Be Glad It’s Called Cause Marketing and Not 'Marketing Related Philanthropy'

Back in the 1980s, at the behest of Jerry Welsh, American Express trademarked the term ‘Cause-Related Marketing.’

Welsh, who was then executive vice president worldwide marketing and communications at Amex, coined the term ‘cause-related marketing’ to describe the legendary campaign to fund the restoration of the Statue of Liberty in 1983.

In a Feb. 2009 interview with Welsh, he told me that the wording of this new term was purposeful.

“I believe in the deliberate use of language, so I was careful in crafting the term ‘Cause-Related Marketing.’ CRM is not philanthropy; it’s rather marketing through an artful association with a charitable cause. Otherwise, I would have called it something like ‘Marketing-Related Philanthropy.’”

Despite Welsh’s fastidiousness with language, one of the wonders of the term cause marketing is that it’s flexible enough to permit efforts for causes that aren’t officially-sanctioned charities. In my hometown of Salt Lake City, there’s a cause marketing campaign going on right now for a cause that is not a charity.

For as long as I’ve lived in the Salt Lake Valley (more than 20 years now), Sugarhouse Park, a 110-acre city park, has hosted a terrific fireworks display on the Fourth of July. In the wake of budgetary pressures, Salt Lake City cut funding for the fireworks display in 2010.

So local citizens and several franchises have banded together to raise $75,000.

Among their efforts, the button above. I bought it for $1 at a Noodles & Company store, but they’re also available at Whole Foods and Jamba Juice locations in the Salt Lake Valley.

The young lady who sold it to me knew the whole story and related it effortlessly.

The button serves as a kind of an campaign icon. But this one has a twist.

The button entitles the wearer to premium seating at the July 4 event and discounts at the participating retailers.

The Sugarhousefireworks.com website also takes PayPal and lists available sponsorship packages. As of this writing, the site says it still needs to raise $19,500 by June 1.

I want to emphasize again that while we’re talking about a cause… saving the July 4 fireworks display…we’re NOT talking about a charity.

Let us therefore offer thanks to Jerry Welsh and to Amex for devising a wonderfully appropriate and perfectly flexible term to describe the way that causes and companies can come together in ways that benefit both.... whether or not the cause is a charity.

Ditch or Keep Your Embarrassing Cause Marketing Celebrity?

Uh-oh! Your A-list celebrity supporter just pulled a Tiger and embarrassed himself and his family on a tape first seen on TMZ and now airing on every screen on the planet. It seems like everywhere they point a camera, someone new is coming forward to say that they, too, did something appalling with your alpha celebrity.

(Cue Karl Malden VO) “What will you do? What will you do?"

Fire him? Disavow? Stand by her for as long as you can stand the heat?

A new study by Harris Poll suggests that maybe you do nothing.

Although there is a veritable cottage industry of celebrity trackers waiting for them to step outside without any makeup, or look less than flattering in their bikini, or utter a drunken calumny, or run over a paparazzi in their Mercedes, maybe none of that matters.

An Adweek Media/Harris Interactive Poll published Monday finds that three-quarters of Americans don’t impute any of the blame or think negatively of your brand as a result of your endorsers’ indiscretions.

Concludes the study, “while it might matter a little more to certain groups than others, in general, strong majorities of Americans say it really doesn't change how they feel about the brands. While it is understandable that the companies may not renew an endorsement deal, there doesn't seem to be any great need to pull current endorsements for fear of collateral damage.”

While I admire Harris' certitude, I’m less sure.

Celebrity media culture has become something like a morality tale.

Here’s how it plays out on, say, VH-1’s long-running series “Behind the Music.”

Band works hard and gets signed. Band sells millions of copies. Now idly-rich, the band indulges in vices like drugs, booze, and indiscriminate sex. The hits stop coming. The band breaks up. Some band members detox. Some don’t. One dies. Now, years later, the only whiff of remaining fame is on Behind the Music.

The celebrity magazines like to do a periodic feature on how actors do ordinary things like shop for dog food at the Ralph’s in Beverly Hills, just like you and me. Or they show celebrities with hammer toes, or crossed eyes, or before and after photos of the nose job, or the celebrity picking her newly-petite nose, or showing starlets at the Emmies in beautiful gowns stained by sweat.

