THE BLOG

Cause Marketing, Selfishness Drive Consumer Giving

04/06/2011 02:59 pm ET | Updated Jun 06, 2011

New research out of the University of Michigan confirms what I always knew was true: I was right to name my cause marketing blog Selfish Giving. After giving college students the choice between donating through a cause marketing promotion or donating directly, the students that chose the former felt more selfish, less generous and even less happy.

Maybe I should change my blog to SelfishStingySadGiving.com.

I'm going to hold off. And you should wait to take off your "pink" running sneakers, or hide your Product Red coffee mug until you read beyond the three headlines from this recent study.

Cause marketing decreases giving, happiness. The Michigan study, which was conducted with 300 college students in a student union, only looks at one type of cause marketing: purchase-triggered donations. These "costless" donations are made by the company when the consumer buys a product or service. The consumer contributes nothing and gets something in exchange.

As an example, a current promotion by Boston retailer iParty is donating 100 percent of sales from Japanese erasers to the tsunami relief effort. To date, they've raised $5,000. iParty shoppers only need to buy the erasers to trigger the company donation.

These gifts aren't completely selfish, as the company is making a real donation to the cause, something it doesn't have to do. And consumers have a choice of whether or not they purchase the cause product, which impacts how much the company gives to the cause.

Regardless of whether you call it selfish giving or charity, the Michigan study contends that cause marketing has a steep downside as it leads to decreased giving and happiness.

But most of the evidence we have on "enlightened giving" paints a different picture.

  • Large causes like Komen for the Cure, Feeding America and St. Jude Children's Research Hospital have had great success with cause marketing and no apparent decrease in other types of giving.
  • Even after Komen's misstep in 2010 with Kentucky Fried Chicken and Buckets for the Cure, the program still raised $4 million and had little ill effect on the nonprofit's brand. Being selfish paid off quite nicely.
  • Studies by Cone and Edelman show overwhelming approval of cause marketing, especially among Millennials (which include the college age students from the Michigan study) and moms.

It's important to understand that few nonprofits pursue cause marketing strictly for revenue. Only a small percentage of a nonprofit's revenues come from corporate giving, which includes cause marketing. Savvy causes recognize that the larger value of cause marketing is to reinforce and extend their brands, which will drive giving in other key areas. Bottom line: causes wouldn't engage in cause marketing if donors didn't like it and it hurt giving in other areas.

Consumers are unclear of how much cause marketing raises, and where donations go. Researchers claim that because many cause marketing campaigns are unclear (i.e. "A portion of proceeds from the sale of this item will support local cancer charities") consumers may believe they are giving a lot more than they are, which may explain why they feel justified in giving less. A lack of transparency and clarity is a problem in cause marketing, but this is improving as consumers are demanding more information and accountability from companies and causes.

Out shopping this past weekend, I found a FEED bag at Pottery Barn that benefited the U.N. World Food Programme. It was clearly marked that $12.50 from the sale of the bag benefited the UNWFP. I'm also optimistic that the mobile web, location-based services and QR codes will better clarify and explain cause marketing promotions to consumers.

Causes need to be wary of unscrupulous companies. The studies' lead researcher Aradhna Krishna warned last week that charities shouldn't sell themselves short in cause marketing deals. "Before causes join up with companies, they should be a bit more careful," Krishna advised.

Two reality checks on purchase-triggered cause marketing programs:

First, while partnering with a cause is certainly good marketing, it's only one part of the marketing mix for businesses. Companies succeeded before cause marketing existed 30 years ago and many do today without it. In my experience with these programs, companies are more committed to mission than marketing. They understand that the purpose of cause marketing is to build favor with consumers. There's no incentive to shortchange a nonprofit -- you can't steal a halo.

Second, purchase-triggered donation programs are generally executed by large nonprofits who know how to protect their interests and strike deals with companies. (Purchase-triggered programs executed by smaller causes and companies raise little money, hence the preference for direct donation programs like coin canisters or pinups.) If you reviewed the list of required "minimum donations" for purchase-triggered programs at the Komen for the Cure corporate partner page, you may reconsider who has the upper hand.

Cause marketing isn't perfect. But we need to weigh the results of a study involving 300 college students with the tremendous growth and generally positive reception cause marketing has received, especially over the past few years.

Yes, cause marketing can be selfish giving. But so can any type of giving when self-interest and altruism collide. Perhaps donors are equally less generous and unhappy after the naming of a building at a college, museum or hospital. Yet no one seems to care. And with good reason.

A little selfishness in giving is something we just have to live with because it serves the greater good.

This post was originally posted on my blog, SelfishGiving.com.