It’s not a viable option for every organization, but cause-related marketing (CRM) is definitely a serious component for the fundraising mix of many not-for-profits and charities. In addition, CRM has survived for twelve years and has matured beyond the point of being simply a marketing fad.
The first example of Cause-Related Marketing is traced to 1983 and the Statue of Liberty restoration project. At the time, traditional fundraisers dismissed this American Express corporate relationship as a passing fad that should not really be considered part of a fundraising program. Over the past twelve years, however, we have come to accept the role of CRM and its comfortable fit for many organizations. According to Robert L. Thompson and Lilya Wagner, in order to understand CRM we must accept several premises:
- Money will come from corporate marketing budgets, not from contributions budgets.
- Unlike sponsorships, only a portion of the proceeds will go to the charity.
- In reality, the charity is endorsing the product in exchange for a percentage or fixed portion of the sales price. The charity receives funding, and the corporation receives additional credibility.
Cause-related marketing is generally applicable only for larger organizations with either high visibility, or an easily understood and marketable mission. Some examples would be:
- American Express/Statue of Liberty Restoration
- Arthritis Foundation/A pain reliever
- University/Affinity Cards
Most corporate executives realize that CRM is not a substitute for philanthropy. They perceive it as a relationship tied directly to sales: the greater the sale, the greater the proceeds realized by the charities.
To date, there have been no studies to determine whether long term donor relationships have been developed through cause-related marketing initiatives. What is known is that, when properly implemented, with the right fit, CRM can create new revenues for an organization.
When considering the possibility of entering into a CRM relationship, an organization should consider the following guidelines:
- Have an organizational policy in place before you sit down with a corporation.
- Consider the corporation’s, and your institution’s, images.
- Select your partnerships carefully.
- Tell the company how it will benefit.
- Develop a contract.
- Apply ethical behaviour standards.
- Get a set amount per item sold, not a portion of the proceeds.
- Get a minimum guarantee.
- An organization should never be obligated to promote the product.
- Always maintain good two-way communications with your CRM partners.
