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Shopping for charity -- also known as cause-related marketing -- has
become an increasingly important way for some philanthropies to
raise funds. In most cases, some or all of the money a consumer pays
for designated products or services is donated to a charitable
organization. The practice also become a way for big retailers to
suggest they're good corporate citizens, committed to social causes.
But some experts worry that the trend is sending the wrong
message to people about charitable giving.
"There's no question but that it's an alternative revenue source
for some nonprofits," said Dwight Burlingame, associate executive
director of the Center on Philanthropy at Indiana University. And if
the campaign has an educational component, it also "can increase the
public's understanding of the nonprofit's mission," he said.
"The big negative is the idea that potential donors think that by
buying a bottle of water or participating in a particular race ...
that they've done their philanthropy, when only a portion -- and
often a small portion -- of their contribution is going to a cause,"
he said.
"The danger for the nonprofit is that potential donors feel
they've 'given' and don't have to sit down and make a real gift," he
added.
Still, because corporations find that sponsoring social causes
can help their image, they have been eager to participate,
Burlingame said. He estimated that about $7 billion a year -- or
half of the money contributed by corporations to philanthropic
causes in the United States -- comes via cause-related marketing.
Charities that get the proceeds say the funding can become a
significant portion of their budgets.
Susan G. Komen for the Cure, the breast cancer charity known for
its ubiquitous pink ribbon logo and "race for the cure" marathons,
raises 10 percent to 12 percent of its revenues from corporate
partnerships, according to Katrina Drake, director of cause
marketing for the Dallas-based nonprofit.
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 Last year, $36 million of the group's $267 million in revenue
came from the 130 partners. Some, like the manufacturer of SunChips,
donate 25 cents for each proof of purchase tag from specially
marked chip bags; others, like Pier1, donate 25 percent of the
purchase price of its special candle to Komen.
"It not only generates revenue that can be invested in our
mission, it's also a platform to reach people we might not reach
through traditional messages," Drake said.
Trent Stamp, president of Charity Navigator, a nonprofit based in
Mahwah, N.J., that evaluates some 5,200 charities, said companies
use cause-related marketing to differentiate their products from
competitors.
"There's a certain amount of, 'Let's align our for-profit product
with a nonprofit so people feel good about what we're selling,'"
Stamp said.
This means, however, that most tie-ins are with big, recognized
charities, not small local ones -- even if they're deserving, he
said.
"And, it can be an extremely inefficient way for people to give
to charity, because generally only pennies on the dollar actually go
to the nonprofit," he added.
Some corporate sponsors also are unclear in their promotions
about who's going to get what, Stamp warned.
"It's not good enough for the corporation to say that 'a portion
will go to charity'; you want to know exactly how much and to which
charity," he said.
There also are a growing number of online portals that promise to
rebate as much as 3 percent of purchases made through an online site
to charities. The consumer, Stamp said, "needs to weigh whether
buying a book through one of these sites beats going directly to
Amazon.com."
Stamp's main concern about the special marketing programs is that
consumers will begin to think that buying a product here or signing
up for a service there constitutes charitable giving.
"You cannot shop your way to being an effective philanthropist,"
he said. "The No. 1 way you can help a charity is to sit down and
write a check."
[Text copied
from file received from AP
Digital; article by Eileen Alt Powell, AP business writer] |
