Philanthrophy Interrupted?

Cause marketing, which had its origins more than 30 years ago -- longer according to some -- is not JUST big business today. It is a new way of DOING business and evolving rapidly.

Cause marketing was a $1.62 billion industry in 2010 and is increasingly popular with businessess.   And for good reason. According to a recent survey released by Cone Communications:

• Eighty-one percent of consumers around the world want companies to address key social and environmental issues.
• Ninety-four percent of consumers surveyed say they are likely to switch brands to support a cause if both brands are similar in price and quality.
• Seventy-six percent of consumers have, in the past year, bought a product that has an environmental benefit and sixty-five percent have bought a product because it was associated with a cause.

Businesses used to think that cause marketing/social responsibility was an option. Clearly it no longer is. But even more so, perhaps the roles of companies, corporations, and charities are blurring?

First, business interests now devote considerable resources to nurturing relationships with nonprofits as experience has shown that there is more value over the long term than just funding "one off" charitable activities. Secondly, nonprofits are increasingly receptive to relationships with corporations because cause marketing is arguably less resource intensive compared to the hoops through which charities must jump for traditional foundation philanthropy (i.e. grants).

 

Beyond that, corporations themselves are engaging in "internal cause marketing." Take Levi's for instance and the launch of their Shape What's To Come in 2011.  And finally, the true sign of a "tipping point" may be recent legislative action taken in seven states -- including California -- to pass "benefit corporation" laws. In short, these laws create a new kind of corporation legal required to create a tangible positive impact on society and the environment, consider the interests of workers and communities, and report on their progress in a comprehensive and transparent way. 

 

Where does the impetus for all of this come from? According to Joe Waters, Co author of Cause Marketing for Dummies, nonprofits need to prepare for the "end of corporate philanthropy," and understand that in today's economic environment, companies must receive a return on their investments. It may also be due to the fact that a new breed of young business leaders such as Howard Buffet are personally committed to finding solutions to the world's thorniest social problems.  To do this, they expect that nonprofits don't duplicate efforts, but line up systematically  in the casual chain and act more like businesses.

Cause marketing will continue to evolve and as part of it, so will standards for good practice and the possibility of real value for those individuals that it is ultimately intended to benefit.