Selling A Good Feeling
It’s important to differentiate cause-marketing from non-profit marketing. Non-profit marketing only supports the non-profit. Things like advertisements, events, direct mail, etc. all seek to raise money solely for the non-profit organization. This is an important distinction, as cause-marketing not only benefits the non-profit, but a money-making firm as well. Cause-marketing links donations to sales, so there is a clear mutual benefit there.
Anything that can be sold can be used for cause-marketing, but some products are particularly successful. Naturally, products that can be consumed publicly, such as a t-shirt with a logo or slogan on it, are the best choice for a cause-marketing campaign. The heart of cause-marketing lies in the difference between public and private donations. Businesses and non-profits that engage in cause-marketing are banking on the fact that people want other people to know when they have done a good deed. As one study found, “part of the benefit to consumers of purchasing products linked to charity is getting to communicate their allegiance to the cause to others who see them proudly displaying the logo”. No matter what reasons someone has for supporting a cause, they also probably like when other people know they support that cause. Being known as philanthropic is rarely seen as a bad thing. If someone were to write a personal check to an organization and send it off in the mail (or more likely donate on their website), presumably no one would know they have done such a thing, unless that person tells them. But let’s be real, announcing to your friends you made a donation to a charity can come off as slightly self-righteous. Cause-marketing allows consumers to be bashful. They don’t need to tell people “I’m a good person, look at this charity I support”. Instead, the the bracelet with a pink ribbon charm, or water bottle with a polar bear on it, does it for them.
Jerry C. Welsh, the American Express executive that created the company’s partnership with the restoration project, would later go on to say in the Harvard Business Review that it “brought American Express increased visibility and prestige, and [it] helped differentiate us from our bankcard competition”. Getting to the heart of cause-marketing, Welsh explained that “clever, informative, positive promotion of an under appreciated cause or misunderstood problem could spark both the interest and the commercial patronage of customers, contributing to the good reputation and the profits of the sponsoring company”. By aligning themselves with a worthy cause, American Express both increased the use of their credit cards by customers, as well as boosting their corporate social responsibility.
With the money that was raised through the March of Dimes, the NFIP was able to award grants to medical researchers, and in 1954, a polio vaccine was developed. It was a textbook successful cause-marketing campaign. The March of Dimes, in partnership with the Marriot Corporation used radio, Hollywood, and the “personal appeal of the President” to raise enough money to accomplish their goal- nearly eradicating polio. The problem was solved, Marriot Corporation got an image boost, and in 1958, the March of Dimes changed their mission from eradicating polio to preventing birth defects in newborns.
Pinkwashing is a subset of a much larger phenomenon known as cause-marketing. Existing research tends to define cause-marketing as “the process of formulating and implementing marketing activities that are characterized by an offer from the firm to contribute a specified amount to a designated cause when customers engage in revenue-providing exchanges that satisfy organizational and individual objectives”.
That may sound complex, but cause-marketing is likely something you encounter every time you walk into Target or CVS. Cause-marketing involves a for-profit business (the firm) coming to an agreement with a non-profit group (the designated cause) to market a product as benefiting that cause. In other words, the two groups will reach an agreement that usually results in a certain percentage of sales from the product going to the charity. The hope is that the for-profit business will see increased sales and improved brand reputation since their product is linked to a charity, and the charity, in turn, gets a sizable donation.
The term “cause related marketing” was first coined by credit card company American Express in 1983. The company was looking for a worthy cause to align themselves with, and ultimately settled on a Statue of Liberty restoration project that was happening at the time. Throughout October, November, and December of 1983, American Express contributed one penny to the statue restoration every time one of its credit cards was used. The campaign resulted in both $1.7 million being raised for the restoration project, as well as a substantial increase in usage of American Express credit cards. According to a New York Times article published in 1986, “the company coined the phrase to differentiate these campaigns, which tie charitable contributions directly to product promotions, from standard corporate donations where dollars are given outright”. Instead of American Express just simply making a donation to the project, the donation was dependent on customer action, and the onus was put on the consumer.
While the first use of the term “cause related marketing” may not have been until 1983, the first major instance of the phenomenon dates back to 1938 and President Franklin Delano Roosevelt. On the eve of World War Two, FDR launched the National Foundation for Infantile Paralysis (NFIP), whose mission was “a systematic program to uncover the mysteries of polio and to lend a helping hand to Americans suffering from the disease”. FDR himself had polio, so the cause was very personal to him and he urged Americans to donate what they could. Seeing as finances were tight for most Americans during the war, a popular radio host at the time noted that “Nearly everyone can send in a dime, or several dimes.
However, it takes only ten dimes to time a dollar, and if a million people send only one dime the total will be $100,00” . And thus, through a partnership with the Marriot Corporation, the March of Dimes was born. Dimes started pouring into the White House by the thousands, the first March of Dimes raised $268,000 in 1938.