from ten figure brands to one education website. Follow him on LinkedIn.