Cause Marketing: An Innovative Fundraising Model

Abstract

Sustaining the work of nonprofit organizations requires continued funding, and most nonprofits rely heavily on membership and donor-based models to support their work. However, as individual giving has declined, especially in the present economic climate, nonprofits are looking for other fundraising approaches, and many are exploring the potential of cause marketing. Cause marketing provides the missing link between corporate support and societal needs, but the real power of cause marketing lies in its ability to engage individual consumers in the support of an initiative.

Cause marketing is defined by Cone Inc. (www.coneinc.com) as ”a business strategy that helps an organization stand for a social issue to gain significant bottom line and social impacts while making an emotional and relevant connection to stakeholders.” Cause marketing expenditure has increased steadily over the last several years, with an approximate market spend of $1.50 billion in 2008, according to the IEG Sponsorship Report (www.sponsorship.com).

Cause marketing involves the sale of a product or service with designation of a percentage of profits to a specific cause or nonprofit organization. Successfully utilized by the Susan G. Komen Breast Cancer Foundation and the Product Red Campaign, cause marketing creates a mutually beneficial relationship between an organization and the business supporting it. According to a 2007 survey of 1,000 adults conducted by Cone Inc., over 66 percent of Americans consider a company’s business practices when deciding what to buy, 92 percent have a more positive image of a company that supports a cause they care about, and 87 percent are likely to switch from one brand to another if quality and pricing are the same, but the other brand is associated with a good cause (Cone Inc. 2007). As consumers become increasingly alert to the social and environmental impact of their purchases, more corporations are responding by exploring their own cause marketing opportunities.

By pairing its product or service with a nonprofit organization, a business can increase sales, improve brand image, generate positive public relations, and help save lives. Likewise, cause marketing benefits nonprofits by generating greater awareness of their cause and by raising money to fund their work. This approach allows businesses to engage in an important social issue while giving the public an easy way to help by simply choosing one product over another.