Consider the last time you went to a store to buy a new toothbrush. Step into almost any convenience store in the United States, and you are bombarded with choice. You’ll have to make a choice between dozens of comparable products. These toothbrushes will differ in color, shape, bristle strength, brand, and packaging, but many people will make a choice without fully understanding why. In his book, The Paradox of Choice, Barry Schwartz argues: “Though Americans have more choice than any group of people ever has before, and thus, presumably, more freedom and autonomy, we don't seem to be benefiting from it psychologically.” Schwartz believes that an overabundance of choice means that we are less satisfied with our decisions. Even though we have more toothbrushes and so many other things available to us than ever before, we are less satisfied than ever.
This idea is increasingly relevant when it comes to online shopping—an industry that will generate $262 billion this year. Consider that Walgreens.com offers nearly 400 toothbrushes. Search for “toothbrush” on Amazon, and you’ll get around 18,000 results—from there, you can sort by department, feature, shipping option, or reviews. And among this multitude of options, brands are scrambling to differentiate themselves and their products in a way that leaves their customer feeling satisfied.
Charities face a similar paradox of choice. According to the National Center for Charitable Statistics, there are currently more than 1.5 million nonprofit organizations in the United States. If a consumer’s decision process is primarily strategic and logical, a donor’s choice is primarily emotional. Although differentiated by mission, size, location, and history, the vast majority of charities offer the same basic value proposition to their donors: the emotional fulfillment of generosity. In this way, charities face a larger-scale paradox of choice than any for-profit entity. There is a reason why we’ve never heard of donor remorse, and why the average donor retention is about 40 percent. Charities offer a level of satisfaction to donors that brands can’t replicate.
In their “identifiable victim effect” study, Wharton Professor Deborah A. Small, along with her colleagues George Loewenstein and Paul Slovic, explain that with charitable giving, "money is often concentrated on a single victim even though more people would be helped if resources were dispersed or spent protecting future victims." The bigger-impact, more strategic course of action might be to disperse a donation among a greater number of people in need. The authors explain that donors make choices “intuitively, based on spontaneous affective reactions.”
Let’s face it: No one has a spontaneous, affective reaction over a toothbrush. Before cause-marketing, only the best (and best-funded) brand marketers were able to spark that kind of reaction in consumers and create differentiation outside of price, quality, promotion, or positioning—and sometimes it was enough to make people tattoo a logo onto their bodies or pass on their brand loyalties from generation to generation.
But charities that own emotional differentiation are creating partnerships and licensing deals that could make a toothbrush stand out. You can spend all day weighing bristle strength against shape and color, but what if you had a choice to purchase one that would generate a $1 donation to breast cancer research or provide a child in need with a reciprocal toothbrush? This differentiation is more powerful than red or green.
According to the cause-marketing forum in 2012, “Forty-seven percent of consumers have bought a brand at least monthly that supports a cause, representing a 47 percent increase from 2010.” In a recent sponsorship report, the consulting firm IEG predicts that cause sponsorship will reach $1.78 billion this year. The largest brands in the world—think Nike, Coca-Cola, and Delta—have made cause-marketing a priority on a number of campaigns. Other companies, such as Toms and Warby-Parker, have built an entire brand around the idea of doing good and cause support. Companies such as our own We-Care.com and 1% For the Planet give consumers a way to find companies that support charity and to make more cause-supporting purchases by letting them know that a portion of their purchase will support a charity. Consumers have more choices than ever before, and companies that are scrambling to differentiate their products are investing in the emotional power of cause-marketing.
As more corporations realize the potential of cause-marketing, more charities will have the opportunity to create partnerships that result in exposure and revenue. Charities need to balance new donation and exposure opportunities with new image risks, such as brand dilution or appearing commercial. The best partnerships are always mutually beneficial.