Reaping the benefits of cause marketing
Starbucks, Nike, Pepsi, Uber and scores of other major companies regularly use cause marketing to burnish their image and reach customers. The not-for-profit organizations that partner with these companies can reap multiple benefits, including financial support and raised awareness of their mission. Cause marketing can take many forms, so it’s important to find both the partner and form that match your nonprofit.
How is it different?
Cause marketing is different from a tax-deductible donation or corporate charitable giving program. When a cause marketing partner provides your organization with funds or services, it’s ideally rewarded with an enhanced public image, greater customer loyalty and other marketing advantages.
With this kind of corporate financing and business expertise backing your nonprofit, you might be able to increase your visibility and educate new audiences about your cause. As members of the public become acquainted with your mission, you can probably expect your volunteer and donor ranks to grow. And new connections with your corporate partner’s customers, vendors, employees and other stakeholders can open up all kinds of avenues for growth.
What forms does it take?
Cause marketing takes several forms. For example, transactional giving programs typically involve online platforms such as iGive and AmazonSmile that enable shoppers to donate a dollar amount or percentage of each purchase to their chosen charities. Or donors may be able to convert customer-loyalty program rewards (such as airline miles) into cash contributions.
Another form is message promotion, where a company uses its resources to promote a cause-focused message — usually one related to its own products. Early in the COVID-19 pandemic, The Body Shop launched its “Time to Care” campaign, which used social media to promote self-care and celebrate health care workers. As part of the initiative, the company partnered with shelters and assisted living communities, donating money and cleaning supplies.
Licensing agreements are another option. A company may pay to use your not-for-profit’s name and branding on its products. For example, AARP has, over the years, licensed its name to several insurance and health care companies. Because these partnerships can have legal complications, they’re recommended for larger, more sophisticated nonprofits.
How do you get started?
Before entering into a cause marketing agreement, carefully research potential partners and partnership forms. Be sure to work with an attorney to negotiate terms with partners and draft agreements. Contact us for help determining the financial potential of cause marketing and the possible tax consequences.
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