“A must-read for anyone interested in or involved with charity marketing. Jocelyne Daw has captured the subject in an informative and highly readable fashion. Great case studies and hands-on examples of how to navigate the challenging world of social philanthropy.”
―Harry A. Abel Vice President, Development and Strategic Alliances National Mental Health Association, Alexandria, Virginia

“Finally, a comprehensive look at the tremendous value of strategic partnerships between for-profit and nonprofit organizations. This is a book for anyone who wants to understand what it takes to successfully embrace cause marketing in your organization.”
―Sue Tomney Vice-President, Membership, Communications, and Marketing Imagine Canada

The definitive hands-on guide to cause marketing for nonprofits

When first launched over twenty-five years ago, cause marketing was viewed as a fledgling idea. Today, it is a global phenomenon that has developed into a new way for businesses and nonprofit causes to partner to achieve mutual benefits. Done with care and thought, cause marketing can be a powerful tool to help nonprofit organizations achieve their mission, build their brand, generate revenue, increase awareness, engage individuals, change behavior and attitudes, and make a difference in their community. It can help companies increase their bottom line, attract employees, create pride, appeal to customers and stakeholders, and secure the license they need to operate in many markets. Cause Marketing for Nonprofits provides the insights and tools needed to successfully partner for purpose, passion, and profits.

JOCELYNE DAW is Vice President, Enterprises, at Glenbow Museum in Calgary, Alberta, one of Canada’s largest and most entrepreneurial museums. Jocelyne is a recognized leader in creating cause marketing partnerships and social ventures for nonprofit organizations (recognized by the American Association of Marketing). She has actively used cause marketing as an important mission-based marketing and fundraising tool to advance community needs and programs in support of the environment, heritage, health care, arts, and culture. In 1988, Daw was National Executive Director for the Canadian Parks Partnership where she helped pioneer a national cause-related marketing program to raise money and awareness, and encourage citizen engagement for Canada’s national parks and historic sites. She is a frequent presenter, mentor, and teacher on the subject of cause marketing. For more information visit www.causemarketing.ca.

Cause Marketing for Nonprofits

Partner for Purpose, Passion, and Profits (AFP Fund Development Series)By Jocelyne Daw

Jossey-Bass

Copyright © 2006 Jocelyne Daw
All right reserved.
ISBN: 978-0-471-71750-8

Chapter One

The New Corporate-Nonprofit Engagement

Corporations have long been involved in supporting community, but when the first cause-marketing programs were successfully implemented, it signaled a dramatic shift in nonprofit-for-profit relationships: one that recognized corporate community support could be positioned at the intersection of business objectives and societal needs.

Cause marketing was initiated over 25 years ago. At the time many nonprofit professionals viewed it as a fledgling idea, one that should not be considered part of any serious fund development or nonprofit program. As well-constructed programs reaped benefits for companies and nonprofits alike, the number of programs continued to grow. Now more than two decades later, cause marketing has evolved and developed into a firmly established practice, a new way for corporations and nonprofits to achieve significant bottom-line results and community impact.

Cause Marketing: A Turning Point in Corporate-Nonprofit Relationships

Cause marketing was officially launched by American Express in the early 1980s. Between 1981 and 1984, American Express used this approach to support more than 45 local causes. Jerry Welsh, a senior vice president of American Express at the time and the architect of the cause-related marketing concept, believed that by giving people a local cause to rally around, it would encourage card members to use their American Express for local purchases. “We were giving money away, but we’re doing it in a way that builds business and helps the cause.” he explained. The cause promotions were successful and as then-Chairman of American Express Travel Related Services, Louis Gerstner Jr., said, “We now know we can do well by doing good.”

The early success of their local San Francisco cause-marketing initiatives led the company to coin and trademark the term “cause-related marketing” in 1983. That same year American Express pioneered the concept at a national level when it launched a three-month marketing campaign around the Statue of Liberty Restoration project. The objective: to increase card use and new card applications and at the same time raise money, awareness, and support for the nonprofit Restoration Fund. American Express donated one cent for every card transaction and one dollar for every new card application. The company also made donations based on purchases of their travelers’ checks and travel packages, excluding airfares, sold through its vacation stores.

American Express supported the promotion with a $4 million advertising campaign to reach existing customers and encourage new ones. The results were impressive. In just three months, the Restoration Fund raised over $1.7 million, and American Express card use rose 27%, while new card applications increased by 45% compared to the previous year.

When its first national cause-related marketing (CRM) program was initiated, then-Chairman and CEO James D. Robinson III sensed the company was introducing an innovation that could support a nonprofit organization while simultaneously increasing use of their card and differentiating the company. What he didn’t realize was that this early cause-related marketing program would be a turning point-one that demonstrated that mutually beneficial relationships could be built; nonprofit organizations had valuable assets and brands that, when combined with a corporate partner’s brand, marketing, and people, would appeal to the public and create shareholder and social value and publicly communicate the value of those involved. Cause marketing was to take corporate-nonprofit relationships to a new plateau.

