Q:

What is cause-related marketing?

A:

According to cause-marketing consultant Jocelyn Daw, cause-related marketing (CRM) is a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to:

• create shareholder and social value
• connect with a range of constituents (be they consumers, employees, or suppliers)
• communicate the shared values of both organizations

American Express first used the phrase "cause-related marketing" in 1983 to describe its campaign to raise money for the Statue of Liberty’s restoration. American Express donated one cent to the restoration every time someone used its charge card. As a result, the number of new cardholders grew by 45 percent, and card usage increased by 28 percent.

Other examples of cause-related marketing programs include:

- Requests for small donations for children’s charities at the supermarket checkout
- Public awareness campaigns for HIV/AIDS, breast cancer, and other causes
- Licensing of well-known charity trademarks and logos, like World Wildlife Fund’s panda

CRM is distinct from corporate philanthropy because the corporate dollars involved in CRM are not outright gifts to a nonprofit organization, so they are not treated as tax-deductible charitable contributions. Nonprofits potentially benefit from increased fundraising and exposure. Likewise, corporations that are socially involved potentially benefit from increased brand loyalty and employee morale. Studies have shown that for products of similar quality, consumers will consider the company’s image and reputation when choosing a brand. To find and develop CRM opportunities, nonprofit organizations should expand their research efforts beyond the traditional corporate giving directories and refer to resources in the business departments of public and/or academic libraries.

Courtesy: Grant Space