Cause Marketing Program Strategies

The Continued Growth in Cause Marketing 

There are no shortages of businesses that collect donations on behalf of a cause, sell a product with proceeds benefitting a charity, or some hybrid.  If that is the case, and we are experiencing "cause fatigue" ('People's BS detectors are high': Brands have given consumers cause fatigue), does it make sense for a winey to develop or revise a program?  The answer is: "Yes."

Many articles about cause marketing emphasize the need for businesses and brands to include a cause-marketing effort in their business plan.  What was estimated to be a $120 million industry in 1990 grew to over $2 billion in 2017, a 1,567% growth over this 17-year period (What Every Nonprofit and Company Should Know About Cause Marketing).  

According to the Cone 2017 CSR Study, "86% of Americans expect companies to do more than make a profit." Businesses are expected to focus on addressing social and environmental issues, with 81% of consumers indicating that a deciding factor in their brand during decision is that they "must be able to trust the brand to do what is right" (2019 Edelman Trust Barometer Special Report: In Brands We Trust?).

Cause Marketing Interest by U.S. Generation

Before we describe consumer interest and participation in cause marketing programs, here is a brief primer on U.S. generations, their ages in 2020, and the percentage of the U.S. population in each.  We base many decisions on our psychographics (attitudes and beliefs) and our behaviors (what we do in a situation); however, there seem to be some differences based on age range and/or defined generation.  

While there are slight differences in the years that mark the beginning/ending for each generation, according to the PEW Research Center (Defining generations: Where Millennials end and Generation Z begins), the age ranges that define them (adjusted for 2020) are as follows:  

• Generation Z – under age 23 (various reports state different years as to when the generation ends) 
• Millennials – aged 24 to 39 
• Generation X – aged 40 to 55 
• Boomers – aged 56 to 74 
• Silent/Greatest generations – aged 75 and older

Pertaining to the percentage of consumers in each generation.  Data published in the first quarter of 2017 provided the percentage of consumers in each generation: 

• Generation Z –26%.  
• Millennials –22% 
• Generation X –20%
• Boomers –23% 
• Silent/Greatest generations – 9%

According to the 2017 Cone Gen Z CSR Study: How to Speak Z, Gen Z consumers believe being a responsible company "is primarily about being a good employer (97%) while also making products that are good for individuals and their families (95%). This group also wants companies to help people and the environment (91%), while donating to causes in their communities (89%)."

Marketing decisions should not be made solely on consumer demographics, such as age or generation; rather, attitudes (what they think) and behaviors (what they do) should also be used to better understand a consumer's interest in a business's cause marketing program.  It is, however, interesting to note that younger consumers may have a higher level of interest in learning about and participating in a cause marketing program. 

Responses published in the 5WPR 2020 Consumer Culture Report indicate that a higher percentage of participants aged 18 to 34 years:

• feel that it is important to buy from companies that align with their values (83%) compared to consumers aged 35 to 54 (73%) and 55 years of age and older (60%) and that the brand they are purchasing from has a charitable component (67% vs 52 and 30%, respectively),
• like it "when CEOs of companies speak out on issues [they] care about" (76% vs 66 and 55%, respectively), and 
• "will pay more for a product if [they] know some of the proceeds go to charity" (71% vs 61 and 40%, respectively).

Support a Cause that is Personal 

When deciding on what cause(s) to support, select a cause that has some tie-in with the industry and/or that the cause is personal to the business.

Ata Rangi, a winery in Martinborough, New Zealand, supports an environmental cause "that deeply resonated with [them] about the need for reforestation of native trees, support of a cause that aligned with [their] values" (Pete Monk, Ata Rangi business manager, personal communication).

After purchasing their Bush Block in 2001, owners discovered "a strand of ancient rata," a native species whose existence, along with pōhutukawa, another native plant, was "threatened" (Project Crimson Trust). First through Project Crimson Trust, and now as a supporter of Trees That Count, these efforts and sales from each bottle of Crimson Pinot Noir, "a younger vines Pinot Noir" (Ata Rangi winery), have supported replanting native trees.

