Philanthropy & Funding

Cause Marketing Does More Harm Than Good

I believe that cause marketing programs erode the joy of giving, turn consumers into cynics, and contribute to the overall loss of faith and trust in the nonprofit sector.

At SoCap10 last week I had another round of conversations about Cause Marketing—those gimmicks where purveyors of some retail product promise to give “a portion of the proceeds” to some cause—and got very frustrated again. The use of the word “gimmick” probably betrays my sentiments toward these programs, but if you’re in any doubt see here and here. Lucy Bernholz’s recent post, Embedded Giving: Bad for You, Bad for the Cause is also definitely worth reading.

My frustration stems primarily from the utter lack of transparency and information these programs typically offer. As a result, I think they do more harm than good. I believe that cause marketing programs erode the joy of giving, turn consumers into cynics, and contribute to the overall loss of faith and trust in the nonprofit sector.

That frustration led me to think about whether there were any circumstances in which I would give cause marking the benefit of the doubt. If these programs were more transparent and provided more information, would my opinion of them be changed? I think the answer is yes—so I drafted a set of standards for transparency for cause marketing programs. These are the questions that, if they were answered, would lead me to give a program the benefit of the doubt. Personally I think that any program that doesn’t meet all of these standards should be shunned by nonprofits and consumers alike, but I know that’s unrealistic.

My goal in coming up with this list is ultimately to have some transparency standards adopted. That’s where I need your help. First, I’d like to ask you to think about these standards and whether they are right or how they can be made better. Second, I’d like to invite you to start grading cause marketing programs according to these standards. Let’s celebrate the programs that are moving toward doing the right thing and expose the worst practices where we find them.

I’ve published the standards and started grading some programs at Philanthropy Action.

In terms of the standards, I used these ground rules to develop the prototype: 

  1. the system has to simple, 5 standards or less
  2. the system has to be as objective as possible
  3. the system has to be able to distinguish between programs at a finer than binary level (e.g. not “good/bad”, but “dubious, questionable, OK, tolerable”—there I go giving away my priors again).

The Standards
My prototype is a five-star system based on meeting five basic standards. We get a ranking of zero to five stars based on whether the program conforms to each standard.

  1. The program says exactly what charity will receive the funds, with enough information for a person to find and investigate the charity on their own.
  2. The program says exactly how much money the charity will receive (either in total or from each purchase with a projection of the total and any minimum or maximums built-in.) Note that percentages, especially such nebulous percentages as “2% of the profits”, do not meet this standard. Tell me the money.
  3. The program says when the charity will receive the funds.
  4. The program says what the funds will be used for or if there are any restrictions on the use of funds. This is especially important when brands link up to very large charities that do lots of things in lots of places (e.g. Save the Children, United Way, World Wildlife Fund). This star isn’t about the good or bad of restricted funds, it’s just asking for full disclosure on the terms of the funds and what they will be used for.
  5. The program says why the charity was chosen. I don’t expect any program to meet this criteria, but I think it’s important to push corporations with charitable programs to use the resources at their disposal to help the general public find good charities. Corporations invest millions of dollars in these cause marketing campaigns. The least they could do is spend some of that money doing due diligence on the charities and telling the public what they find.

So what do you think? Are these the right standards to demand of a cause marketing program? What would you change, add or replace?

Just as important, rank some cause marketing programs and let us know over at Philanthropy Action how they scored. Joe Waters from Selfish Giving has already started by using the standards to rate his most recent cause marketing program—check out his thoughtful post on the standards and his self-evaluation.

Read more stories by Timothy Ogden.

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  • I think that CRM raises further questions about accountability too, beyond the financial integrity that you wrote about:
    - what is the product that is flying the CRM [insert cause] banner, and how may they be implicated in the actual cause being advanced? For example, alcohol companies supporting pink breast cancer causes. Alcohol consumption is an evidence-based risk factor for developing breast cancer.
    - what are some of the other activities that the company is involved in, and do these activities undermine the cause they are supporting in any way?
    - beyond raising funds, many claim that CRM ‘raises awareness’. is it enough to just raise awareness without facilitating actual social impact - and how do we measure true social impact, beyond the very superficial ‘buy me’ solution?

    And at some point, I wonder where the actual social organisations/causes have to take responsibility and draw some red lines around who they are willing to be associated with and adopted by. How can CRM be better regulated from that side of things too? The fact is that many of these causes do really need every penny they can get, but at what cost?

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