Strategic Corporate Philanthropy

🤲Strategic Corporate Philanthropy Unit 8 – Cause-Related Marketing Strategies

Cause-related marketing pairs businesses with non-profits to promote products while supporting social causes. Companies typically donate a portion of sales to a chosen charity when customers buy specific items. This strategy aims to boost sales, enhance brand image, and create positive social impact. CRM has evolved since the 1980s, with social media transforming engagement and transparency. Recent trends include long-term non-profit partnerships and employee-driven initiatives. The COVID-19 pandemic has highlighted CRM's importance as companies support communities in need and demonstrate social responsibility.

Key Concepts and Definitions

  • Cause-related marketing (CRM) involves a partnership between a for-profit business and a non-profit organization to promote a product or service while supporting a social or environmental cause
  • CRM campaigns typically involve a company donating a portion of its sales revenue to a chosen cause or charity when customers purchase specific products or services
  • Transactional CRM occurs when a company donates a fixed amount or percentage of sales to a cause, while non-transactional CRM involves other forms of support such as sponsorships, employee volunteering, or in-kind donations
  • Cause-brand fit refers to the perceived alignment between the company's brand image and the chosen cause, which can impact the effectiveness and credibility of the CRM campaign
  • Social impact encompasses the positive changes and benefits generated by the CRM campaign for the targeted cause or community, such as increased awareness, funds raised, or tangible improvements
  • Return on investment (ROI) in CRM includes both financial returns for the company (increased sales, customer loyalty) and social returns for the cause (funds raised, increased visibility)
  • Cause washing describes situations where companies engage in CRM primarily for marketing purposes without a genuine commitment to the cause, leading to skepticism and backlash from consumers

Historical Context and Evolution

  • CRM emerged in the 1980s as a way for companies to differentiate themselves and appeal to socially conscious consumers, with early examples including American Express' campaign to restore the Statue of Liberty
  • In the 1990s, CRM gained popularity as more companies recognized the potential benefits of aligning with social causes, such as increased brand loyalty, positive publicity, and employee engagement
  • The advent of social media in the 2000s has transformed CRM by enabling companies to engage directly with consumers and causes, as well as increasing transparency and accountability
  • Recent trends in CRM include a focus on long-term, strategic partnerships with non-profits, as well as the rise of employee-driven initiatives and corporate volunteering programs
  • The COVID-19 pandemic has highlighted the importance of CRM as companies seek to support communities in need and demonstrate their social responsibility
    • Many companies have pivoted their CRM efforts to address urgent issues such as healthcare, food insecurity, and economic relief
    • Virtual and digital CRM campaigns have become more prevalent due to social distancing restrictions
  • Product-linked donations involve a company donating a portion of sales from a specific product to a designated cause (Warby Parker donating a pair of glasses for each pair sold)
  • Point-of-sale campaigns prompt customers to make a donation to a cause at checkout, often by rounding up their purchase or adding a fixed amount (McDonald's asking customers to donate to Ronald McDonald House Charities)
  • Licensing agreements allow companies to use a non-profit's logo or branding on their products in exchange for a donation or royalty fee (World Wildlife Fund logo on Coca-Cola polar bear cans)
  • Social media campaigns leverage platforms like Facebook, Twitter, and Instagram to raise awareness and funds for a cause, often through hashtags, challenges, or user-generated content (ALS Ice Bucket Challenge)
  • Employee engagement programs encourage staff to volunteer, fundraise, or donate to a cause, often with matching contributions from the company (Microsoft's annual Employee Giving Campaign)
  • Sponsorships involve a company providing financial or in-kind support for a non-profit's event, program, or initiative in exchange for brand visibility and recognition (Bank of America sponsoring the Susan G. Komen Race for the Cure)
  • Collaborative product development involves a company working with a non-profit to create a new product or service that generates revenue for the cause (TOMS shoes designed by local artisans in developing countries)
  • Define campaign objectives, such as raising funds, increasing brand awareness, or driving sales, to guide strategy and tactics
  • Select a cause that aligns with the company's values, target audience, and business objectives, considering factors such as relevance, credibility, and potential impact
  • Develop a compelling campaign message and creative concept that resonates with consumers and clearly communicates the link between the purchase and the donation
  • Choose appropriate channels and tactics for reaching target audiences, such as social media, email marketing, in-store promotions, or events
  • Set a donation structure, such as a percentage of sales, fixed amount per purchase, or matching customer donations, and communicate it transparently
    • Consider setting a minimum or maximum donation amount to manage budget and expectations
    • Ensure the donation structure is simple and easy for customers to understand
  • Establish a timeline for the campaign, including launch date, duration, and key milestones, and align with relevant events or holidays if applicable
  • Create a budget that accounts for all campaign expenses, such as marketing materials, advertising, and any fees associated with the cause partnership
  • Develop a measurement and evaluation plan to track campaign performance and impact, using metrics such as sales, donations, social media engagement, and customer feedback