Additionally, Clive Paton, Ata Rangi founder, grows rata at his nursery, which has been the source for 75,000 trees that he, family, staff, friends, and volunteers have planted at the Bush Block (Pete Monk, Ata Rangi business manager, personal communication). Some trees are also available for purchase. 

Other businesses have supported causes that have personally impacted the owners and/or employees. For example, Stew Leonard's is an independent grocery store chain with outlets in Connecticut, New Jersey, and New York.  The business evolved from a small dairy store in 1969 to the "World's Largest Dairy Store" and was recognized in The Guinness Book of World Records as having "the greatest sales per unit area of any single food store in the United States." 

As a result of the accidental drowning of their 21-month-old son in 1989, Kim and Stew Leonard created the Stew Leonard III Water Safety Foundation. The Foundation "has raised more than $2 million dollars to go toward water safety awareness and education, including lifeguard training and providing 10,000 free or low-cost swimming lessons to children every year".  Such a devasting event certainly propelled this family to make sure that others do not have the same tragic experience.  There is undoubtedly a strong tie between the business and an issue that can concern many families.

Other examples that have been recognized as having a connection are:

• Uber promoting awareness of Mothers Against Drunk Driving (MADD)
• Warby Parker donating a pair of glasses for each one purchased (4 Keys to Creating Cause Marketing That Benefits Both Brands and Nonprofits)
• Florida's Natural donating 100% of profits from consumer lemonade purchases benefit Alex's Lemonade Stand Foundation

Most consumers will agree that they understand the connection between these brands and the causes they support without much explanation.

What might be some causes to consider?

When deciding what cause categories to support, it might be helpful to consider what causes or issues consumers would "like companies to address."

According to the 2017 Gen Z SCR Study: How to Speak Z: 

• 34% of consumers who were surveyed selected "economic development," which would include job creation, training, and infrastructure development, as the one issue they would like companies to address.
• When segmented by generation, only 23% of Millennials and 16% of the Gen Z participants selected this as "the one issue" they would like addressed.
• "Poverty and hunger" was selected by the greatest percentage of Gen Z participants (28%), followed by "environment" (20%), and "human rights."

Another survey, conducted by Toluna and published in the March 13, 2017, issue of AdWeekly, did not restrict participants to select just one issue/cause.  Of the causes presented, the top three consumers felt a brand should support were: hunger, homelessness or medical relief (56%), education (54%), environmental sustainability, and wildlife protection (45%).

Encourage and Remind Consumers to Share on Social Media

Additional data published in the 2017 Gen Z SCR Study: How to Speak Z described the percentage of participants who responded that it was "very important/somewhat important" to perform an online action to support social or environmental issues.

Some statements and responses included in the report:

• 77% of all survey participants felt it was "very important/somewhat important" to "share my positive opinion about a company that is doing good."
• When segmented by generation, 87% of Gen Z and 83% of Millennials felt it was "very important/somewhat important"
• 77% of all survey participants felt it was "very important/somewhat important" to "vote to pick which charity should receive a donation."
• When segmented by generation, 86% of Gen Z and 82% of Millennials felt it was "very important/somewhat important"
• 65% of all survey participants felt it was "very important/somewhat important" to "'like' or follow a charity or company's social or environmental program." 
• When segmented by generation, 79% of Gen Z and 77% of Millennials felt it was "very important/somewhat important"
• 53% of all survey participants felt it was "very important/somewhat important" to "take an online action to trigger a donation."
• When segmented by generation, 68% of Gen Z and 71% of Millennials felt it was "very important/somewhat important"

When developing a campaign, also develop appropriate hashtags for Instagram and Twitter, and create photos and videos to share on all social media sites.  Also, consider creating an Instagram photo frame, similar to what a selfie would look like if posted on Instagram, with a cutout that "frames" those who visit your tasting room.  A great photo op – and an easily sharable way to promote your cause, the name and location of your business, and any relevant information and hashtags you use. 

