Marshall G. Zotara
Proprietary Cause Marketing Q&A | Part 1
This is the first in a series of Q&A for our refined platform, Proprietary Cause Marketing. Check back soon for future updates.
WHAT IS PROPRIETARY CAUSE MARKETING?
In order to thoroughly understand the recently-coined phrase Proprietary Cause Marketing, we first need to understand traditional cause marketing.
THEN, WHAT IS TRADITIONAL CAUSE MARKETING?
In its most simplistic form, cause marketing is defined as a “co-branded joint promotional effort of a for-profit corporation with a nonprofit organization for mutual benefit”.
HOW DO BOTH PARTIES BENEFIT?
For most traditional cause-related marketing endeavors, the benefit to the for-profit is increased sales and branding; the benefit to the nonprofit is increased donations and awareness. A percentage of sales supporting the cause is simply donated to the nonprofit’s general fund. It is “a blend of traditional marketing and philanthropic appeal” that provides consumers with a sense of altruism when they purchase the product or service connected to the promotion.
WHEN DID THIS START?
It is generally accepted that cause marketing was launched 40 years ago when American Express raised money for the preservation of the Statue of Liberty. During the summer in 1983, AmEx donated a penny for each credit card transaction by AmEx cardholders, and additional funds for each new account opened, and sales of other products. More than $1.7 million was raised to restore and preserve Lady Liberty.
INTERESTING PREMISE, WHAT ARE THE CHALLENGES?
Some of the challenges faced when a for-profit aligns with a nonprofit, include 1) the obvious cultural conflict when an earnings-focused for-profit team with a mission-based nonprofit, (2) the difficulty of a generally creative, flexible for-profit company to adapt to a rigid, inflexible nonprofit organization (especially with national NPOs), to develop a strong partnership, (3) the inability of the nonprofit to provide a substantial tangible return (benefit) to the for-profit, due to budgetary constraints and strict 501(c)3 federal guidelines prohibiting the for-profit from receiving “substantial return benefit, other than use or acknowledgment of the nonprofit’s name or logo”.
AND, IT’S STILL GROWING?
Yes, traditional cause marketing is a stunning $2.64 BILLION industry, and has almost tripled in the last 20 years, according to IEG.
NEXT: The series continues with the actual answer to, "WHAT IS PROPRIETARY CAUSE MARKETING?"