Most organizations want to generate goodwill about their business, and one of the most effective strategies for achieving a solid reputation is through cause-related programs. Also known as nonprofit marketing or corporate social investing, this hybrid of integrated marketing communication techniques enables a company to affiliate with a charitable entity and build widespread, favorable exposure for the partnership.
Both organizations gain value in these partnerships, and each entity brings distinct contributions to the table. The nonprofit gains the leverage of being associated with a well-regarded business leader. In return, the business clearly conveys its interest in genuinely and consistently serving as a good corporate citizen. The nonprofit has an opportunity to generate revenue, and the corporation may enjoy increased sales because of the tie-in.
One of the first recognized applications of the cause-related concept was the American Express campaign to raise much-needed renovation funding for the Statue of Liberty. The March of Dimes later partnered with the Florida Citrus Growers to promote use of folic-acid-rich orange juice among expecting mothers. Both the American Cancer Society and the American Heart Association have entered into lucrative agreements that actively positioned their names with key brands. McDonald’s offered Garth Brooks and Tina Turner CDs, generating product sale-linked contributions to the Ronald McDonald House and children’s charities.
Endorsement is an outgrowth of the link between two well-regarded partners. Company X is seen as sincerely engaged in the community in a substantial and profound way. Nonprofit X is seen as careful in its selection of partners who share their vision of strategic philanthropy. When executed appropriately, cause-related programs are win-win and often long-lasting endeavors.
Another benefit for nonprofits is that negotiating continuing agreements with a company helps them to avoid the annual pressure of requesting donations. The cause-related tie-in establishes a new level of commitment between the partners, so both may actively identify new ways of leveraging their resources and advancing their missions.
Communicators who are interested in exploring this arena should consider what would be a right fit strategically for their organization’s business goals, operating philosophy and community relations history. It is crucial to remember that both partners are affiliating their names with the other. Image and reputation are essentially shared during the time the two organizations are unified. Therefore, each is vulnerable and can taint what is most important to them—the way they are viewed by consumers.
Nonprofits should be alert to the possible perception that close affiliation with a company or product may be seen as “selling out,” or cheapening their good name. It is essential to establish clear boundaries on what is acceptable to each party and to determine expectations. Assumptions should be avoided; what is embodied by the agreement and what is not must be clearly delineated. While it is fair for the business to expect a first right of refusal on new event sponsorships and the nonprofit is generally given a pre-negotiated pledge, further discussion may be warranted as opportunities beyond the agreement arise.
Communicators who wish to pursue a cause-related partnership with a nonprofit organization have an obligation to conduct comprehensive applied research prior to assembling a proposal. An unfortunate truth of the nonprofit arena is that all organizations are not equal in their commitment to fiscal management.
The following steps can help you determine whether an identified cause is suitable to be associated with your company’s name:
- Secure several years of the nonprofits’ annual reports. Examine how much of their income is invested in direct programs and services, and how much supports administration.
- Ask if the report is independently validated. If it is, ask by whom it is scrutinized: a CPA, the Better Business Bureau or the United Way? (These organizations also compile rankings of well-run nonprofits. Become familiar with their assessment methods.)
- Examine the nonprofits’ web sites and promotional materials. Are programs described in a consistent way? Are results clearly identified? While nonprofits often do extraordinary work, a cause-related partnership is a business relationship. It is crucial to determine if the charity is performing effectively. A primary measure is the number of people affected by their activities.
- Consider the demographics and psychographics of both the population served and its donor base. Are there sensible connections here when the two groups link their names? Will each partner reflect favorably on the other?
- Determine what corporate relationships exist and how substantial the partnership opportunities may be for the corporation. A savvy nonprofit that has many affiliations is obviously successful, but its popularity may lessen the value of a cause-related partnership.
As a final note, when well thought-out, intentional alliances through cause-related programs provide public affiliation with equally matched partners, it is the mutual responsibility of both the business and the nonprofit to keep each other’s best interests in mind.