In the market for a good cause
Corporations are increasingly selling products that will benefit certain charities.
By CHRISTINA REXRODE
Published November 23, 2006
It didn't start with Lance Armstrong, but he sure gave it a boost.
When the gods of philanthropy created nonprofits, corporate sponsorships dawned soon after. But lately, charities have leaned toward a fundraising strategy that encompasses both companies and consumers: cause-related marketing.
The term applies when a company sells a specific item or service and gives at least part of the profit to a charity.
It happens when you support cancer research by buying a yellow wristband, a trend that cyclist Armstrong ignited. Or donate to AIDS research by buying a red T-shirt at the Gap. Or help the Salvation Army by purchasing a Christmas ornament at Target.
"It's a nationwide thing," said Janet McGuire, a spokeswoman for the Salvation Army in St. Petersburg, "and it's just taking off like crazy."
One organization, New York-based Charity Brands Marketing, estimates that cause-related marketing will grow to a $1.34-billion industry in 2006, up about 20 percent over last year.
But Dwight Burlingame, the associate executive director of the Center on Philanthropy at Indiana University, said the numbers are difficult to measure. Some companies don't disclose such spending, and some file it under charitable giving when it should be filed under advertising.
Burlingame said cause-related marketing originated in the late 1970s, when American Express agreed to donate to a campaign to refurbish the Statue of Liberty whenever a purchase was made with one of its cards.
'Wave of the future'
Though corporations' charitable giving has been on the rise for several years, Burlingame said, charities can always benefit from expanding their sources of income.
"There are so many good causes out there," said Ed McGonigal, the corporate director of donor relations at the Tampa-based Shriners Hospitals for Children, "so there's a lot more competition for the dollars."
He said the Shriners have engaged in cause-related marketing on a very limited basis, occasionally allowing a car dealer or restaurant to donate part of their proceeds from grand openings.
"We've traditionally operated under a system where we're very restrictive about allowing the use of our name to really promote any commercial product," McGonigal said. "We realize it cause-related marketing is certainly the wave of the future, and something we're going to have to do."
A matter of trust
Such campaigns do the sponsoring companies no harm, either. They bring people into their stores and warm the hearts of potential customers.
A 2004 study by Cone Inc., a strategic marketing firm in Boston, found that eight in 10 Americans say that corporations can win their trust by supporting worthy causes. That's an increase of 21 percent since 1997.
Following a trend
If all goes well, the consumers win, too. Instead of just writing a check to their favorite charity, they can wear their support on their sleeve. Or their wrist. Or their lapel.
The consumers' outward support, nonprofits hope, will translate into further involvement with the charity.
"You hate to use the word 'trend,' " said Kathy White, a deputy director at the Salvador Dali Museum in St. Petersburg, "but it definitely has a trendy element to it."
The Dali Museum accepts corporate sponsorships for its exhibitions and other programs, but doesn't technically engage in any cause-related marketing.
But despite its many virtues, cause-related marketing has its pitfalls.
Any time a charity partners with a corporation, it's imperative that the nonprofit pick an appropriate company.
"If you're a cancer-free campaign, and you're being sponsored by Philip Morris - that's going to be pretty problematic," said Burlingame.
Tim Marks, chief development officer at Metropolitan Ministries in Tampa, said he won't pursue cause-related marketing because he doesn't want individual donors to feel like they're not as important.
"There's an illustration in the Bible of the widow's mite," he said. "Who gave the most: the rich person or the person who gave all they had? We appreciate it all."
But without even trying, Metropolitan Ministries found itself on the receiving end of cause-related marketing this week, when the Tampa Bay Lightning and the St. Pete Times Forum announced a deal to donate two meals to the ministry for every person who bought four tickets to certain events.
"We didn't ask for it," Marks said. "But if a corporate entity wants to donate a proceed of what they're doing, we'll accept it and be thankful for it."
Christina Rexrode can be reached at (727) 893-8318 or firstname.lastname@example.org.
[Last modified November 22, 2006, 22:33:39]
[an error occurred while processing this directive]