Turning Good Deeds Into Good Business
Faced with dwindling corporate donations, charities are creating promotion
programs that deliver positive PR and increased sales.
by MichaeI J. Major
Brother, can you spare a dime? The hit tune of the Great Depression
is falling on deaf ears during this not-so-great
recession as consumers
tighten their purse strings and marketers trim their budgets. As a result,
whose existence depends on corporate altruism, are feeling
the effects of a weak economy and corporate downsizing
like never before.
To compete for dwindling donations, many organizations have become promotion
to keep corporate dollars flowing in.
Cause-related marketing has been around for a long time, but it is only
within the last few years that the focus has moved beyond just creating
a positive corporate image. Nowadays, with a
faltering economy and corporations
saddled with debt, marketers are looking for bottom line returns for every
they spend - and many charities are happy to oblige with promotion
programs that bring in donations and bring up sales.
Companies today are
viewing cause tie-ins not so much as extracurricular activities but as
integral components in their
overall business strategies. "
A few years
ago charitable donations were pretty much primarily by altruism,"
says Frank Bulgarella, president of Resource One, Inc., a Birmingham, AL,
cause marketing agency. "Corporations
have become more results-oriented
and have developed evaluation systems to determine if giving to a charity
their public relations and sales promotion objectives."
Savvy charities are adapting to this new reality.
Gerald C. Weinberg, director
of field organization for the Muscular Dystrophy Association, Tucson, AZ,
ago we used to rely on outright contributions. Now our
attitude in working with corporations is 'what can we do to help you
us.'" Rhonda J. Harper, contributions motivated senior associate, corporate
development & planning for the
American Red Cross, Washington, DC,
says, "Once upon a time we'd evolve a big promotion, throw it against
and see what would stick. Now we're more targeted and customized."
A recent development on the cause front is the inclusion of the retailer
as a vital partner in the endeavor. "
We are witnessing the convergence
of two major trends," says Dave Moran, vice president, Marketing Corporation
America, Westport, CT, "the first is cause marketing, and the second
is in-store marketing."
The increasing focus on in-store marketing reflects the overall movement
away from the untargeted mass media toward
local and specific activities.
In years past, charities and their corporate sponsors tended to bypass
activities such as coupon mailings or FSIs.
parties see how indispensable the retailer can be as the focal point
localized energy, and so are making sure his needs are met as well - to
enhance his image, increase Store traffic and
move products. "To achieve
success on the local level, we give the trade what it's looking for,"
says Jack Paupa,
group promotion manager, SmithKline Beecham Consumer Brands,
Pittsburgh, PA. "The retailer's name is associated with
and we make the donations in the retailer's name.
The connections between the triangle of charity,
corporation and retailer
are becoming more thematically related. "The key concept now is linkage,"
says Harry Abel,
VP of corporate relations for the Arthritis Foundation,
Atlanta, GA. "We work to match our promotions with what the other
partners are looking for so that everybody wins."
In some instances the matches are obvious. Example: the drug manufacturer
Upjohn is a natural sponsor of the Arthritis
Foundation; but in other instances
the connections are less apparent, at least in the beginning. At first
and Tide detergent may not seem to have much in common.
But when Tide came out with a snap-top opening, making it easier for
sufferers to open the package, the Arthritis Foundation gave Tide its endorsement.
Procter & Gamble flagged
the AF endorsement on its packages and ran
an FST promotion in which an Arthritis Foundation membership offer was
Tide purchases, resulting in the distribution of millions of packages
of Tide. "Procter & Gamble was so pleased it
talked about the
promotion in its annual report," Abel says. "This event,
in turn, developed into our ongoing
cause-related relationship with Procter
& Gamble." Abel adds that since the Foundation has 400,000 members
and since 37 million Americans are afflicted with arthritis, the fit between
the charity and the corporation is a natural
and productive one.
The Foundation also offers several advertising opportunities, such as ads
in its own magazine, Arthritis Today,
which reaches more than one million
readers, an ad insert in Readers Digest seen by more than 24 million age
shoppers, and its national Telethon exposure in 100 TV markets.
The Foundation has been able to tie retailers into
its special events --
its Mini Grand Prix in 25 markets, All-Star Salute to Secretaries in 80
markets, and Jingle
Bells Run in 110 markets. The organization has also
been able to secure off-shelf merchandising and other support
in more than
120 retail chains comprising about 20,000 stores.
William H. Lembeck, president of Westport, CT's Ryan Cause Marketing, which
works with the Arthritis Foundation,
says, "A lot of people have gotten
into cause marketing. but very few have staying power. Those who make it
are those who can deliver retailer support." What gives major national
charities access to retailers is their
people power. The Arthritis Foundation
utilizes its executives and 400,000 volunteers in 71 chapters to do the
legwork to solicit stores on a local, grass roots basis.
Drunk Driving (MADD) draws on its three million members to deliver retail
support for its
Red Ribbon America promotion. The three-day November event
puts 25,000 trained local community MADD volunteers
and supplemental part-timers
into retail stores where they distribute millions of red ribbons and coupon
containing offers for major brands. This year the promotion will
take place during the first three weekends in
November in 15,000 supermarkets,
4,000 chain drugs, and 6,000 mass merchandisers -- 25,000 stores with a
circulation of 50 million, at a projected ACV of 60 percent. The event
was designed and is being implemented by MCA.
