As marketers find it ever more difficult to make products stand out from the crowd, they’re building their brands by aligning them with good causes. This article describes how to play the game and where to find suppliers. It lists research services, books, and other sources of information and advice.

BACKGROUND

As companies increasingly seek a return on investment in all areas of their business, many are shifting their support of worthy causes from straightforward contributions, with no expectation of financial return, to cause-related marketing (CRM) programs. In CRM, corporate sponsors support specific social or charitable programs with goods and services, as well as dollars. The sponsor’s return: greater visibility, enhanced reputation, and increased sales. Thus "doing good" benefits the corporation’s bottom line as well as the worthy charity.

CRM takes a variety of shapes, including special events, promotions, percentage-of-sales contributions, and product donations. It differs from traditional corporate charity both in intent and funding. Straightforward contributions typically come from, say, a corporate contributions department or a company foundation. Dollars invested in CRM programs generally come from the marketing or advertising budget.

Corporations began giving more thought to CRM in the 1980s, when government cutbacks sent nonprofits in search of new sources of aid. Corporations saw an opportunity to pick up the slack and reap their own rewards in the process. They figured it was in their interest to help ensure that the communities in which they operate have a strong economy, educated populace, low crime rate, and a low incidence of poverty and disease.

But besides helping to strengthen the community, CRM is assuming an important role in marketing strategy. "In the minds of consumers, there’s little difference between brands today," says Stan Friedman, managing partner of WorldCom, a Santa Monica, CA, firm that helps create alliances between corporations and nonprofit organizations. "Twenty-first-century brand success will be based on marketing by core values—the beliefs that govern a company." Properly designed CRM programs give a company the opportunity to articulate and implement its core values.

Reflecting both the dual purpose of this marketing technique and the cynicism of some observers, CRM has an astonishing number of aliases: socially conscious marketing, social philanthropy, strategic philanthropy, philanthropic marketing, and point-of-purchase politics. Whatever the name, it has led to controversy in philanthropic circles. Those who maintain that it’s not "right" for corporations to profit from their support of worthy causes are "naive," says Dwight Burlingame, director of academic programs and research at the Center on Philanthropy at Indiana University, Indianapolis. They overlook the reality that corporations are obligated to make money for their shareholders.

Others protest that nonprofits risk compromising their ideals when they enter these relationships. (See "A Caveat" below.) Done right, however, CRM can expand a company’s marketing horizons. A properly executed program promotes the sponsoring corporation, provides much-needed assistance to the worthy cause, and, in some instances, helps consumers too. "There are multiple ways for a company to be a good corporate citizen," says Burlingame. "Cause-related marketing is a way to do it and meet the company’s objectives."

STATISTICS

In 1999, a projected $7.6 billion will be spent on all sponsorships, including sports, arts, entertainment, events, and causes, according to IEG Sponsorship Report. CRM is expected to account for 8 percent of that total, or $630 million.

Results of another survey indicates that CRM is playing a greater role in influencing consumer behavior. The 1997 Cone/Roper Cause-Related Marketing Trends Report is based on a survey of 2,000 consumers conducted in July 1996 by international marketing research firm Roper Starch Worldwide, New York City, for Cone Communications, Boston, a strategic marketing company. The report’s key findings:

• 76 percent of consumers say that when price and quality are equal, they are likely to switch to brands or retailers associated with CRM. Compared to results of a similar survey conducted in 1993, there were increases of 10 percentage points regarding brands and 14 percentage points for retailers.
  
  
• Only 21 percent of respondents are skeptical of a company’s motives for participating in CRM, down from 58 percent in 1993.
  
  
• Consumers most receptive to CRM are women age 18-49 (84 percent) and parents of young children (81 percent).
  
  
• 59 percent of respondents want sponsors to focus on improving the quality of life locally rather than nationally (26 percent) or globally (9 percent).
  
  
• Issues on which respondents think sponsors should focus their efforts: crime (41 percent), environment (35 percent), public education (35 percent), poverty (24 percent).

LAUNCHING A PROGRAM

A major difference between CRM and other sponsorship or promotional programs is the tight link between the program and the sponsoring company’s reputation. Managing the program well can have broad benefits; botching it can cause long-term damage. These suggestions will help you do it right:

Be honest about your motives. Acknowledge that you are participating in this program to help your company as well as the cause that you are supporting. Otherwise, you’ll undermine the program. Your customers are smart enough to see through any pretense.

