What Is Cause Marketing and Why It Matters to Nonprofits
Indeed, in many cases, consumption philanthropists are exacerbating the very harms they wish to reduce. At the same time, consumption philanthropy feeds the systems and institutions that contribute to many social problems in the first place. Yet consumption philanthropy sidesteps both this requirement and, more generally, contact with people in need. The result is that consumption philanthropy stabilizes,more than changes, the system (the market) that some wouldargue led to the poverty, disease, and environmental destructionphilanthropists hope to eradicate. In short, consumption philanthropy lulls people into a false senseof doing good through their purchases, even as they are potentiallydoing harm through their purchases.
Case Study
But one problem with relying on consumers to right the world’swrongs is that most consumers are not very interested in or capableof righting the world’s wrongs. The primary goal of people in marketplacesis to make choices that fulfill their self-interested, individualmaterial needs and desires. In this capacity, they generally have littleimpetus to consider “the public” or “the public good.” Caught up inthe transactions of buying and selling, they have little opportunity toquestion the fundamental principles of corporate organization. Andunlike citizens who share in the collective authority, responsibility, and dignity of public life, individual consumers have little reasonto wonder how larger political-economic structures might createsocial problems in the first place. Consumers also seem to win from participating in cause marketing.They get additional information about a charity or cause,as well as a convenient way to spend their disposable income oncharitable causes. For example, consumers who were planning to buychicken noodle soup or cereal anyway can choose to buy the “pink”Campbell’s chicken noodle soup or “pink” Cheerios to meet theirneeds, while also providing funds for breast cancer research.
- Peter Singer, Peter Unger, and others believe that the drowning child example or other cases of rescue imply a duty to aid the victims of absolute poverty.
- These hidden costs include individualizing solutions to collective problems; replacing virtuous action with mindless buying; and hiding how markets create many social problems in the first place.
- Philanthropy originated in the Greek ideal of philanthroposor “love of humankind.” According to Aristotle’s NicomacheanEthics, philanthropy allows people to enact the all-important virtuesof generosity, benevolence, kindness, compassion, justice, andreciprocity.
- Had Starbucks included its baristas or its customers, rather empowering them to determine how to make a real difference, it’s doubtful that this particular campaign would have been given the go-ahead.
- Unfortunately for them, consumers have become far too good at identifying discrepancies between what a company says and what it does.
- Findings suggest that the smaller the corporate donation, the more likely it is that consumers will believe that the nonprofit organization is being exploited by the for-profit corporation.
The Hidden Costs Of Cause Marketing
At the same time, a company can make the wrong decision when forming a partnership based around a cause. No matter what sort of campaign a firm is implementing, businesses focus on performance and results in the end. That can leave their efforts looking unaligned with what otherwise would seem a natural cause. The fact that some causes get more attention than others is simply an unavoidable fact. Before cause marketing arrived on the scene in the early 1980’s there wasn’t a philanthropic Eden where charities were given equal time and equal resources.
Benefits of Cause Marketing for Businesses and Nonprofits
The basic concept is the company promotes a cause as part of its marketing strategy and in return it gains goodwill, stronger customer loyalty, and often increased sales while the cause receives funding, exposure, or other support. Designer label and clothing manufacturer Joseph Abboud experienced such a problem in 2010 when it joined with retailer Nordstrom to run a campaign to benefit victims of the major earthquake in Haiti by sending money to the charity Doctors Without Borders. The companies pledged a «portion of the proceeds» generated from suit sales over a week.
Because middle market companies are more dependent on close relationships with customers than larger competitors are, connecting on an issue that people have a widespread awareness of can lead to a strengthening of those relationships. Do that with a cause that forms the right fit with your company, and you could end up with a hit campaign. Thanks to social media, consumers are now able to talk back to brands in a public domain and have the potential to affect brands positively or negatively, depending on whether they feel a brand is worthy of acceptance or rejection. Indeed, consumption may very well create more of the kinds of problems that we had hoped philanthropy would fix. Relying on individual consumer choices, consumption philanthropy is unsuited to the scale or complexity of the problems it seeks to fix. In short, consumption philanthropy lulls people into a false sense of doing good through their purchases, even as they are potentially doing harm through their purchases.
