Cause-related marketing (CRM) has gained immensely in popularity over the last few years. The concept caught the imagination of corporate houses and nonprofit organizations in the 1980s when a nonprofit called “Restoration Fund” joined hands with American Express to raise funds. American Express gave away a tiny portion of every credit card purchase to the fund, and effectively marketed its endeavor. The end result was that Restoration Fund received over $1.7m in funds, and the purchases with American Express credit cards grew by 27%.
Win-Win Situation
Cause-related marketing creates a win-win situation for everyone involved in
the campaign. The business entity stands to gain by the immense publicity, enhanced
brand image and positioning, and a direct boost to sales that it achieves due
to public motivation for the cause. The business consolidates its corporate
image as a socially responsible organization. The nonprofit organization also
stands to gain in equal proportion because it gets a portion of the sales achieved
by the business entity. That may add up to a very substantial amount for the
nonprofit.
Unconditional use of Funds
An advantage from the point of view of the nonprofit organization is that the
contributions received through a cause-related marketing campaign are generally
unrestricted and unconditional. In other words, the nonprofit is free to use
the funds to support even its overhead expenses.
Building of Brand Value
When the nonprofit associates itself with a worthy cause in collaboration with
a business organization of repute, it helps to enhance the image of the non-profit
too. It builds confidence and trust of the potential donors in the nonprofit.
The association with a reputed corporate house acts like an endorsement of the
nonprofit organization and the cause it supports.
Free Advertising
In a cause-related marketing project, generally the corporate house will earmark
dedicated funds for a large-scale marketing campaign to leverage value for the
business. Since the nonprofit is partnering with the business house for the
project, the name, logo and mission of the nonprofit automatically get included
in every part of the advertising campaign. That can generate immense publicity
for the nonprofit and the causes it supports.
Media Coverage
Such innovative campaigns such as cause-related marketing catch the attention
of the media channels as well. Whether it is the print medium, electronic medium,
or the Internet, such campaigns receive positive coverage from all quarters.
This adds more legitimacy to the nonprofit and its cause, because usually people
trust the media reports more instinctively, as compared to paid advertising.
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