Cause Marketing Is Not Philanthropy
Who profits from the pink ribbon?
Posted Oct 27, 2013
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.
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.
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.”
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