Relationships between businesses and nonprofits, sports organizations and local communities, entertainers and charitable foundations, are increasingly understood to be a strategic asset. For example, while corporate good works was once viewed as a way to mitigate risk, it is now seen as a core strategy for employee recruitment and retention—as well as key to shaping customer attitudes and loyalty and building bonds with supply chains and distribution channels.
As the value of such initiatives has increased so has the complexity. One size does not fit all. And lumping together all relationships with nonprofits under a term like “cause marketing” is to shortchange the potential to optimize return for all parties.
Here is our guide to the basic types of relationships, nuances included:
A term we coined to describe the growing prevalence of umbrella brands that may cover multiple nonprofit partnerships.
For example, The Coca-Cola Co.’s “Live Positively” is the umbrella brand by which the company promotes its altruistic efforts and encourages customers to engage.
An umbrella brand affords a company a bigger footprint. For example, presenting “Live Positively” alongside, say, Coca-Cola’s recycling programs or its partnership with World Wildlife Fund, will bolster the impact and ideally increase recall and credit of Coca-Cola’s good works.
The NBA’s “Read to Achieve” program is a year-round campaign to help young people develop a lifelong love of reading and encourage adults to regularly read to children. With an estimated reach of 50 million children a year, “Read to Achieve” is the most extensive educational outreach initiative in the history of professional sports. In addition to being supported by all 29 NBA teams, 16 WNBA teams, and the eight teams that make up the NBA's new minor league, the National Basketball Development League (NBDL), “Read to Achieve” is supported by the NBA's officials, parents and wives of players, and the NBA Players Association and Retired Players Association.
A campaign like “Read to Achieve” can extend to multiple brands or teams. For example, NBA teams implement their own “Read to Achieve” programs in local markets. Some are sold to sponsors.
To exemplify the synergies that can emerge, the Boston Celtics Shamrock Foundation promotes “Read to Achieve” in partnership with Houghton Mifflin Harcourt, and builds on the Mayor’s literacy initiative “ReadBoston”—all with the goal of ensuring the city’s elementary school students read at grade level by middle school. Participating students are challenged to read 20 minutes per day, 5 days per week. Clearing that benchmark earns the students Celtics prizes, e.g. Celtics-branded notebooks or game tickets. Schools with the highest level of participation host assemblies with Celtics players and other VIP’s. The school that wins the yearlong writing assignment challenge receives a library upgrade.
These brands can serve an important role in internal communications. For example, Procter & Gamble’s “Live, Learn and Thrive”--a corporate initiative through which P&G channels products and resources into more than 100 programs across 60 countries to improve life for children around the world—is a source of employee pride and contributes to recruiting and retention. Efforts run the gamut from life-saving vaccinations and safe water in Africa to safe homes across Europe; educational opportunities in Asia to early childhood development in Latin America. The initiative, centered on enhancing child wellbeing, is woven into P&G’s philanthropic giving, cause marketing, product donations, disaster relief and employee engagement/HR programs.
In some cases, an organization will make such a large and long-term commitment to a ProSocial initiative that it becomes a stand-alone brand.
Take General Mills’ “Box Tops for Education”: Over 20 years the program has generated $700 million for the nation’s schools. It has also become an asset with so much equity that General Mills attracts cosponsors. For instance, Ford cosponsored “Box Tops for Education” with its own offer to give away 250,000 box tops.
Ditto, the San Francisco 49ers STEM Leadership Institute, which helps talented students achieve their potential, is “powered by” Chevron.
- Accenture “Skills to Succeed”
- Avon “Breast Cancer Crusade”
- Cisco “Networking Academy”
- ConAgra “Child Hunger Ends Here”
- Coca-Cola “Live Positively”
- Gucci “Chime for Change”
- “Hanes for Good”
- Home Depot “Team Depot”
- Hyundai “Hope On Wheels”
- NBA “Read to Achieve”
- Procter & Gamble “Live, Learn and Thrive”
- “Silver & Black Give Back”: the San Antonio Spurs’ umbrella for local youth empowerment through support of youth sports and the Team Up Challenge
- Yoplait’s “Save Lids 2 Save Lives” for Susan G. Komen Breast Cancer Foundation, which encourages consumers to save the lids from specially marked Yoplait packages and send them back to General Mills. The number collected is tallied and linked to the size of Yoplait’s donation to Komen the following year.