What should be avoided or considered when developing a cause-marketing campaign?

Transparency 

Where the Money Went

As discussed in the 2014 blog post, providing evidence as to how much money was collected, when it was distributed, and alerting customers who purchase a cause-related product, make a donation, etc., about these and other outcomes is critical.  Anything less could be mistaken as "goodwashing": misleading consumers about and/or embellishing cause marketing efforts and results (The Drum: A call to end 'good-washing' in advertising).

An example of a charity recognized as being highly transparent is Charity Water. Though they are not a winey collecting/accumulating money on behalf of a charity, they do have a protocol that a retailer could follow. Charity Water's goal is to bring "clean, safe drinking water to people in developing countries. 100% of all public donations directly fund water projects," with private donors covering their operation costs.

To date, they have funded over 51,000 water projects, with over 11 million people gaining access to clean water in 28 countries. In addition to these statistics, those who visit their website can learn more details about each completed project. A map shows locations for projects in each of the 28 countries. More information is available, including the exact GPS location of the project, the number of beneficiaries, a description of the project, any partners involved, and the date the information was published on their website.

For example, in March 2018, it was reported that 175 people living in Nathasar, India, now had access to "tankas," which are tanks used to harvest household rainwater. Before the completion of this project, the families had to travel distances to obtain water and/or pay high prices for water trucked into their community. In addition to promoting the outcomes of a cause marketing effort, there are criteria for crafting the message so that they are clear and not misleading (Engage for Good: For Goodness Sake: Legal Regulation and Best Practices in the Field of Cause Marketing).

Avoiding Vague Language

How can you persuade consumers to purchase an item tied to a dollar amount that will be donated to a cause?

Instead of deciding that a "percentage" of proceeds or profits will be donated to the cause, structure the program so that a percentage of the retail purchase price will be donated.

This will give customers a much clearer idea as to how much will actually be donated.  If they have to make a calculation or take a wild guess as to what the final amount donated is – they may underestimate or greatly overestimate how much was actually generated and donated. This could then impact their decision to donate to any future campaigns you might host.

Flat Donations 

According to Engage for Good: "The company agrees to give a fixed amount to the charity. The amount does not depend on the number of sales. Yet the advertising tells consumers that each purchase results in a donation."

While generating less than the goal is a considerable risk, so is the possibility of exceeding the goal but only donating the predetermined donation amount. For consumers, they may not be persuaded to make a purchase or purchase less because, like the example above, they are unsure how much their purchase will generate – which might convince them to make a purchase elsewhere.

Capping Donations

In this instance, the business implementing the cause marketing program donates to the cause for each action a consumer completes. This could be a 50-cent donation, up to a specified amount (e.g., $2,000), for each new Facebook "like" or Instagram "follow," or $1.00 from each purchase will be donated to the cause. There is nothing inherently wrong with this approach, as consumers will understand how much is generated based on them doing "x" and that a total of up to "y" will be donated. It is critical that the deadline for these actions is clear so as not to mislead those who "like" a Facebook Page or purchase a product after the cap is reached – and believe that they have helped reach the goal.

Make it Easy to Donate

Ask at Check-out 

Whether you ask in the tasting room or add an option to your online shopping cart, consider asking customers for donations at the time they make a purchase.

A receipt from a national pharmacy chain store showing a consumer's purchase and a $1.00 donation to the American Heart Association

From the 2019 YouGov Survey:

"Most (75%) Americans say that they typically donate some amount of money to charity every year. About one-third (32%) say they've donated during an in-store checkout at a grocery store or drug store" (YouGov: What motivates Americans to donate to charity? Their friends & in-store checkouts).

From the Catalist's 2018 Report: POS Giving: Progressing and Prospering:

• "69% of consumers have given at point of sale in the last 12 months. Of those, 81% say they like or don't mind being asked to give at the register.
• Consumers prefer rounding up almost 2 to 1 over purchasing an icon for an additional dollar amount" (Engage for Good: The POS Giving: Progressing and Prospering).

