Cause Marketing: Should There Be Transparency?

As the holidays approach, no matter where you live, what religion you are, or what holiday you celebrate, you are probably one of the millions of people around the world who will get together with their friends and family to celebrate.  Along with these celebrations, some people believe that it is a time for the “season of giving” to people less fortunate than themselves.  Many corporations also follow this spirit of giving.   From allowing their employees to volunteer their time, to making cash or product donations, there are numerous ways that they can give.   Some companies however are realizing the importance of giving back to their community not just during the holiday season, but throughout the year, and are creating Cause Marketing campaigns.

According to the Cause Marketing Forum website (www.causemarketingforum.com), “ cause marketing (also known as cause-related marketing) is an umbrella term that covers a rich range of marketing activities. Central to its definition is the idea of a marketing partnership between a business and nonprofit entity for mutual benefit.”  Cause marketing has made a lot of headway in several different types of industries.  Some examples include: the pairing of Proctor and Gamble’s Olay with the American Society for Dermatological Surgery for the common cause of fighting skin cancer, Pedigree Food and several animal shelters partnering up to promote animal adoption, and Kitchen Aid and the Susan G Komen Breast Foundation creating the “Cook for the Cure” campaign.

While it is great to see corporations working together with non-profits in an effort to make a difference in the community, it still is important to note that this is a marketing tool.  No matter how much “good” the corporation may be trying to do, they have to also be aware that these cooperative efforts, if done correctly, could significantly raise their profits.  There is a huge difference however between the good cause marketing campaign expanding their customer base or the current customer base consuming more of their products versus the for profit corporation actually creating a “strings attached” campaign with the non-profit where they actually are making money somehow off of the arrangements in forms of some kind of built-in financial return. 

This raises an interesting question as to whether there should be transparency to stakeholders on any type of cause marketing relationship.  I believe the answer to that question should undoubtedly be yes.  All cause marketing relationships should have a built in element of transparency to their stakeholders.  The Better Business Bureau (BBB) has made excellent headway on creating an outline for transparency in regards to cause marketing relationships.  According to the U.S. National BBB’s Standards for Charity Accountability, Standard 19 states that the charitable organization’s board should:   “Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), the duration of the campaign (e.g., the month of October), and any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).”

Even though these are great guidelines to follow to ensure transparency, not all companies that are in cause marketing relationships are following them.  The government should work closely with the Better Business Bureau to create guidelines for transparency of any cause marketing relationship.  This is the only way to ensure that the for profit companies are not getting built in financial return and are truly supporting their partner charity/organization.  In addition, until this occurs, both the for-profit and non-profit corporations partnering in a cause marketing relationship should create internal as well as external committees in which they are constantly monitoring the activities of the cause marketing relationship, and policing themselves for any actions that may seem contradictory to the guidelines that the Better Business Bureau has outlined regarding transparency.   This is the only way to ensure that a cause marketing relationship is a successful and socially responsible pairing.