Consumerism, the purchase of good and services, seems to be a selfish pursuit. Shoppers fill their carts and return home laden with goods. Yet, innovative social thinkers are trying to change that through nonprofit-corporate collaboration. According to The Center for Media and Democracy’s PR Watch, cause-related marketing has been a popular choice for nonprofits since its inception in the 1980s. It promises consumers an easy way to support charities, offers business tax deductions, and allows charities to tap into the public’s overwhelming appetite for shopping. Cause-related marketing allows nonprofits to take advantage of the fact of consumerism and; ostensibly, put it to good work.
These campaigns most commonly contain the caveat, “a portion of the proceeds go towards,” which alerts consumers that their some of their money is being used to support the given charity. While ten percent is a common benchmark, some companies donate far more or, unfortunately, far less. In addition, some products come with, what Angela M. Eikenberry calls a “charitable surcharge,” in The Stanford Social Innovation Review. This markup allows businesses to maintain their profit margins but often dissuades consumers from spending the extra dollar in the name of charity. Corporations can also choose to cap the amount they will give which makes it difficult for consumers to determine whether their purchase is really contributing to the cause. For these reasons, cause related marketing sounds too good to be true—can consumption based philanthropy really promote social good?
Although cause-related marketing brings attention to important issues, it risks trivializing problems and posing consumerism as a solution.
Although cause-related marketing brings attention to important issues, it risks trivializing problems and posing consumerism as a solution. Unwary consumers can easily be mislead into buying; thinking that their purchase is a charitable act. Watchdog groups, such as Breast Cancer Action Project’s “Think Before You Pink” campaign, aims to warn consumers about promotional products that are misaligned with the goal of eradicating breast cancer. For example, they denounce a short-lived partnership between Kentucky Fried Chicken and the Susan G. Komen Foundation. They argue that the 2010 “Buckets for a Cure” promotes an unhealthy product—which has been linked to breast cancer, targets underserved communities—which tend to have more fast food restaurants, and benefits KFC more than the Komen foundation—only fifty cents of each twenty dollar bucket went to charity. Although the Komen Foundation defended their partnership, the fact remains that Buckets for a Cure has become the stuff of cautionary tales.
Yet, when executed diligently, cause-related marketing campaigns can have a positive impact. According to The Stanford Social Innovation Review, RED products and the company’s corporate partners have contributed more than $59 million to the Global Fund to combat HIV/AIDS. One of their most popular products, iPod RED, retails for just under two hundred dollars and results in a ten dollar donation. While this ratio of cost to donation may not seem impressive, after considering the volume of iPods sold, this statistic takes on more meaning. RED succeeds because it includes multiple products, retails in major chains -- like Gap Inc., Apple Inc., Dell Inc., and Starbucks Corp—and has ample celebrity endorsement.
These factors both serve to increase awareness of the issue and to bring the cause into mainstream culture. When celebrities, such as U2’s lead singer Bono, endorse a cause, there are bound to be followers. It cannot be determined whether people buy the product because they want to emulate celebrities or because they believe in the Global Fund. While this puts RED and its product at risk of becoming a passing fad, it nonetheless brings positive attention to the charity and its cause—no matter how transient. Though iPods may have little to do with HIV/AIDS, it is hard to make a case against the millions of dollars these product sales contribute to the cause.
Clearly, cause-related marketing is not the only way for a nonprofit spread its mission and raise money to support its mission. For example, many job training programs run small businesses staffed by their clients. In Los Angeles, Homeboy Industries rehabilitates gang members and prepares them to work in various jobs. The organization operates a few enterprises, such as Homeboy Diner, Homeboy Bakery and Homegirl Café. These businesses benefit both the charity’s bottom-line and the clients they serve. Unlike cause related marketing, this alternative form of fundraising allows the nonprofit to stay mostly autonomous. Although Homeboy Bakery still relies on consumerism, it does not distance the consumer from the cause; customers interact with the people their purchase helps to support.
Neither cause-related marketing campaigns nor charity-run businesses are without their drawbacks. There is no neat solution to the question of how to best raise funds. Both represent innovative ideas that seek to utilize the existing consumerist culture to support charitable causes. Promotional product purchases should not and cannot replace philanthropy or charitable engagement; yet, they can make consumers aware of key issues and inspire them to take action beyond their shopping cart.