Comments I made to the Los Angeles Times small business reporter Cyndia Zwahlen about cause-related marketing and small business were published in yesterday's paper.How can you make sure that your good intentions lead to good results?"
They have to do the same thing they do with their cash flow; they have to manage it," said Paul Jones, a cause-related marketing consultant and principal at Alden
Keene & Associates in Sandy, Utah. He also writes a blog on the subject.As with any business strategy, skimping on planning or the tactical steps probably will result in disappointment for the small business and the charity.
To avoid that, here are tips from Jones and other experts:
* Don't pick a charity that's a poor strategic fit. More small businesses these days want to tie their charitable giving, whether time or money, to a cause that means something to them and their customers. Such an arrangement can boost profits but it has to make sense first."If you're a local welding shop, you'd better have a pretty good reason to support the Susan G. Komen Breast Cancer Research Foundation --a reason your customers will easily and quickly understand," Jones said. Research shows that both parties -- your small business and your target charity -- "get the most bang for the buck when there's a clear strategic fit," he said.
* Don't overlook smaller charities. Some small businesses pick a charity that is just too big to work with them well, Jones said. Not all of the biggest charities can offer the kind of recognition or help that a small business might want or need, he said."Some small-business owners might be OK being a minnow in a big lake," Jones said. Those that aren't should probably choose to support smaller charities.
* Don't skip your homework. Don't assume every charity offers the same benefits to donors or is even willing to work with your small business.
At Bread for the World, Stapleton had to turn down a sports-drink maker who wanted the charity to market its product in exchange for a cut of sales. Simple research would have shown that the organization doesn't seek those kinds
of arrangements. At Santa Monica-based Heal the Bay, Natalie Burdick,
development program manager, turned down a jewelry maker who wanted to partner with the charity on a trunk show spotlighting items made from seashells. "There is a commercial trade in seashells and coral, and the practices are very
environmentally destructive," Burdick said.* Don't expect advertising and marketing exposure. Businesses often expect a charity to broadcast its offer to charity members in some way. Most charities don't.
"Nonprofits are not set up to do that," Burdick said. She's also had to turn away businesses that wanted Heal the Bay to put on a charity event featuring the company.
* Don't treat the arrangement casually. If there will be a public tie between Heal the Bay and a small business, the charity will typically insist on a formal written
agreement."They were actually pretty rigid about what they needed because we actually had to sign a contract with them that stated that in order to publicize that we donate to them," we had to follow certain rules, said Lisa Peri, co-owner of Lucky Earth, which makes a cleaner for waterless car washes.The 1-year-old company, which she owns with her husband, Jeff, promotes Heal the Bay on the back of its spray bottles. Once Lucky Earth is profitable it will donate 1% of its net income to the organization.
Head of Oliver's Artisan Breads signed a formal agreement that spelled out her plan to donate 10% of the profit from each loaf she sells at a grocery store. That sector is a small part -- 12% -- of her business, but the deal offered Bread for the World valuable exposure to its target demographic. Head will put a sticker on thousands of loaves of bread this year alone, touting the charity and the donation.
* Don't back off when money is tight. To sustain charitable giving as part of your larger business purpose, you have to be consistent, Jones said. Many consumers look for information about a small businesses' charitable activities. Profit margins are slimmer this year at Oliver's Artisan Breads as higher fuel costs and even bigger jumps in the price of wheat have sliced into income. But the owner isn't letting that stop her.
"Does that change how I feel about the need to recognize that there are hungry people in the world?" Head asked. Her actions demonstrate that the answer is no.
"I put a guaranteed minimum in the agreement [that] they will receive at least $5,000 annually," Head said. "But we expect to blow way past that."
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