Cause-related marketing is a powerful marketing tool that business and nonprofit organizations are increasingly leveraging. According to the Cone Millennial Cause Study in 2006, 89% of Americans (aged 13 to 25) would switch from one brand to another brand of a comparable product (and price) if the latter brand was associated with “good cause.” Earlier studies by Cone indicate an upward trend in the number of Americans who associate their own buying habits with cause marketing as well as an expectation that those companies to be “good corporate citizens.” These studies also show a substantial increase from just before to just after the September 11, 2001 attacks.
Numerous other studies have also been conducted to show that cause-related marketing has helped to increase a company’s profits. For example, in the cause marketing campaign by American Express (to which the term “cause marketing” is attributed), the company saw a 17% increase in new users and a 28% increase in card usage.
The possible benefits of cause marketing for nonprofit organizations include an increased ability to promote the nonprofit organization’s cause via the greater financial resources of a business, and an increased ability to reach possible supporters through a company’s customer base. The possible benefits of cause marketing for business include positive public relations, improved customer relations, and additional marketing opportunities.
Cause marketing can take on many forms, including:
• Product, service, or transaction specific
• Promotion of a common message
• Product licensing, endorsements, and certifications
• Local partnerships
• Employee service programs*
But are there ethical issues of which we should be aware before entering into a marketing relationship with a business? What if, for example, our organization’s mission is to support children’s health? Should we enter into a cause-marketing program with Ste. Michelle Wine Estates?
Ste. Michelle Wine Estates was ranked among the top ten producers of premium wines in the United States. Ste. Michelle is a highly respected and ethically run company. It is a good corporate citizen, making donations to charities in its head quarter’s community. It is also a subsidiary of Altria, the parent company of Phillip Morris USA, the country’s leading cigarette manufacturer.
Let us say that Ste. Michelle Wine Estates was willing to promote our organization’s name in its marketing materials. In exchange, it would pay our organization a significant sum. Do we sell our name?
While the AFP Code of Ethics does not specifically tell us whether cause marketing is ethical or unethical, it does provide us with certain guidelines which we can use to help us make some decisions.
The first consideration falls under Standard No. 1, “Members shall not engage in activities that harm the members’organization, clients, or profession.”
Could we say that allowing Altria, through its subsidiary Ste. Michelle Wine Estates, to “purchase” our goodwill would harm our organization, clients or profession? It could be argued that entering into a contract which puts a public halo over a corporation whose products might harm children (in this case, wine and tobacco) is contrary to the ethical underpinnings of our charity’s mission.
But, Phillip Morris and Ste. Michelle Wine Estates publicly oppose underage smoking or drinking. Does their public stance mitigate our concerns? Would our decision be different if the corporation’s fee was used to educate parents and children on the harmful effects of smoking or drinking?
A similar concern could be raised by a food pantry entering into a cause-marketing agreement with a manufacturer of soft drinks. Does the food pantry have an obligation to encourage its clients to make healthy food choices? Or, can the food pantry negotiate with the manufacturer that its name will only be used in association with “healthier” low sugar, caffeine-free products?
Finally, should this be the concern of a development officer? Isn’t it our job to get money in the door?
Of course, as a member of the Association of Fundraising Professionals we hold ourselves out as professionals who come to our careers with integrity and high standards. I would argue that we are the perfect employees to raise these questions and participate in discerning the answers.
*This information was drawn from Wikipedia’s article regarding Cause-Related Marketing.