Continuing on my discussion from last week. Here I look at the difference between cause-related marketing and corporate social responsibility. The blurring of these topics is where, I believe, the long-term consequences lie, particularly for faith communities.
There is a tremendous amount of confusion in the literature, and in the workplace, about what these terms really mean. Some people use them almost interchangeably, some consider cause marketing to be a subset of CSR, and some see them as different strategies altogether. While these definitions continue to be negotiated, I will provide what are considered to be the prevailing differences between the two.
According to marketing research firm Mintel, cause-related marketing (CRM) “is when companies partner with charitable organizations to help non-profits better achieve their goals. Cause-related marketing is attached to a media campaign, with money generated for the cause through the sale of products.” So an example here that many of you may be familiar with is Procter & Gamble’s support of the Special Olympics. Consumers buy P&G products and a percentage of the sale goes to the nonprofit.
CRM actually began quite recently, in 1983, when American Express launched its campaign to raise money to restore the Statue of Liberty and Ellis Island. The campaign was incredibly successful. “The company promised to contribute one cent for every card transaction and $1 for every new card issued during the last quarter of 1983. American Express not only collected $1.7 million for the restoration effort – there was a 28 percent increase in use of their credit cards, not to mention massive press coverage and free publicity” (Stole, 2007). This appeared to be a win-win for everyone and other businesses jumped on the CRM bandwagon and spent increasing amounts of money to support these campaigns. In 2007, American corporations spent $1.34 billion on CRM campaigns. This is up from $733 million in 2001—an increase of 83 percent.
More recently (Forbes suggests 2006) organizations began to tout Corporate Social Responsibility (CSR) in addition to CRM. This is in large part due to the “green” movement, where every company wants to promote that they are doing something to help the environment. But CSR is not new and in fact predates cause-related marketing by 30 years appearing in the literature in the 1950s. According to Harvard’s JFK School of Government “Corporate social responsibility encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.” Thus CSR institutionalizes what we used to call being a good corporate citizen—something corporations just did, not something they promoted.
Today, it’s not enough to simply be green; corporations broadcast that they are green and for good reason. In Cause for Concern: Results-Oriented Cause Marketing, Stephen Adler states that 77% of consumers polled changed their purchasing habits due to a company’s green image.” But CSR is not only about the environment. It is also about human rights issues, workplace issues, community impact, and ethical investing as the definition suggests.
To put it simply: if a media company decides to stop advertising unhealthy food to children and instead commits to promoting healthy eating, that’s corporate social responsibility. If, on the other hand, Media Company X partners with a food company to help feed hungry children that’s cause marketing.
These distinctions, however, have become blurred as corporate social responsibility is increasingly done with a marketing objective in mind. While corporations might have been good citizens in the past to comply with government regulations (so it is the rare company that ever did this out of the goodness of their heart), today corporations comply for the good of their pocketbooks.