Growing in Number, Range, and Sophistication

Over the past two decades, cause marketing has manifested itself in various ways and from its early beginning has grown in numbers, range, and depth. Today, cause marketing can include product sales, promotions, and program-driven collaborations between companies and nonprofit causes. The relationships include everything from one-off cause sale promotional activities to broader, longer term marketing relationships to what industry expert Carol Cone today calls Cause Branding: companies that make long-term commitments to causes that eventually become part of their corporate identity, culture, and corporate social responsibility palette.

Whatever the type or level, cause marketing can be seen everywhere. Check out at the drugstore and support the local food bank by adding a donation to your bill. Go to your local hair salon and a portion of the proceeds from the day’s sale goes to support the woman’s shelter in your town. Pick up a recent issue of a prominent women’s magazine, and readers will find ads encouraging them to “Go casual for a cause.” For almost 10 years, Lee Jeans has supported Lee National Denim Day, the world’s largest single-day fundraiser for breast cancer research, by encouraging women to wear jeans to work for a $5 donation. Since 1996, Lee National Denim Day has raised more than $40 million to benefit the Susan G. Komen Breast Cancer Foundation. At the grocery store, your purchase of a box of Cheerios during their three-month “Spoonful of Stories” promotion supports the national charity, First Book, with the goal of “encouraging kids to read” and supporting literacy. In Canada, support breast cancer research by signing up for the Canadian Breast Cancer Foundation CIBC Run for the Cure at the local bank branch.

Although many programs are straightforward, American Express, a leader in cause marketing, is an example of growth in sophistication and complexity of many of today’s cause-marketing initiatives. Beginning in 2003, AMEX Blue Card teamed up with VH1’s Save the Music Foundation to support school music programs while connecting with younger consumers. Through a series of year-round events, programs, and exclusive offers, American Express Blue Card members had unique music experiences that lent support to the Foundation.

The Blue for Music program and the Save the Music Foundation launched a year-long fundraising Blue for Save the Music at the Grammy Awards with a Grammy Viewing Benefit Event. Tickets for the benefit were available first to Blue customers. Proceeds from the evening went to the program. Following the launch ceremony, musical instruments and memorabilia used by awards show performers were auctioned via an Internet auction.

The goal of the partnership was to bring greater attention to the lifelong benefits of music education and to help restore music education in America’s public schools. Blue from American Express pledged to raise at least $1 million during 2003 toward restoring public school music education programs. In addition to financial support American Express contributed significant visibility via promotions, special events, and advertising. Boyd Tinsley, along with artists Sheryl Crow, Mary J. Blige, The Counting Crows, and Wyclef Jean, appeared in nationwide Blue for Save the Music PSA-style television ads that reveal how music has influenced their lives.

The multilayered program involved as part of the larger Blue for Save the Music Initiative an “Amplify Tomorrow” tour. This saw Infinity Broadcasting, one of the world’s largest radio broadcasting companies, and Blue from American Express conducting fundraising events in New York, Los Angeles, Chicago, Boston, and San Francisco through the summer of 2003. Many events were hosted at concert venues by station DJs and featured music performances by some of the industry’s hottest talent. Infinity Stations provided a series of on-air promotions and specialty programs. Onsite at the events, concert attendees were encouraged to visit the “Amplify Tomorrow” school bus and to purchase raffle tickets for musical instruments and memorabilia signed by famous artists. In addition, funds were raised through special ticket packages for concerts and exclusive showcases.

The Nonprofit Response

In some nonprofit circles, the early cause-marketing programs were viewed with apprehension. Would cause-marketing programs satisfy individuals’ charitable commitments and result in a decline of individual support? Would programs commercialize nonprofit organizations and take them away from their mission focus and scare off loyal donors? Would it result in corporations cutting back on their traditional philanthropic charitable giving?

Charitable donation concerns proved unfounded; despite a few bumps commercialism has not overtaken nonprofit-corporation relationships, and what was viewed with skepticism is being recognized as a way to build new corporate and individual revenue sources, extend message reach, and achieve important mission, project, and behavioral outcomes. Equally important, nonprofit organizations have begun to realize they too have valuable assets, including their own brand that could appeal to potential corporate supporters and be leveraged for significant additional support.

Harry Abel, a nonprofit pioneer in cause marketing, was hired from a marketing position at Coca-Cola to start a corporate relations department at the Arthritis Foundation. Joining the organization in the late 1980s, he took the advice of a corporate colleague and aimed to “think like a for-profit.” “I was advised to think linkages and to look at opportunities that could work for both our organization and a corporate partner.” It was a new way of thinking for nonprofit organizations, and Harry oversaw the launch of a number of cause-marketing programs including the first corporate-nonprofit commendation program. The Arthritis Foundation’s “Ease of Use” is a seal of approval for particular product attributes of benefit to arthritis sufferers that companies could apply and receive approval, for a fee, to use the logo on their product. He initiated a number of cause-marketing initiatives for the organization. He states, “Have senior leadership buy-in, chose your partners carefully, do risk assessment, and have carefully considered processes and procedures in place.”