Stakeholder Engagement and Partnerships

  • Identify and prioritize key stakeholders, such as customers, employees, investors, and community members, who have an interest in or influence on the CRM campaign
  • Engage stakeholders throughout the campaign planning and execution process to gather input, build support, and address concerns or questions
  • Collaborate with the non-profit partner to ensure alignment on campaign goals, messaging, and execution, and establish clear roles and responsibilities
    • Develop a formal partnership agreement outlining terms, expectations, and deliverables
    • Maintain open and regular communication with the non-profit partner to monitor progress and make any necessary adjustments
  • Leverage the non-profit partner's expertise, networks, and resources to enhance the campaign's credibility, reach, and impact (American Red Cross providing disaster relief expertise for a company's CRM campaign)
  • Engage employees as ambassadors and advocates for the campaign, providing opportunities for them to volunteer, fundraise, or share their personal stories
  • Partner with influencers, celebrities, or other brands to amplify the campaign's message and reach new audiences (Subaru partnering with ASPCA and influencers for its "Share the Love" campaign)
  • Seek feedback and input from stakeholders throughout the campaign to identify areas for improvement and ensure ongoing engagement and support

Measuring Impact and ROI

  • Set clear, measurable goals and key performance indicators (KPIs) for the campaign, such as total donations raised, number of customers engaged, or increase in brand awareness
  • Track sales data to measure the impact of the CRM campaign on product or service purchases, comparing performance to a baseline or control group
  • Monitor social media metrics, such as likes, shares, comments, and hashtag usage, to gauge consumer engagement and sentiment around the campaign
  • Conduct surveys or focus groups with customers and employees to gather qualitative feedback on the campaign's effectiveness, message resonance, and overall impact
  • Analyze website traffic and conversion rates to assess the campaign's impact on online engagement and e-commerce sales
  • Calculate the total funds raised for the cause and the impact of those funds on the non-profit's programs or initiatives (e.g., number of meals provided, animals rescued, or scholarships funded)
  • Measure any changes in brand perception, loyalty, or customer lifetime value resulting from the CRM campaign, using tools such as Net Promoter Score (NPS) or customer satisfaction surveys
  • Evaluate the ROI of the campaign by comparing total costs (marketing expenses, donation amounts) to total benefits (increased sales, brand value, employee engagement), and identify areas for optimization in future campaigns

Ethical Considerations and Challenges

  • Ensure transparency and honesty in all campaign communications, clearly disclosing donation amounts, limitations, and any potential conflicts of interest
  • Avoid cause washing by ensuring a genuine, long-term commitment to the cause and aligning the campaign with the company's core values and actions
  • Consider the potential unintended consequences or backlash of the campaign, such as the perception of exploiting a sensitive issue or overshadowing the non-profit's own messaging
  • Navigate legal and regulatory requirements related to charitable giving, such as tax deductions, disclosure statements, and commercial co-venture laws
  • Balance the need for brand visibility with the importance of centering the cause and the non-profit's mission in campaign messaging and execution
  • Address any concerns or criticisms from stakeholders promptly and transparently, demonstrating a willingness to listen and adapt as needed
  • Ensure the campaign does not reinforce stereotypes, perpetuate harm, or exploit vulnerable populations, and seek input from diverse perspectives to avoid blind spots
  • Consider the long-term sustainability and impact of the campaign, and plan for ongoing support and engagement beyond the initial activation

Case Studies and Best Practices

  • TOMS Shoes' "One for One" model, donating a pair of shoes to a child in need for every pair purchased, has inspired numerous other buy-one-give-one CRM campaigns (Warby Parker, Bombas)
    • Best practices: clear, simple message; tangible impact; long-term commitment; employee engagement
    • Challenges: ensuring sustainable impact; adapting to changing needs; balancing brand and cause
  • Patagonia's "1% for the Planet" initiative, donating 1% of sales to environmental causes, demonstrates a deep integration of CRM into the company's core values and operations
    • Best practices: authentic alignment with brand; transparent reporting; employee activism; long-term partnerships
    • Challenges: balancing business growth with environmental impact; advocating for systemic change
  • Dove's "Real Beauty" campaign, celebrating women's diversity and challenging beauty stereotypes, has successfully combined brand messaging with social impact over the past 15+ years
    • Best practices: consistent messaging; diverse representation; partnerships with non-profits and experts; measurable impact on self-esteem
    • Challenges: avoiding tokenism or appropriation; addressing intersectional issues; measuring long-term impact on beauty standards
  • (Product) RED's partnerships with major brands like Apple, Nike, and Starbucks have raised over $600 million for the Global Fund to fight AIDS, tuberculosis, and malaria since 2006
    • Best practices: high-profile partnerships; clear donation messaging; engaging influencers and celebrities; adapting to changing global health needs
    • Challenges: maintaining momentum and visibility; ensuring transparency and accountability; balancing multiple stakeholders and agendas
  • Key best practices across successful CRM campaigns include:
    • Authentic, long-term commitment to the cause
    • Clear, transparent messaging and donation structures
    • Engaging multiple stakeholders, including employees, customers, and non-profit partners
    • Measuring and communicating impact on both brand and cause
    • Adapting and innovating to address evolving social and business needs


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© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.