Seek a cause that is a sensible match for your company’s product or service. It’s not difficult to find candidates; all nonprofit organizations need additional sources of revenue. But if a cause is inappropriate (for example, a tobacco company supporting a youth group) or not associated with what your company does, it won’t be believable and won’t generate a positive response.

Find out what causes are important to your employees. This is an excellent way to focus your search for a good cause. Where do your employees donate their money? Where do they volunteer their time? Not only will this help you make a choice, but it will also strengthen employee support for your efforts. Another option is to find out what matters to your customers. For example, Working Assets, a long distance telephone and credit card company, chooses its causes exclusively from those nominated by customers (see Case Histories).

Investigate a potential CRM partner carefully. Be sure that the organization spends its money wisely, putting a substantial percentage of its revenue into programs and services rather than promotion and fund raising. Study its annual report and tax return (Form 990). "Recognize that nonprofits operate close to the bone, but that doesn’t mean they’re not well run," says Patricia F. Lewis, president of the National Society of Fund Raising Executives (NSFRE), Alexandria, VA. "Notice the quality of the staff. Be sure that there is a strong governing board and established policies." Note: The national office of a nonprofit organization and its local chapters might operate differently. If you are considering working with a local chapter, investigate it separately.

Decide if you want to handle the program in-house or enlist the aid of a sponsorship or marketing agency. Such agencies can act as matchmakers and negotiate the details of the partnership.

If you choose to handle the program in-house, allow a full year to identify and investigate a partner and prepare the agreement.

Set measurable, comprehensive objectives. If you plan to donate, say, a percentage of sales of a particular product, or of the value of coupons redeemed, or of the value of credit card purchases, assign a numerical value to your goals; otherwise, it won’t be possible to measure your accomplishments. For example, is your objective a dollar increase or percentage increase in sales? Donation of a certain amount of money or number of products to the cause? Bear in mind that you can have more than one goal. If enhanced reputation or greater visibility is among your CRM goals—and it usually is—set goals as you would for any public relations campaign.

Spell out the partnership agreement in detail. This is not a simple cash donation; it is a relationship in which both parties have rights, obligations, and expectations. NSFRE was instrumental in creating a Donor Bill of Rights that outlines what donors should expect from the charitable organizations to which they contribute.

Watch out for common stumbling blocks. Four key areas that should be clarified in any agreement are:

• Who is authorized to approve the agreement?
• Who will approve advertising copy?
• Who will have a say in how the funds given to the nonprofit will be distributed?
• Will the corporation have access to any lists, such as names of individual contributors to the nonprofit?

Clarify any competitive restrictions. If you’re a coat manufacturer planning to enter into a CRM agreement with a shelter that aids the homeless, presumably you want category exclusivity; that is, you want to be the only coat manufacturer with which the organization is allied. If so, put it in the agreement. There may be other types of garment manufacturer you want to exclude and some to which you have no objection. Make sure everyone understands your position, and put it in the agreement.

Have an exit clause. As careful as you may be, there’s always the possibility that something will sour. The agreement should spell out the conditions under which either party can terminate the relationship and what both parties’ obligations are in such a situation. Also important: What will happen to any funds or products that have not yet been distributed?

Have an attorney and an accountant review the contract terms and financial terms.

Think long-term. Some CRM programs are one-time or short-term. Example: the Live Aid concerts held in Philadelphia and London in 1985 for the benefit of African Famine Relief. But, increasingly, programs are being extended over a period of years, and sponsors should expect to make a commitment. Withdrawing support without a compelling reason for doing so can do serious damage to your company’s reputation. All the more reason to evaluate your partner and have a comprehensive contract.

Communicate within your own company. As noted above, CRM programs and outright contributions usually are handled by different departments in a company. "If the corporate contributions officer isn’t involved, and the marketing department is doing this directly, they could both be working on a project of a similar nature," cautions Dwight Burlingame. "It’s surprising how often that happens."

Monitor and evaluate CRM just as you would any advertising or promotion program. Did you achieve your objectives? Did sales rise? Did your customer base increase? Did you accomplish what you wanted to for the charitable cause? Did you receive more media mentions? Did you get mentions in additional media outlets? 

CASE HISTORIES

 Polaroid Corp. and the National Center for Missing & Exploited Children (NCMEC) joined forces when a Polaroid marketing manager heard a NCMEC speaker say, "A current photo is the single most important tool in finding a missing child." The company realized that the cause is critical: The FBI estimates that more than a million children are reported missing every year.

