Conference Roundup: Reaching Out to Corporations
Following its 1983 campaign to fund the restoration of the Statue of Liberty, credit card heavyweight American Express was ordained the “father of cause marketing.” Every time people used their plastic to make a purchase, 1 cent was donated to the fund to restore Lady Liberty, and the effort raised $1.7 million.
“It was taking a risk at something new, and it worked,” Mikel Koon, president of Arlington, Va.-based consultancy Mosaik Strategies, said at her session “Cause Marketing: Corporate Chic or Corporate Savvy” at the 2008 Bridge Conference held last week in Washington, D.C. “They helped a cause and saw a 28 percent increase in (card) usage and 45 percent increase in new cards.”
American Express is no longer alone. Companies from Gap to Mattel to Target are spending large sums of money promoting philanthropic causes. Some do it because it’s chic to jump on the social bandwagon, while others find real value in supporting nonprofit organizations and their missions, she said.
Koon pointed to Mattel’s “Go Red For Women” Barbie as an example of corporate chic. Mattel donated $100,000 to the American Heart Association for its Go Red For Women campaign, which spreads awareness of the fight against heart disease, the No. 1 killer of women in the United States.
“Mattel didn’t get much out of it, just supporting a cause,” Koon said. “Mattel is reaching out to girls and showing them this is important.”
Then, there’s Gap’s partnership with (PRODUCT) RED. Half the profits from Gap (PRODUCT) RED sales go to The Global Fund to help women and children affected by HIV/AIDS in Africa.
“The Gap is a highly visible cause retailer,” Koon said. “Not only do profits go to the fund, but its participation builds the community in Africa. They had to agree to build jobs in Africa, and it uses cotton from Africa.”
Companies and nonprofits find themselves in win-win situations when they team up, Koon said. When cause marketing originated a few decades ago, she said, the major draw for companies was simply image enhancement. But not so much anymore.
Cause marketing provides a long list of unique benefits for companies, such as expanding their markets, developing communities, increasing employee retention and strengthening the workforce, increasing customer loyalty, and helping manage exposure.
“For compliance/managing exposure, this is helpful,” Koon said. “If a company does something and then reaches out to a community and fixes a problem … if a retailer learns there is unfair labor practices at one of their factories and then starts a fund to better train all factory workers … [it is] helping a community and managing the exposure to your company.”
Nonprofits benefit, too, and the advantages are more than just extra cash in their coffers. Nonprofits get corporate expertise; access to information, products and services; and a strengthened brand, which Koon said enhances an organization’s visibility and credibility.
She cautioned that most of these partnerships begin with the company reaching out to the nonprofit. But nonprofits can start a relationship with a company by doing their homework and approaching companies that have partnered with similar causes in the past. If a company has a history of donating to educational causes, then a school might have a good chance of building a relationship, for example.
“If you find a company that is right for you, then think about what you have to offer,” Koon said. “Identify your needs, and then reach out. The goal is to find a hook — what is unique about your organization — and then how you can benefit that company.”