Cause-related marketing
According to the Foundation Center, an information clearinghouse on non-profit giving, "Cause-related marketing (CRM) is defined as the public association of a for-profit company with a nonprofit organization, intended to promote the company's product or service and to raise money for the nonprofit. CRM is generally considered to be distinct from corporate philanthropy because the corporate dollars involved in CRM are not outright gifts to a nonprofit organization, hence not tax-deductible." [1] Some companies, such as CREDO, have built their entire business around CRM, in its case using liberal advocacy organizations to sell their products.
Contents
History
According to the Foundation Center, "The phrase "cause-related marketing" was first used by American Express in 1983 to describe its campaign to raise money for the restoration of the Statue of Liberty. American Express made a one-cent donation to the Statue of Liberty every time someone used its charge card; the number of new card holders soon grew by 45%, and card usage increased by 28%." [2]
Types of Cause-Related Marketing
Dr. Inger Stole wrote "There are six main types of CRM arrangements. The first four relate to standard corporate practices. These are:
- advertising, where a business aligns itself with a particular cause and uses ads to communicate the cause’s message; public relations, where a business calls press and public attention to a strategic partnership between itself and a non-profit group;
- sponsorship, where a business helps fund a particular program or event;
- licensing, where a business pays to use a charity logo on its products or services; and
- direct marketing, where both a business and a non-profit raise funds and promote brand awareness.
"A fifth type of CRM is
- facilitated giving, where a business facilitates customer donations to the charity ... or to themselves! The ongoing effort by Ameren, an Illinois energy supplier, is a good example. In their monthly bills, Ameren customers receive a plea for donations to the corporation’s “Warm Neighbor” program, a fund established to help Ameren customers who are unable to pay their utility bills and/or weatherize their homes. While the energy supplier contributes an unspecified amount, the program relies on the generosity of Ameren customers. Lost -- or deliberately obscured -- is the fact that customers are helping other customers settle their debts to Ameren. Other utility companies use the same strategy. A few years ago, the telecom company then known as SBC Ameritech launched its “Bridge the Digital Divide” program, to provide people with basic computer knowledge using the same collection strategies.
"The sixth and most widely used CRM practice is:
- purchase-triggered donations. This is where a company pledges to contribute a percentage or set amount of a product’s price to a charitable cause or organizations. The American Express campaign to restore the Statue of Liberty, mentioned above, is credited as the blueprint. The company promised to contribute one cent for every card transaction and $1 for every new card issued during the last quarter of 1983. American Express not only collected $1.7 million for the restoration effort – there was a 28 percent increase in use of their credit cards, not to mention massive press coverage and free publicity. These results were not lost on other businesses. Between 1990 and 1999, American companies spent increasing amounts on CRM; the total annual sum has now passed the one billion dollar mark." [3]
SourceWatch Resources
External Resources
- Strom, Stephanie, "Charities' Share from Shopping Raises Concerns," New York Times, December 13, 2007.
- New York Times Editorial Board, "Buy This Sweater, Save a Seal," New York Times, December 22, 2007.