- With RED, ‘doing good’ becomes a fashionable accessory of brand management and the practices of hard commerce.
- Explore the best college fundraising ideas in 2025—from talent shows to digital crowdfunding.
- For example, your company could create a promotion that donates a certain amount to a nonprofit for every sale you make on a specific product or service.
- Campaigns going forward will often feature partnerships with underrepresented communities so marketing efforts don’t just raise awareness, but also work to shift power and resources in a fairer way.
The Hidden Costs of Cause Marketing
This paper looks at two aspects of cause-related marketing (size of the corporate donation and size of the cause-related promotion), and examines the impact of these two variables on consumer perceptions and participation in a cause-related marketing promotion. Findings suggest that the smaller the corporate donation, the more likely it is that consumers will believe that the nonprofit organization is being exploited by the for-profit corporation. Also, consumers were more likely to find the product involved in the cause-related marketing program to be appealing when the corporate donation was larger. This scenario repeats across corporate America daily, where business leaders grapple with workforce expenses that devour budgets while limiting access to global talent pools. Companies now face the reality that traditional in-house teams carry financial burdens beyond visible salary figures, creating operational inefficiencies that smart organizations are addressing through strategic workforce transformation. Obviously these examples of greenwashing as well as others have seriously hurt the companies that weren’t being transparent.
More specifically, it aims to understand the ethical behaviour of consumers, while introducing diametrically opposed feelings, scepticism and warm glow. A quantitative study based on experimentation was conducted and online self-managed questionnaires were handed to 300 Internet users. The results of this research show that the size of the donation does not directly contribute to the purchase intention, but the hidden costs of cause marketing it rather provokes scepticism in the case of a highly-sized donation.
The ugly: Burger King’s ‘Feel Your Way’ campaign
Even simple efforts like local sponsorships or charity tie-ins can build trust and impact. Track both social outcomes (funds raised, people helped) and business metrics (sales, engagement). A brand partners with a nonprofit to raise funds or awareness, like a shoe company donating a pair for every pair sold. Just ‘doing’ cause marketing doesn’t necessarily guarantee your charity or business will automatically strengthen a brand’s reputation and deliver meaningful impact. The most common challenges revolve around authenticity in marketing, building and maintaining stakeholder trust, and demonstrating a tangible ROI on social good initiatives. Marketing is a huge field that brings together many different approaches and processes.
Greenwashing, mismatched partnerships, lack of transparency, and over-commercializing the cause. Since then, major brands like TOMS Shoes, (RED) Campaign, and Patagonia have popularized the approach through blending commerce and cause into a win-win scenerio for all involved.
Cause marketing today is no longer just a brand add-on, it’s an evolving partnership between business, technology, and social good. The concept gained prominence in the early 1980s, most famously through American Express’s 1983 Statue of Liberty Restoration Campaign. Every card purchase triggered a small donation to the restoration project, raising millions while increasing card usage by 27%. This model proved that marketing for good could also deliver strong business results. Professor Eikenberry calls her article The Hidden Costs of Cost Marketing, but cause marketing is a lot more transparent than other forms of philanthropy.
In The Statute of Charitable Uses of 1601, Queen Elizabeth outlined the causes that the English legislature found worthy of charitable donations. This list includes, but is not limited to, elderly relief and care for injured soldiers and orphans. Following Queen Elizabeth’s enumeration in The Statue of Charitable Uses, wealthy corporate millionaires became increasingly interested in such philanthropic ideals.
Yet lurking beneath this rosy surface are some disturbing consequencesof combining consumption and philanthropy. I do not meanthe often-cited risks of cause marketing, which include misalignmentbetween the charity and the corporate sponsor, wasted resources,customer cynicism, or tainted images of charity. Most critiques ofconsumption philanthropy focus on these pesky problems of executionwithout questioning its basic underlying assumption—thatconsumption philanthropy, if done well, would do good for all. Two veterans of consumer psychology, marketing, and entrepreneurship provide a guide to using social media for social change. Diversity and inclusion still remain at the forefront even though it does seem to be trailing off.
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