Cause Marketing Is Not Philanthropy

The month of October fills the marketplace with pink-ribboned products and breast-cancer-awareness-themed events and fundraisers. Many people ask, “Where does the money go?” No one seems to know, including me. There are simply too many companies, organizations, and promotions to track, and very few of them are transparent enough to evaluate. In the midst of it all, cause marketing is cast as everything from the saving grace, the necessarily evil, to the pinkwashing pilferer. There is probably some truth in each characterization. Like everything, there is a context.

In the mid-1980s to early 1990s, corporations wanted to answer the beckoning call for corporate social responsibility. Corporate giving, which represents only 5 percent of all charitable giving, grew from under $1 billion in 1975 to $14.5 billion in 2009. The bulk of the funds go to educational institutions, “united” charitable funds, organizations for youth, health projects and institutions, and museums. As corporate giving developed, more businesses started focusing on specific social issues, either through strategic corporate philanthropy or cause marketing. There is an important distinction between the two.

In strategic corporate philanthropy corporations donate profits or resources to nonprofits that represent a particular social issue. A cause that connects with a company’s business goals, competitive context, and specialized expertise has, according to an article in Harvard Business Review, the best chance of increasing the company’s competitive advantage while also having a social impact. A technology firm with expertise to contribute to a community’s goal of accessing new technology and developing technological proficiency might donate its products and train people to use them. The company creates intellectual capital while expanding the market for its technology, and the community benefits.

Cause marketing

is not the same thing. Housed in the marketing divisions of corporations, cause marketing is, quite literally, marketing. There are three primary objectives: (1) build a reputation as a good corporate citizen, (2) deepen employee loyalty through employee matching and cause related volunteerism, and (3) increase sales. For each of these publicity is paramount, so corporations are choosy about which causes to put their names and dollars behind. A nonprofit with a sustainable infrastructure and outreach potential is appealing to cause marketers. If the social cause is easy to measure, employee friendly, and has a clear and simple message, then all the better. The greater the emotional attachment to the cause, the more a company can sell it and build its own brand. Cause marketing transformed corporate philanthropy into a highly profitable business activity.

Cause marketing

Breast Cancer as the “Darling of Corporate America”

From 1993 to 2004, Cone Communications, a marketing firm, found that about 85 percent of consumers were likely to switch to a new brand of similar price and quality if the new brand were associated with a cause (Cone Corporate Citizenship Study). The pink ribbon came on the scene in 1992 as the symbol for breast cancer awareness. Breast cancer activists had already done the hard work of de-stigmatizing breast cancer, increasing support programs, funding research, and moving breast cancer into the public limelight. The breast cancer movement had made a real impact on raising awareness of the disease and institutionalizing support. Once breast cancer was out in the open as a good and moral cause, companies lined up to capitalize on the pink ribbon’s public appeal. Associating with the mother of all causes, corporations could buoy their public images and their bottom lines.

Cause marketing donations are estimated to reach $1.78 billion in 2013, for a range of causes. This amount pales in comparison to the profits companies bring in from their pink ribbon campaigns. While it is impossible to track exactly how much companies profit, the examples that follow show a clear trend.

Yoplait Yogurt of General Mills

is the number 1 yogurt in America, as popular as Cheerios, Betty Crocker, and Pillsbury, and accounting for $1.1 billion of GM’s $11.2 billion in sales. In 1998, Yoplait teamed up with Susan G. Komen for the Cure (Komen) to create the “Save Lids to Save Lives” campaign. Every October, the company sells yogurt – now without the growth hormone rBGH, thanks to Breast Cancer Action – topped with pink lids. Consumers send the lids to a collection center or log their “redemption codes” through the Yoplait website during a specific time period. Yoplait then donates 10 cents per lid, with a guaranteed minimum donation of $500,000 and cap of $1.5 million. In 2008, Yoplait consumers redeemed over 15 million pink lids, hitting the cap. The 15 million yogurts less the 10-cents-per-lid donation, yields about $5.9 million in sales. That fiscal year, GM reported a 14 percent sales jump for the Yoplait division.

Yoplait Yogurt of General Mills

In 2006, Ford Motor Company launched the Warriors in Pink campaign. The company, in 2008, offered a Ford Mustang with Warriors in Pink package on its Mustang coupe, convertible, and glass roof coupe. The package included a pink ribbon and pony fender badge, pink ribbon rocker tape and hood striping, charcoal leather trimmed seats with pink stitching, and charcoal floor mats with pink ribbon and contrast stitching. The limited-edition 2008 Mustang with Warriors in Pink package donated $250 per sale to Susan G. Komen for the Cure, totaling over $500,000. Limited to 2500 units Ford had to sell 2000 cars to make the donation. About.com priced the special edition from $28,899 to $34,584. The package added $1,795 and automatic transmission was required, adding another $1,250. Since Ford’s sales had been down 32 percent in 2008, expanding the consumer base with special edition pink package vehicles could help offset the decline. By December of 2009 Ford Mustang sales were up 62 percent.

American Airlines

expanded its corporate partnership with Komen also in 2008. The airline faced near bankruptcy, with high fuel prices, low consumer demand, debt, and an aging fleet. Still, the airline entered into a Promise Grant with Komen earmarked for the Morgan Welch Inflammatory Breast Cancer Research Program and Clinic. The partnership would generate $8 million in 8 years through the airline’s “Miles for the Cure” program, gift cards, annual celebrity golf and tennis event, and other promotions.

American Airlines

American Airlines would more than cover the $1 million per year allocation. By July of 2010 American’s performance was already a “$440 million improvement over the first quarter, and the first operating profit since the third quarter of 2007.”

The National Football League (NFL) has supported Breast Cancer Awareness Month since 2009 with the “A Crucial Catch” campaign – a nationwide screening reminder to “help women stay healthy.” Done in collaboration with the America Cancer Society, the initiative encourages women 40 and older to get annual mammograms. (Note: There is no mention of the well-documented limitations of one-size-fits-all screening.) In addition, the NFL sells pink merchandise to raise money for the American Cancer Society. Business Insider recently reported that for every $100 in pink merchandise sold $12.50 goes to the NFL, of which $11.25 is donated to the American Cancer Society. The remaining amount is divided between the company that makes the merchandise (37.5 percent) and the company that sells it (50 percent). The manufacturer/seller is often the NFL itself or the individual teams.

Cause Marketing Is, Still, Marketing

The pink ribbon has become a safe bet for corporate investment and, for some, a reliable revenue or profit stream. Non-profits get some money and free advertising, and companies get to use a social cause to create an image of caring and social responsibility. But is it really benefiting the cause? Ironically, consumers who buy cause marketing products end up giving less money to a social cause or charity, according to a study in the Journal of Consumer Psychology. Furthermore, as Porter and Kramer argue in the Harvard Business Review, “as long as companies remain focused on the public relations benefit of their contributions instead of impact achieved, they will sacrifice opportunities to create social value. (p. 15).” Social value goes beyond perceived good will and dollars donated.

Breast cancer may still be the darling of corporate America, but cause marketing agents should be aware. While consumers seem to like supporting causes with their purchases, Cone Communications also found that they are willing to boycott companies that behave irresponsibly. Exploiting a disease for profit may be one of the most irresponsible behaviors of all.

Dr. Gayle Sulik is the author of Pink Ribbon Blues: How Breast Cancer Culture Undermines Women's Health. More information is available on the book's website.

© 2013 Gayle Sulik, PhD ♦ Pink Ribbon Blues on Psychology Today