CAUSE MARKETING / CAUSE-RELATED MARKETING
An arrangement between a business and a nonprofit whereby a purchase, or other consumer activity such as taking a test drive or opening an IRA account, triggers a donation to the nonprofit. It is a transaction-based relationship; unlike philanthropy, money spent on cause marketing is expected to show a return on investment. Cause-related marketing campaigns typically run between six weeks and three months.
Interest in cause-related marketing was sparked in 1983 by the American Express Company’s support of the Statue of Liberty’s renovation. The company’s then Senior VP of worldwide marketing, Jerry C. Welsh, created a program that donated a penny for each use of the American Express card and a dollar for each new card. A four-month period saw $2 million raised for Lady Liberty and a 28 percent jump in transaction activity. And the concept that doing good was good for business gained momentum.
Example: Donation with Purchase
“Purpose without purchase is irrelevant. Purchase without purpose is transactional and unsustainable,” said American Standard Brands CEO Jay Gould. Enter “Flush for Good”, the toilet maker’s initiative to improve 20 million lives through better sanitation. According to Gould the program, a partnership with UNICEF and Water for People, drove a more-than 60 percent increase in sales.
Cheesecake Factory donates $0.25 per slice of designated specialties (for Fall, 2016, it’s Pumpkin and Pumpkin Pecan Cheesecake) to Feeding America. The program guarantees a minimum donation of $150,000 to be split between the nonprofit’s national office and local food banks.
On one day in August, participating Dairy Queen stores donated $1 or more to their local Children’s Miracle Network Hospital for each Blizzard sold.
Example: Donation with Participation
Cheesecake Factory’s “You Dine, We Donate” promo gave 10 percent of a diner’s check to Feeding America if the customer brought in two cans of soup. On top of the funds raised from check donations, some 392,000 cans were donated to local food banks.
Example: Buy One, Give One
- Walgreens and the UN Foundation’s “Get A Shot. Give A Shot”
- Josie Maran Cosmetics’ mascara GOGO (Get One Give One) for City of Hope
- Roozt’s “One Member One Meal” program donated a meal to Feeding America for every sign-up to its online marketplace of social enterprises
- CommonBond’s 1-for-1 “Pencils of Promise” initiative donates the full cost of a school year for a student abroad for every domestic student loan funded
Pairing two or more brands to create a separate and unique product. Product Red’s corporate partnerships take the form of co-branding. As nonprofit brands typically have higher levels of trust, such alliances can build the commercial partner’s brand equity and establish other desirable associations.
Example: Target and FEED’s co-branded line for “aspirationals” that benefits Feeding America. Understanding that Millennials want fun, simple ways to make real, measurable impact – and that they want to do it with style and favor the 1:1 giving model popularized by Toms, which has given more than 11 million pairs of shoes to needy children--FEED highlights the number of meals funded per purchase (e.g. buy this $25 storage bin and Target will provide 20 meals to needy families). A limited-time-only campaign of 50 products included home, sporting goods, stationery, apparel and accessories with a casual, hand-crafted, ‘Americana’ feel, ranging from $3 to $400, and each piece displayed the number of meals donated to Feeding America accordingly.
Another example: Bank of America’s “Pink Ribbon Banking”, which gives $3 for each Komen credit card account opened and activated and .08% of all net retail purchases made with the card. Komen also receives $3 for each annual card renewal, as well a donation for every checking account opened. Credit cards and checks carry the Susan G. Komen logo.
Grants typically managed by a company’s community affairs or public relations department. Corporate giving programs are not separately incorporated, and so are not subject to the laws that a private foundation would be. Companies may deduct up to 10 percent of pre-tax income for direct charitable contributions (this includes giving to the company’s foundation). The average rate is closer to one percent. Corporate giving programs can involve cash, employee matching gifts and in-kind gifts of a company’s products or services or volunteers.
Support for a nonprofit with no expectation of commercial or economic benefit. However, research findings reveal that corporate philanthropy does result in improved corporate image and attitudes toward the firm.
Fees are restricted and tied to cost of the program being funded (as opposed to the value delivered to the donor). Companies are increasingly bringing more focus to their donations, tying philanthropic activities to business goals and objectives. Synonym: Patronage
CORPORATE SOCIAL RESPONSIBILITY (CSR)
A company’s commitment to behave ethically in certain defined areas. This is rooted in the belief that businesses are accountable for their actions not just in a formal sense to their owners, but also in less well-defined ways to a group of wider stakeholders. It is typically motivated by risk management rather than altruism.
Terms used under this banner include: Corporate Citizenship; Corporate Accountability; and Business Ethics/Practices such as fair trade and recycling.