Website Donation Buttons

Another option is it add a payment company donation button, like PayPal (paypal.com) or Stripe (stripe.com), to your website.

According to research conducted by Northstar Research in October 2018 involving U.S. and Canadian consumers and published on PayPal's website: 

• "40% of donors would not have given to a nonprofit if PayPal wasn't an option.
• 75% of donors would give again if PayPal was a payment option.
• 38% of donors prefer PayPal as their recurring payment method.
• 79% of donors feel confident using PayPal to send payments on unfamiliar websites."

The costs for a for-profit business to collect donations for a cause are 2.9% per transaction plus $0.30. Thus, PayPal will charge the business:

• $0.59 when they process a $10.00 donation,
• $1.75 for a $50.00 donation,
• $3.20 for a $100.00 donation, etc.

Getting Employees and Customers Involved

"Supporting charitable efforts can increase employee retention, build skills, and even improve physical and mental health" (The JAR Group). That quote alone might encourage companies to develop a cause marketing program, but here are some benefits employees involved in volunteer activities believe they:

• 87% "develop professional skills,"
• 86% "learn better time management,"
• 92% "develop their people skills/teamwork," and
• 77% "strengthen relationship" (United Healthcare: Doing Good is Good for You Study).

What else might a company do to engage employees?

• Companies such as Google match employee "donations to nonprofit organizations" and money they "raise for charitable events that they actively participate in." The company "matches between $50 and $12,000 in donations per employee each year" (Double the Donations: 51 Popular Companies That Donate to Nonprofits).
• Disney is one example of a company that provides grants to the "eligible nonprofit of [the employee's] choice" based on the number of volunteer hours. If the employee volunteers between 10 and 24 hours, a $100 grant is awarded to the cause, and 75 or more volunteer hours will generate a $1,000 grant (Double the Donations: 51 Popular Companies That Donate to Nonprofits).
• Employees can be "brand ambassadors" and help inform the community and customers about the company-sponsored cause by posting content on social media or having more of a deciding role in the cause that is selected and/or how the business will support the cause. (FrontStream: Using cause marketing to improve employee engagement).

These strategies can also involve customers and ask them to select the cause, or causes, that will benefit from fundraising or donation campaigns. Or matching customer donations (World Vision: 8 Effective Cause Marketing Methods to Grow Your Business).

Have a Campaign Deadline and Offer Incentives 

Many times, consumers intend to donate to a cause, but if there is no time-sensitive call to action, they may get distracted by another cause or forget to donate altogether.  A sense of urgency can encourage people to donate or make a purchase – sooner rather than later or not at all.

According to Indiegogo, which provides a platform for both for-profit and nonprofit campaigns, a campaign should be no more than 40 days, as longer durations could make it challenging to maintain interest and engagement (Indiegogo: Choose Launch Date & Deadline). Additionally, offering "perks" or incentives to donate could have a significant impact on giving. Indiegogo reports that "campaigns offering perks rise 143% more money than those that do not" (Indiegogo: Perks: How to Use Perks to Raise Funds).

A suggested strategy is to "offer at least three perks (especially in the $25 and $100 levels)" (Washington Post: How to Raise Funds Through Social Media Channels) with perk examples including photos and updates of communities or families that have benefited from the campaign ($25 donation perk) to t-shirts, bags, and similar items ($100 to $150 level).

How Businesses and Brands have Benefited from Cause Marketing

One program that may resonate with many readers is the Yoplait "Save Lids to Save Lives" campaign that ran from 1998 to 2016 (Forbes: Four Cause Marketing Classics Passed Last Year -- And A New Era Began). The program required consumers to purchase Yoplait yogurt and send lids to General Mills, which would then donate 10 cents for each lid (and later, code submitted online)  to the Susan G. Komen's Race for the Cure. During the 18 years that the program operated, over $50 million was donated to this cause based on the number of lids and codes submitted.