Many national nonprofit organizations were leaders in creating cause-marketing relationships. Companies were looking for national causes with local implementations possibilities. Today, nonprofits at every level-local, regional, and national-are entering the field and developing purpose-built cause-marketing initiatives, hiring dedicated staff, and putting a major push on using cause marketing to leverage corporate resources.

The Food Bank of New York City is a great example of a nonprofit that has recognized the potential to generate additional corporate support, extend awareness and reach, and advance the mission. The 23-year nonprofit organization established an external outreach unit in 2001-2002 with a focus on building longer, deeper corporate cause-marketing partnerships. The program has helped to generate new funds, expand the amount of food collected, and extend awareness for the organization. Although corporate philanthropic financial support is still larger, cause-marketing relationships are growing in importance and provide significant awareness value as well as financial support.

An Essential New Link for Corporate-Nonprofit Engagement

Since the first cause-marketing programs were launched, the face of corporate community support has transformed and expanded. Corporations are moving beyond traditional philanthropic giving where they were anonymous, benign donors to an active and engaged approach that looks to create marketing and business benefits for the company and broader financial and resource benefits for the community.

With the ever-present emphasis on shareholder value, community involvement and corporate social responsibility are often being tied to business and marketing objectives, to ensure corporate profitability, manage costs, and creatively extend limited corporate resources in a competitive environment. As well, it isn’t enough for companies to do good; they want to be seen doing good and to obtain business and marketing benefits beyond just a halo effect.

As cause marketing becomes more prominent and the benefits proven, corporations are taking this new approach that combines corporate self-interest with altruism. According to experts in the nonprofit field, more and more traditional corporate philanthropic support is being replaced or augmented by cause-marketing arrangements and business-driven objectives. As a result, these more active cause-marketing relationships, although a component of corporate giving and social responsibility, are emerging as the new way many corporations are contributing to the community.

Marketing professors Philip Kotler and Nancy Lee’s 2005 book, Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause, looks at the role of corporations in contributing to social causes and initiatives. Of the six areas they describe, cause-marketing elements are squarely attached to three: corporate cause promotions, cause-related marketing, and corporate social marketing. Cause marketing is indirectly linked to two other areas: community volunteering (frequently a component of cause-marketing programs) and socially responsible business practices. The latter includes “investments to support causes,” an example of which is Starbucks working with Conservation International to support farmers to minimize impact on their local environment. Starbucks’ advertising of their involvement falls into the cause-marketing realm. Only corporate philanthropy described in the book lacks a connection to cause marketing. Clearly, cause marketing is an important tool in the corporate social responsibility palette.

The Committee to Encourage Corporate Philanthropy (CECP) is a national organization whose membership represents companies that account for 45% of all reported corporate giving. Their tracking reflects this shift to cause-marketing-oriented giving. In 2004, “traditional” charitable giving by CECP members represented just under 49% of all corporate giving. Strategic giving, much of which is cause-marketing driven where a company’s community support closely aligns with commercial and strategic business needs, represented 36%, and strictly commercial relationships was 15%. Together strategic and commercial relationships represented the highest percentage of corporate giving. The Committee analyzed where corporate community support emanated, finding that 36% came from corporate community affairs, 27% from corporate foundations, and the rest, 37%, coming from corporate operations, including marketing budgets.

The overall trend line is now well established. According to nonprofit and industry experts backed up by available statistics, more and more philanthropy involves input from the marketing team, and if a nonprofit can’t offer concrete ways for businesses to connect with tangible benefits including cause supporters or target audience, funding is less likely. The formerly quiet philanthropy providing support to a variety of deserving comers is being replaced by an emphasis on bottom-line, market logic for a growing portion of corporate support. Cause marketing is becoming the new corporate marketing and citizenship tool.

Supporting a specific cause and being public about this support gives companies identifiable personalities, demonstrates what they stand for, and helps them connect with customers, suppliers, investors, employees, and the community. Today consumers, employees, and other company stakeholders are thinking with their hearts, not just their heads, when they consider whom to work for or do business with.

The New Third Way: Cause Marketing-Part Marketing, Part Philanthropy

For nonprofit organizations, cause-marketing relationships are uniquely different from traditional corporate philanthropic gifts or sponsorship. Building the case for support and making the “ask” is the focus of philanthropic corporate giving. Philanthropic support is often centered on specific areas such as education, health care, or arts and culture and strategic in its approach-giving in specific geographic regions or to matters that are of interest to the company or their employees. Contributions are provided to support good causes without the expectation of profile beyond customary recognition in annual reports or on the Web site. Sponsorship, the most commercial form of corporate community involvement, focuses on a value exchange, the measurable value a business can get from sponsoring a specific event or activity. Sponsorship is guided by the hope and goal of so many impressions and specifically tying it to product sales spike, tank, or level set.

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Excerpted from Cause Marketing for Nonprofitsby Jocelyne Daw Copyright © 2006 by Jocelyne Daw. Excerpted by permission.
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