Polaroid’s solution was Project KidCare, which makes use of the company’s photographic technology and also gets it involved in community affairs. At the heart of the program is the KidCare ID, a passport for children that has a space for a current head-and-shoulders photo, personal data, vital emergency information, and seven rules for child safety. Also included are directions on how to use the booklet in case of an emergency. If a child is reported missing years after the photo is taken, the photo can be "age-progressed."

The project makes sense for both Polaroid and NCMEC. "It is a natural fit for us and for the National Center," says Jim Tierney, Marketing Manager for Project KidCare. As the leader in instant imaging and because of its broad distribution channels, Polaroid is ideally positioned to achieve the program’s objectives:

• increase awareness of the issue of missing children;
• educate both parents and children about safety measures;
• provide photo IDs by finding sponsors for local KidCare events.

To enlist hosts and sponsors for local events, Polaroid mounts an ongoing marketing communications effort that includes direct mail, telemarketing, and awareness-building on its Web site. There are also ads in magazines published by law enforcement agencies and civic organizations.

KidCare’s progress has been impressive. Since the program’s introduction in 1993, more than 7 million children have received KidCare IDs, and Polaroid has contributed more than $500,000 to NCMEC. In 1997, 2,400 events were held, resulting in more than 2 million children receiving KidCare IDs.

Polaroid has secured sponsors at both the national and grass-roots level. These include such companies as The Home Depot, Ford Motor Co. dealers, and PostNet. Local groups include chambers of commerce, Rotarians, Kiwanians, and Lions, as well as fire departments and local law enforcement agencies.

For organizations that want to get involved with the community, becoming a KidCare sponsor is not hard, says Tierney. Polaroid provides a free, 32-page "How to Host a KidCare Event" guide and sells turnkey KidCare kits, which include a Polaroid instant camera, film, KidCare IDs and backdrop. For every 150 IDs sold, Polaroid donates $15 to NCMEC. Hosts of an event provide the space for picture-taking, enlist employees or volunteers to process KidCare IDs, and explain the program to parents and children. For those hosts looking to enlist the support of other organizations, co-sponsors are an ideal way to help defray the cost of sponsoring an event.

By acting as hosts and sponsors of KidCare events, companies become recognized as local representatives of a national project developed by Polaroid and NCMEC. Hosting an event is a natural way for civic groups, retailers, and other businesses to expand their community involvement and generate favorable publicity. For retailers, the event often can be tied to the store’s overall merchandising objectives: When parents bring their children to the store to have their picture taken, it builds store traffic and attracts people who otherwise might not shop there.

For more information about Project KidCare, click on the company’s Web site at http://www.polaroid.com/caring/kids or call Jim Tierney at 781-386-5431.

Working Assets, San Francisco, describes itself as "a socially responsible long distance telephone and credit card company." It donates 1 percent of customers’ telephone charges and 10 cents per credit card purchase transaction to nonprofit organizations working for peace, human rights, economic justice, or the environment. An annual ballot listing 40 such organizations is sent to customers, whose votes determine the allocation of funds. The funds are unrestricted general-support grants.

Customers may also nominate groups to appear on the ballot. To do so, they must submit to Working Assets a copy of (1) the organization’s most recent annual report, (2) its proof of nonprofit status, and (3) its most recent financial statements. All nominations are evaluated by the Tides Foundation, a philanthropic foundation.

Working Assets contributes to a long list of causes, rather than just a few, because "our goal is to be a catalyst for social change, and achieving social change will require progress on many fronts," says a spokesperson. Part of the CRM program, in fact, is to encourage people to make their views known to leaders in politics and business. Customers may make two free calls per day to targeted decision makers listed on their monthly phone bill from Working Assets. Customers may also request that CitizenLetters be sent to targeted political or business leaders.

"We do not provide a separate evaluation of the program," says the Working Assets spokesperson. "We consider the growth in our donations to be the best evidence of our success." In 1986, the company’s first year of operation, it donated $32,000. In 1997, it donated nearly $3 million. More evidence of its success: In 1997, Working Assets was named to Inc. magazine’s list of the 500 fastest-growing privately held companies for the fifth consecutive year. Revenues in 1996 were $104 million, up 59 percent since 1992.