With General Mills donating such an amount, and with the campaign running for nearly two decades, might the company have "profited" from the cause marketing (CM) effort? To answer the question, researchers analyzed 1.5 million yogurt purchase incidences made across 7,257 households from January 2001 to December 2011. While the researchers acknowledged that they were unable to obtain the costs for implementing the campaign, "profits during the CM campaign increase[d] by 2.70% (measured by dividing the CM coefficient of the Yoplait model by Yoplait's mean customer profitability)" (Ballings et al., 2018). Additionally, the researchers also found that Yoplait's CM initiative negatively influenced Dannon's (a major competitor) "customer profitability, where profits during the CM campaign decrease[d] by 13.31%." 

Another potential outcome of a successful brand's cause marketing program is improving a company's "public image."  An extreme example is a change in perception about Wal-Mart that occurred in the early 2000s. At the beginning of the decade, the company was dealing with "controversies over its labor practices environmental impact, class-action lawsuits, and other business behaviors and scandals" (HuffPost: How Hurricane Katrina Changed Corporate Social Responsibility Forever) to one that was heralded by The Washington Post "as a model for logistical efficiency and nimble disaster planning" (Washington Post: Wal-Mart at Forefront of Hurricane Relief).

After Hurricane Katrina impacted the Gulf Coast, Wal-Mart responded by providing a "$15 million donation and an announcement that employees forced to flee their homes because of the hurricane would be hired at their new locations." The company was able to "deliver relief supplies to victims where the government could not" (HuffPost: How Hurricane Katrina Changed Corporate Social Responsibility Forever). Hence, Wal-Mart received "the kind of advertising no marketer can buy" (AdAge: Katrina Brings out Wal-mart?s Inner Good Guy).

But, unless the effort is truly integrated into a business's practices and company culture, consumers will likely sense that it is inauthentic and quite possibly ignore it or criticize it on social media.

Legal Considerations

Last but not least, there are legal considerations to working with a charity and promoting a cause. While the intent to support a cause is merely to do some good in the world, there are some legal considerations to be aware of, according to the National Law Review:

"If a person or for-profit company joins forces with a charitable organization to benefit the charitable organization, usually via donations, the parties have entered into a commercial co-venture arrangement… All 50 states have [CCV] laws… some more complex than others" (Is Your Commercial Co-Venture in Compliance in all 50 States?).

Some items to consider regarding Commercial Co-Venture laws:

• For-profit companies/charities develop and sign a contract as to the goods/services offered, how donations will be generated and provided to the charity, the duration of the campaign, if the charity's logo and name will be used in the campaign, etc.
• Avoid vague language and "review advertising carefully for transparent disclosure of the per-unit donation amount." (For Goodness Sake: Legal Regulation and Best Practices in the Field of Cause Marketing)
• Some states require that the program be registered and bonded.
• Check that the charity is "registered for general fundraising purposes" in the states where the campaign will be held.
• Charities that "actively promote the sale of a commercial sponsor's goods or services – even if such sales help generate donations" could lose their tax-exempt status and be subject to unrelated business income tax (UBIT). (For Goodness Sake: Legal Regulation and Best Practices in the Field of Cause Marketing)
• Avoid "self-dealing," which "occurs when a private foundation's assets are improperly used to benefit "disqualified persons," who include substantial contributors and their officers and directors, as well as officers and directors of the foundation." (For Goodness Sake: Legal Regulation and Best Practices in the Field of Cause Marketing)
• Follow the Better Business Bureau (BBB) Wise Giving Alliance standards.

More about these and other legal issues are explained in sources such as:

• For Goodness Sake: Legal Regulation and Best Practices in the Field of Cause Marketing (Engage for Good)
• 10 Legal Requirements Cause Marketers Need to Know (Engage for Good)

Reference

Ballings, M., McCullough, H., & Bharadwaj, N. (2018). Cause marketing and customer profitability. Journal of the Academy of Marketing Science, 46(2), 234-251.