We believe that CSR as currently construed does not go deep enough—Enron was a poster child for CSR while cheating shareholders and stealing from employees. The real win, for society and for business, is to reimagine CSR not as a checklist or dutiful responsibility, but fully embracing the stance as Corporate Social Opportunity. This entails embedding it into the DNA of how a company operates, from supply chain and investor relations to HR and partnerships.
The use of a company’s resources—channels, media, events, employees, etc.—to raise money for a nonprofit. For example, many supermarkets have canisters or scannable coupons for charities at the check-out lanes. The amount raised typically dwarfs both the rights fee sponsorship model and the philanthropy model. For example, since 1987, Walmart and Sam’s Club have raised more than $900 million for Children’s Miracle Network Hospitals.
Our term for companies with a purpose greater than the product or service being sold. This is typically a reflection of a founder in a position to take a stand likely to be deemed too risky or inflexible by publicly traded companies. While the stand may be off-putting to some, it solidifies loyalty among others. Unlike social entrepreneurs, however, mission marketers did not start their companies to serve society but have made purpose part of the DNA of their brand.
- John Paul Mitchell
- Seventh Generation
An alliance in which a company or media outlet promotes a nonprofit and its message. While no cash changes hands, the company’s promotions build the cause’s brand and affords its message wider circulation, which should lead to new volunteers and donors, behavior changes, etc. Environmental Defense Fund has a group of promotional partners that discusses the threat of global warming on packaging, collects signatures in support of legislation, etc.
Example: Food Network is a promotional partner of “Share Our Strength”. It produces PSAs and devotes ad time and space to SOS messaging on Food Network, FoodNetwork.com and in its monthly magazine.
Brands often use sports and entertainment sponsorships to promote their social good initiatives. This practice is driven by research that reveals the impact of sports and entertainment sponsorships is amplified when tied to a nonprofit. Such synergies are significant as nonprofits themselves typically lack distribution channels of their own to promote the sponsor.
- Whirlpool/Habitat for Humanity/Reba McEntire Tour;
- Target/St. Jude/NASCAR; and
- Hublot/UEFA/United Against Racism.
Campaigns designed to improve the welfare of society and its citizens by influencing beliefs and behavior.
- Programs focused on increasing physical activity, consumption of less sugar, smoking cessation and prevention of sexually transmitted disease
- Johnson & Johnson works with Safe Kids Worldwide to encourage parents to teach safety practices such as using helmets when cycling to their children
- Sport Club Recife’s promotion of organ donation in Brazil
A fee paid to a property—cash or in-kind— in return for access to the exploitable commercial potential associated with that property. Unlike philanthropy, sponsorship is done with the expectation of a commercial return.
A term we created to refer to the deployment of marketing dollars to promote philanthropic initiatives.
Example: Bell Canada’s “Let’s Talk” mental health initiative began with a 5-year, $10M per year commitment from the company, and raised additional funds for Canadian mental health programs linking donations to texts, tweets and FB shares about mental health on designated days
An organization supports and encourages employees, retail partners, and/or franchise members to volunteer for nonprofits.
Rationale: Global organizations today must navigate a new world of work. As demand for talent escalates, the balance of power in business is shifting to the employee. In this world, organizations need to create incentives beyond pay and vacation time to stay relevant. Opportunities like volunteering, which enable employees to find deep and personal meaning in and outside of work, matter.
In addition to the social capital created, corporate volunteering programs contribute to:
Employee Recruitment, Satisfaction, Retention and Productivity.
Example: In celebration of Earth Day, during April and May some 1,800 Timberland employees donate 13,000 hours of services to 60 projects in 20 countries.
Timberland’s “Path of Service”, introduced in 1992, provides full-time employees up to 40 paid hours annually to serve in their communities. Timberland organizes two annual global service events for employees and partners: Earth Day in the spring, which focuses on environmental projects, and “Serv-a-palooza” in the fall, centered on addressing community-based needs.
- AT&T works with the American Red Cross to supply phones and technicians for disaster relief efforts
- “Comcast Cares Day”
- Tesco “Community Champions”
- Timberland “Serv-a-palooza”
By Lesa Ukman
FOR INFORMATION ON MEASURING THE SOCIAL CAPITAL CREATED BY YOUR PARTNERSHIPS, OR ON HOW TO CREATE PROGRAMS THAT BUILD SOCIAL CAPITAL, CONTACT LESA@LESAUKMAN.COM.