In the mid-1980s to early 1990s corporate America was searching for ways to increase its philanthropic efforts and answer the call for corporate social responsibility. Corporate giving (which represents only 5% of all charitable giving) grew from under $1 billion in 1975 to about $14.5 billion in 2009. The bulk of corporate giving goes to educational institutions, “united” charitable funds, organizations for youth, health projects and institutions, and museums. However, charitable giving at the corporate level has transformed in recent years to enable businesses to focus their contributions toward specific social issues, either through strategic corporate philanthropy or cause related marketing. There is an important distinction between the two.
What Is Strategic Corporate Philanthropy?
While corporate giving most simply is the act of corporations donating some of their profits, or their resources, to nonprofit organizations, a growing number of corporations incorporate a strategic focus into their philanthropic programs to integrate business expertise and goals with a commitment to social betterment. Michael Porter and Mark Kramer point out in Harvard Business Review (HBR) that a social issue that connects with a company’s business goals, competitive context, and specialized expertise has the best chance of increasing the company’s competitive advantage and having a social impact. A good cause for a technology firm might involve sharing technology and training people in a particular community to use the technological tools they produce to be more productive. The firm has the expertise to contribute to the cause and a business reason for having a stake in the outcome. Sharing technology helps the community achieve its own goals while increasing technologically proficient clientele who would use their products in the future, creating intellectual capital, and expanding the uses of technology—philanthropy that increases the competitive edge of the company while having a strong social impact. The technology firm, Cisco, is a prime example, and a number of corporations are attempting to use similar models. A recent study by The Center on Philanthropy at Indiana University found that many firms carefully craft their philanthropy programs to reflect the “essence of what [they] stand for.”
What is Cause Marketing?
Cause marketing on the other hand is generally housed in the marketing divisions of corporations and is focused on brand development. In addition to donating a portion of profits to some organization that represents some cause, this form of charitable giving has three primary business objectives: building reputations as good corporate citizens, deepening employee loyalty through employee matching and cause related volunteerism, and increasing sales. For each of these objectives, publicity is paramount, and corporations are choosy about which causes to put their names and dollars behind.
Practically speaking, a social cause must first have an organizational home. A nonprofit organization that has been around for a long time and has a sustainable infrastructure, demonstrated success, strong leadership, accountability, and outreach potential would likely be considered a “safe bet” for ongoing corporate partnerships. Also, a good corporate cause must be a social issue that gleans good press, is employee friendly, and is easy to measure. Nothing controversial or too complicated. Just a clear and simple message that gives people something to care about, makes people feel good, and makes a contribution. Image is everything for branding to be successful in engaging the emotional sensibilities of would-be supporters and consumers.
The cause marketing strategy works and many people like it. From 1993 to 2004, the Cone agency found in repeated marketing studies that about 85 percent of consumers were likely to switch to a new brand of similar price and quality if the new brand were associated with a cause (Cone Corporate Citizenship Study). In just a few years after the pink ribbon came on the scene as the symbol for breast cancer awareness (1992) and ultimately the entire breast cancer cause, it was already the cause of choice in many corporate cause marketing portfolios, and by 1996 Lisa Belkin referred to breast cancer in The New York Times Magazine, the “darling of corporate America.” Breast cancer activists had already done the hard work of getting breast cancer into the public discussion, de-stigmatizing the illness, and increasing support programs and funding for research. Once breast cancer was out in the open as a good and moral cause, corporations could build upon its public appeal to buoy their own public image. Twelve years later Samantha King examined how cause marketing has continued to transform corporate philanthropy into a business activity designed to produce revenue and enhance public relations.
Cause Marketing Is Still Marketing
Cause marketing does not always have a good return on investment, and it has very limited potential in terms of philanthropy. Sure, the big non-profits get money and free advertising, and the corporations get to use the cause to create an image of caring and social responsibility. But as Porter and Kramer argue, “as long as companies remain focused on the public relations benefit of their contributions instead of impact achieved, they will sacrifice opportunities to create social value. (p. 15).” Social value goes beyond perceived good will and dollars donated to a non-profit organization. Social value means social betterment through systemic, evidence-based change whether or not anyone knows about it.
It’s easy to slap a pink ribbon on something to create an impression of supporting a good cause like breast cancer. The pink giant is a safe bet and, for some, a reliable revenue stream. But fund-raising is not enough. Without regard to systemic outcomes, social context, and reliable measures to monitor progress, pink dollars can actually diminish the social value of fundraising for the breast cancer Cause.
Breast cancer is indeed the darling of corporate America, but cause marketing agents should beware. The Cone study also found that while consumers liked to support causes, they were also willing to act against companies if they learned of unethical behavior.
Is it ethical for a company to use pink to better their reputations while selling or manufacturing products that contribute to ill health or a carcinogenic environment? Is it ethical for a non-health-related business to distribute health information as part of a cause marketing program? Is it ethical for companies to advertise their cause marketing relationships while disseminating misinformation about breast cancer? Is it ethical to profit from women’s fear of breast cancer? Is it ethical for breast cancer charities to accept donations from companies that do not address these ethical questions?
(See my previous post, Feeling Good About Cause Marketing?)