The company’s recommendation to others considering CRM programs: "Directly involve customers in the causes and keep the cost of administering any donations program quite modest relative to the donations themselves."

A CAVEAT

Inadequate preparation and management of a CRM program can tarnish the nonprofit, the sponsoring corporation, or both. A cautionary tale is the aborted pact between the American Medical Association and Sunbeam Corp. In the summer of 1997, the AMA agreed to endorse nine products in Sunbeam’s Health at Home line, including blood-pressure monitors and thermometers. In return, Sunbeam would pay a percentage of sales to the AMA in the form of "royalties." The AMA would receive funds, which analysts say might have reached millions of dollars, for its research and education programs. For Sunbeam, the AMA seal of approval would provide a competitive advantage that could significantly boost sales.

But there was an immediate outcry both from consumer groups and from medical professionals. The former questioned whether the AMA would evaluate honestly the efficacy of products. They were also uncomfortable with the organization encouraging consumers to buy products that might be more costly, but not necessarily better, than competitive products. An article in the New York Times quoted Paul Davis Jones, a principal of Boston-based IDPR Group, a consultant to nonprofit organizations and corporations, as saying, "The ordinary consumer may see the AMA name on a product and interpret that Sunbeam is a philanthropic donor to the AMA, instead of a participant in a marketing deal." Others suggested that the AMA would be violating its own code of ethics by, in effect, recommending a product in which it had a financial interest.

Within days of announcing the deal, the chairman of AMA’s board of trustees revoked it, saying the board had not approved it. Sunbeam’s chairman responded by suing the AMA for breach of contract. Sunbeam apparently escaped without damage to its reputation, but it lost out on a great opportunity for CRM because someone neglected to do due diligence.

SUPPLIERS

Advertising, public relations, marketing, and sponsorship firms can help corporate sponsors find an appropriate partner, develop a CRM program, and negotiate the agreements. Other types of suppliers, such as caterers, decorators, and audiovisual companies can help in the planning and execution of events.

IEG Sponsorship Sourcebook lists 475 agencies (from sponsorship sales to client entertainment), 325 suppliers (from mobile video screens to custom research), and 1,700 sponsorship opportunities plus information on the 300 most active sponsors. Also helps sponsors evaluate opportunities by including details on attendance figures, budgets, and current sponsors. 438 pp. $340 for IEG Sponsorship Report subscribers, $415 nonsubscribers. Call 800-834-4850.

ISES Worldwide Resource Directory lists ISES members in more than a dozen countries. Includes special-events producers, audiovisual companies, rental companies, and entertainers. 157 pp. Free with membership in ISES (see Associations), $99 to others. Call 800-755-4737 or 317-571-5601.

PMA’s annual membership directory includes lists of consultants and advertising agencies. 164 pp. For sale only to members, $45. Call 212-420-1100.

Promo magazine’s annual Sourcebook includes a listing of suppliers that can help with CRM programs. 228 pp. Free to subscribers, $49.95 to others. Call 888-892-3613; click on http://www.promomagazine.com. 

To find a supplier, go to #9520, Supplier Finder

ASSOCIATIONS

IEG (formerly the International Events Group) covers sponsorships in sports, arts, entertainment, events, and causes. It conducts research, publishes reports, newsletters, and directories, presents workshops, and organizes an annual conference. Call 800-834-4850. IEG Network includes answers to frequently asked questions, a glossary, information on the annual conference, sponsorship opportunities, and a job bank. Click on http://www.sponsorship.com

International Special Events Society (ISES) has more than 2,000 members in more than a dozen countries. Members represent both corporations and nonprofit organizations. It offers professional accreditation (Certified Special Events Professional or CSEP), a conference for professional development, and a membership directory. Call 800-688-4737 or 317-571-5601. ISES On-Line is an online bulletin board for the special events industry. Click on http://www.ises.com.

National Society of Fund Raising Executives (NSFRE) is an association whose 18,000 members are responsible for generating philanthropic support for a wide variety of not-for-profit, charitable organizations. It publishes newsletters, legislative updates, a membership directory, and a quarterly journal called Advancing Philanthropy. It also holds an annual International Conference on Fundraising, with workshops, leadership forums, round tables, and plenary sessions. Call 800-666-FUND; click on http://www.nsfre.org

Promotion Marketing Association (PMA) is made up of people who use promotional programs. Members include manufacturers of packaged goods, cosmetics, and pharmaceuticals; consultants, and advertising agencies. PMA offers a three-day course on Basics of Promotion Marketing for entry-level and junior personnel. It publishes a newsletter, Outlook, five times per year, and an annual membership directory. Also holds an annual Promotion Law Conference and an annual Promotion Update Conference (see below). Call 212-420-1100; fax 212-533-7622; click on http://www.pmalink.org/.