The retail connection is
generally seen as an addition to, not a replacement for, other promotion
NYC-based American Lung Association continues to offer an FSI
program tied to its Christmas Seals campaign,
which reaches 45 million
households. But the new dimension, says director of corporate development,
Mark Hopkins, "
is mobilizing good grass roots support at the retail
Representatives from both the national
and the 260 regional ALA associations
contact stores both at the headquarters and local store levels. "We've
had great success in getting our sponsors additional aisle or shelf displays,
as well as putting our volunteers
in the stores to pass out coupons and
ask for direct donations," Hopkins says. "Our sponsors consistently
report sales increases as high as 20 percent."
The American Lung Association also represents another
growing trend, according
to Hopkins. "For the first time we are acting as our own promotion
devising the creative concept and putting together the partners."
He says the organization is currently
soliciting corporate sponsors for
a multi-brand holiday baking promotion.
Ryan's Lembeck reports that another
major multi-sponsor event will come in September in conjunction with the
American Heart Association. Called the
Food Festival, the project is designed
to heighten awareness of the need to lower dietary salt and fat content.
The promotion will feature in-store Pledge Centers at which shoppers can
pick up information on heart-healthy meals
including a list of products
that receive the Association's seal of approval. Sponsors can get exposure
15,000 supermarkets through a specially created 48-page magazine customized
with the retailer's name and containing
manufacturers' promotion offers.
"We're leveraging the Heart Association's affiliates to call on the
and solicit their support," says Lembeck.
Salt Lake City, UT-based Children's Miracle Network relies on
roots activities of its 160 local children's hospitals to establish its
presence in 460 retail food,
drug and mass merchandiser chains, comprising
more than 33,000 outlets. Jay Vestal, senior VP of marketing of CMN, says.
"All of our sponsors reported that this was their Number One sales
event of the year as measured by volume movement,
share increases and retailer
One corporate sponsor, Hugh Cavanaugh. VP/promotion manager of Clorox Company.
Oakland, CA, says, "Children's
Miracle Network involves the consumer
in something he or she judges to be beneficial to his or her community.
gets the retailer involved, and since many of our products are
seeking to reach households with kids, the program meets
Vestal adds that the Network is continually adding sponsors, and
new product categories.
Including Ace Hardware, FTD Florists and Mattel.
Even the National Hockey League has designated
Children's Miracle Network
as its official charity.
Just as corporations have narrowed their charities to the one or few that
image requirements, the same is true of retail outlets. Karen
Sheriden, director of corporate communications, PayLess
Drug Stores, Wilsonville,
OR, says the chain receives a "tremendous number of requests for participation,
have to decide very carefully."
She explains that the four major areas to which PayLess gives priority
are those having to do with young children; senior citizens; education;
and health. "We also look at what will
benefit the largest number
of people," she says.
PayLess has raised nearly $1.7 million for United
Cerebral Palsy through its in-store canisters and golf tournament,
about $500,000 through its employee bowling teams.
The retail connection is a big one and older charities
that once depended
on conventional fundraising techniques are quickly adapting. "In the
past our focus was to
narrow our sponsor marketing efforts," says
the American Red Cross's Harper. The Red Cross is now actively searching
out new sponsors and exploring new programs. With a nationwide network
of 2,700 chapters, 27,000 paid staff and one
million volunteers, the organization
can offer plenty of grass roots clout. "We are strengthening our reach
local involvement, enhancing retail trade relations, developing
cross organizational promotion ties, and designing
Although the Red Cross is offering a few specific promotions,
Harper says, is to custom tailor long-term relationship opportunities.
"Just taking a promotion
and slapping it onto a charity without giving
it the depth of thought needed is not going to be successful," agrees
Children's Miracle Network's Vestal. "We're trying to build long-lasting
relationships," he says. For example,
CMN's yellow balloon logo is now
being placed on packages of Hershey's chocolates to create a year-round
Which side gains most from this kind of exposure? "Both," says
the American Lung
Association's Hopkins. "The corporation gains a
recognition and access it didn't have before, and the charity
gets an exposure
it could never buy, in addition to the donations."
The other side of the coin is that a
cause-related program is not a panacea
and not every idea that looks good on paper will necessarily deliver. Clorox's
Cavanaugh says that many cause-related programs that were not tightly structured
have since "fallen by the
Ryan's Lembeck adds that some causes look attractive on the surface but
many don't have
the local market presence, or, if they do, are not able
to get their people to actually do what needs to be done.
that the same failure can occur on the corporate side, too. A program greeted
with enthusiasm at headquarters
does not necessarily translate into the
regional or local support necessary for proper implementation, he says.
For-profit and nonprofit organizations have different orientations and
sets of needs which both sides have to be
aware of. "They have to
respect each other's schedules and fully deliver their promises in a timely
This is easier to do on paper than in practice. The logistics-structure
must be firmly in place so that the agreed
upon program is carried out
to every detail."
Another pitfall is having grandiose expectations.
Scott Allison, cause
marketing director of The Gable Agency, San Diego, CA, says, "Many
charities look at
sponsorships as sources of venture capital, and are pricing
themselves out of the market." A corporation's "
charity may become incorporated into the company's strategic planning,
but it should not be its
strategic plan, says Allison.
For cause marketing
to really work, a program has to be able to deliver realistic objectives
within realistic limits.
The sponsorship costs of the various charities
mentioned in this article range from $10,000 to $1.5 million.
While it's true that the trend is toward turning good deeds into good business,
the fact is that helping others remains
a transcendent value which even
corporate executives can believe in. And doing good still has good PR value
of the number of coupons redeemed.