For a long time, the photo editors have delighted in depicting celebrities with their faces screwed into the funniest… and most unflattering… looks. There’s a website that shows the photos of celebrities’ arrest mug shots. Many more websites specialize in photos like the one above of actress Katherine Heigl’s wardrobe malfunction at an entertainment industry event in March.

In other words, while the celebrity media often goes for the salacious, they are ultimately subverting celebrity, our obsession with it, and the excesses of its trappings.

Now, I personally have no problems with any of that.

But no matter Adweek/Harris’s conclusions, if I’m a company with a celebrity spokesman or a charity with a celebrity supporter I wouldn’t want my celebrity to become a cautionary tale.

Here’s why.

It’s exceedingly tricky to extrapolate from the general questions asked (and not asked!) in the Adweek/Harris to your very specific situation. It could certainly be, for instance, that people responded to this poll while suffering from a bad bout of ‘Tiger Fatigue.’ I know I am.

In my book this survey is properly used to start the conversation about how long to stay with an embarrassing endorser. Not end it.

How to Start a Million-Dollar Social Enterpprise

For the last 10 years or so it seems like every other business leader I talk has an idea for a business that will funnel profits to a charity, while every charity leader I know wishes s/he had a for-profit venture that spun out loads of cash.

Examples of both abound. National Geographic Magazine is a benefit of membership in the not-for-profit National Geographic Society. But almost everything else—their catalog, their television shows, their travel tours—are for-profit business enterprises; enterprises on which National Geographic pays taxes.

A recent example of a company meant to funnel profits to nonprofit endeavors comes from my own hometown. Members of the billionaire Jon M. Huntsman family have acquired the high-end Sotheby’s real estate franchise in the luxury enclaves of Sun Valley, Idaho and Jackson Hole, Wyoming. (The splendid photo of the Grand Tetons comes from JT Palmer Photography).

Profits from the franchise will go to the Huntsman Cancer Center here in Salt Lake City, one of only a small handful of National Cancer Institute designated cancer centers between Texas and California. The family founded the Huntsman Cancer Center.

With the stroke of a pen, the Sotheby's franchise in Sun Valley and Jackson Hole has become a social enterprise.

The Huntsman family has been a generous donor to causes inside and outside of Utah, and not just with their money. The oldest son, Jon Jr. is the current U.S. Ambassador to China, and a former two-term governor of the state of Utah.

Kudos to the businesses that actually pull off the strategy of operating a for-profit venture to fund in whole or part a nonprofit entity. Certainly it doesn’t always play out that way.

I remember a small restaurant chain that was meant to fund a charity that taught teen leadership skills. The restaurant was terrifically-branded, but not well operated. The recipes just weren’t good enough.

Another for-profit venture I’m familiar with was a software firm that was founded to generate cash flow for an umbrella charity. The software company took years to get to profitability. Meanwhile the umbrella charity was left to develop its own funding mechanism just like any other charity.

Let me hasten to add that both these social enterprises were founded by experienced business people.

The fact is, new businesses have high failure rates and high margin businesses are hard to find. And you can be sure that if you demonstrate an ability to make a good profit in your niche, competitors will appear who won’t care about your cause component.

How did the Huntsmans mitigate those risks? Three ways:

1. They bought an existing franchise with a strong brand and a history of sales results. They bought their sales, in other words.
2. They left current management intact. The thinking probably went, ‘this group got the business to where it was attractive enough to buy, why insert uncertainty into the mix?’
3. This is the hardest one… they had the capacity to self-fund the purchase. They probably still borrowed the money, but unless the Sotheby franchise was hundreds of millions of dollars, the Huntsmans have the wherewithal to self-fund most purchases. Why is this important? Well, the cost of money is cheapest to those who already have money. There’s an element of truth to quip that ‘bankers only lend money to people who already have money.’

Wait a minute, you’re saying, this sounds like the old saw about the best way to make $1 million. The joke goes: “OK, first start with $1 million...”

And you’d be right. The best way to start a million-dollar social enterprise is with $1 million.