Questions and Answers: Cause-Related Marketing

Q. What is cause-related marketing?
A. Cause-related marketing (CRM) is a partnership between a for-profit and a nonprofit where each has something to offer the other, and both realize a benefit. When these two entities enter into an agreement for a common cause, the result can be added revenue, increased media exposure, public relations, or all three—for both partners.

Q. How does cause-related marketing work?
A. Either party – the for-profit or the nonprofit organization – contacts the prospective “partner” to inquire about teaming up.

Since both entities have their own supporters, culture, and individual brand, each organization brings value and meaning to the deal. Each partner should articulate expectations and objectives, and determine individual partner “responsibilities” for the planning and promotion of the campaign.

Q. Why does cause marketing work?
A. Surveys show us that an overwhelming majority of Americans (72%) believe that businesses should be involved with cause-related marketing. In fact, more than half said they would support a business because of their involvement in cause-related marketing.

Aside from consumer support, CRM taps into the media from two ends of the spectrum: from the business aspect, and of course, from a charitable perspective. And since a crucial barometer of media coverage is one of “population affected”, an event or campaign that boasts greater participation through corporate partners is more likely to receive publicity.

Q. Who is responsible for “driving” the relationship?
A. Since both parties derive benefits from the relationship, ideally, there should be a solid commitment on both parts to make the most of the endeavor. For real success, there must be an agreed division of responsibilities for event planning, marketing, media relations, and the like. The nonprofit usually bears greater responsibility for action since the for-profit entity may donate a form of capital or services in-kind.

Q. How is CRM different from philanthropy?
A. CRM is generally considered to be distinct from corporate philanthropy because the corporate dollars involved in CRM are not outright gifts to a nonprofit organization, hence not tax-deductible.

Q. Is cause-related marketing simply corporate charity?
A. No. When a for-profit entity enters into an agreement with a non-profit for CRM, it’s for mutual success. Both parties recognize the upside of working together and drawing real benefits from the relationship. The initiative will likely fail it it’s considered by either entity to be a “charity”. CRM is a business partnership.