 

CONFERENCES AND TRADE SHOWS

For a list of Industry Events, go to #9510, Calendar of Industry Events.

RESEARCH SERVICES

IEG Intelligence Reports include a report on causes. Each report analyzes fees, opportunities, competition, and trends. $265 for IEG Sponsorship Report subscribers, $295 nonsubscribers. Call 800-834-4850.

IEG SR Information Searches conduct a customized search of articles about sponsorship, by company or property. It will provide details on what your parent company, sibling brands, retailers, or competitors sponsor. $122 for IEG Sponsorship Report subscribers, $245 nonsubscribers. Call 800-834-4850.

Promo magazine offers a fax-back service for its special reports, directories, and other industry information, including its annual feature on CRM. Prices vary from $9.95 to $17.95 each. Call 800-254-1785.

BOOKS

IEG’s Complete Guide to Sponsorship explains how and why sponsorship works, what it’s worth, and how results compare to advertising and sales promotion. There’s a section on why sponsorships fail, a sponsorship glossary, a checklist of sponsor rights and benefits, and case studies of successful sponsorship measurement. 44 pp. $49 for IEG Sponsorship Report subscribers, $59 nonsubscribers. Call 800-834-4850.

The following books are available from ISES, which offers discount prices to members. To order, or for membership information, call 800-755-4737 or 317-571-5601.

Special Events: The Best Practice of Modern Event Management—Second Edition, by Joe Jeff Goldblatt, director of the event management program at George Washington University, focuses on the business skills that event managers need. Incudes practical tips for proposal writing, marketing techniques, and risk management. 382 pp. $45 member, $59.95 nonmember.

Creative Event Development: The Strategic Steps to Success in the World of Special Events, by Elizabeth Wiersma, president, Wiersma Event Marketing, includes ways to set goals and see if an event can be used to meet them. $125 member, $139.95 nonmember.

Creating Special Events: The Ultimate Guide to Producing Special Events, by Linda Surbeck, president, Master of Ceremonies, is a complete guide to planning and implementing promotional events. Includes a section on fund-raisers. 271 pp. $35 member, $38.95 nonmember.

The Special Event Risk Management Manual, by Alexander Berlonghi, covers such things as health and safety, promotions, and crowd management. 346 pp. $120 member, $135 nonmember.

The Dictionary of Event Management, by Joe Jeff Goldblatt and Carol McKibben, defines and clarifies terms relating to all components of event management. 256 pp. $35 member, $39.95 nonmember.

PUBLICATIONS

IEG Sponsorship Report is published biweekly. It covers trends, analyzes industry issues and categories, reports on sponsorship deals, and presents case studies. Also lists requests-for-proposals and positions available. Subscribers receive discounts on other IEG products. $415/year, $340 for not-for-profits. Call 800-834-4850.

Promo, the Magazine of Promotion Marketing, is published monthly. It is edited for marketers in promotion and marketing, including manufacturing, retailing, advertising, direct marketing, promotion agencies, and marketing service companies and suppliers. It features cause-related marketing in its February issue. $65/year. Call 888-892-3613; click on http://www.promomagazine.com.

Special Events, a monthly trade magazine that covers the special events industry, has some 24,000 readers around the world. Free to ISES members, $36/year to others. Call 800-543-4116; click on http://www.specialevents.com

eventworld, the official publication of ISES, runs as an insert in every issue of Special Events. It reports on the latest trends and provides practical information regarding the special events industry. Call 800-688-4737.

The following publications occasionally include articles on cause-related marketing:

Advertising Age. Weekly. $119/year. Call 800-678-9595.

BrandWeek. Weekly. $130/year. Call 800-641-2030 for general information, 800-722-6658 to subscribe.

Sales & Marketing Management. Monthly. $48/year. Call 800-821-6897.

Sales and Marketing Strategies and News. Nine issues/year. $49/year. Call 815-963-4000.

RELATED SMN ARTICLES

For information that has a bearing on cause-related marketing, see Doc. 2015, Corporate Events.