A Company and Cause Grow Through Cause Marketing

Faithful readers:

The following is from my periodic column in the business weekly, the Salt Lake Enterprise. In it I profile how a fast-growing company and a innovative charity connected five years ago in a way that has greatly benefited both parties.

Warm regards,

Paul

Since its founding a little more than five years ago, Ragnar Events LLC, which produces the super-sized Ragnar Relay Series, has sprinted to become the nation’s premier overnight relay race.

And almost from the day Ragnar strung out its first yellow finish line, the company has had a charity partner, Salt Lake City, Utah-based Operation Kids.

Headquartered in Kaysville, Utah, Ragnar owns and operates 10 relay races around the country in Arizona, Boston, Florida, Las Vegas, Los Angeles, Minnesota, New York, Utah, Washington, D.C., and Washington State.

(The picture above comes from Ragnar's Relay Del Sol race, which takes place in Arizona.)

The races typically cover 200 miles. Teams of 12, sometimes dressed in wacky attire, start in the day and then race through the night, finishing the following day. Ragnar actively encourages participants to support Operation Kids.

Each team member runs three legs of three to eight miles each. The unique relay format makes it possible for even nominal runners to participate. And indeed, if you’ve been to Ragnar Relay’s seminal Wasatch Back, which starts in Logan, Utah and ends in Park City, Utah, you’ve seen competitive collegiate distance runners and weekend warriors and everything in between.

The reason Ragnar “baked” a charity component into the earliest business plans was both a business and a personal decision. Attorney Stephen J. Hill, a shareholder at Salt Lake City law firm Parr Brown, who co-founded Ragnar with his son Dan and Dan’s boyhood friend Tanner Bell, lost a toddler son in a tragic accident years before.

As an organization, Ragnar wanted to remember Steve’s son (Dan’s brother,) says Bell, senior vice president of sales and marketing. “We [also] believe that in any industry, but especially in ours, we need a cause our participants can rally around Ragnar is so much more than a run. It is a social experiment. It is a bonding experience,” Bell says. “We believe that experience is even better when the group has a common goal to raise funds for children. It is important to us to give back to the communities that we run through. We want to make a difference in those communities Not just by bringing them a really cool event, but by improving the future of their children.”

Operation Kids, now in its 10th year, was an early leader in the choice to fill that role. But the decision wasn’t automatic for the Ragnar executives. The sticking point was that Operation Kids’ brand was only five years older than Ragnar’s.

“Frankly, that is something we struggled with in the beginning,” says Bell. “There is a certain value to being partnered with a well-known brand. At the time, the Operation Kids brand was not well-known. However, partnering with an organization as passionate and dedicated as Operation Kids was what really sealed the deal for us. We wanted to partner with someone who is as passionate about children as we are about relay racing. Operation Kids certainly fits that bill.”

Indeed, academic research suggests that the sponsor-charity pairings most likely to yield the best results are symmetrical ones in which the charity is as well known as the sponsor.

In cases of asymmetry, where either the charity or the sponsor is the more prominent brand, which entity benefits most depends on the circumstances of the sponsorship.

Operation Kids, a 501(c)(3) nonprofit charity, has an intriguing solution to the sponsor-cause asymmetry. Operations Kids reviews the operations and financials of charitable organizations that serve children and finds the most efficient and effective. Operation Kids serves as a giving strategist for both corporate and individual donors. The staff ensures the accountability of any gifts by managing them all the way through the process.

Operation Kids’ costs are funded by donors and the proceeds from a large investment fund it holds. As a result, Operation Kids can promise that 100 percent of any donations made through it will go to the selected charity.

“The fact is, Ragnar has given — through Operation Kids — to youth fitness programs of the American Heart Association, Boys and Girls Clubs of America, Best Buddies and numerous other large and established organizations that serve the communities they traverse,” says Rick Larsen, Operation Kids president. “So the brand association is there for them.”

For its relationship with Ragnar, which really cares about where the donations go and how they’re used, Operation Kids got really granular “Our exact role with Ragnar,” says Larsen, “is to assist them in finding local charities — and by ‘local’ I mean charities in the communities they pass through — who represent two things. One, a commitment to some aspect of kid’s health and fitness, a logical fit for a running event; and two, meet our standards of efficiency with respect to programs and use of funds … We act as the research arm to find those fits and disperse the funds."

“The best part about the program is that it is a cause our participants can really get behind, Bell says. “This program provides participants with tangible results. They can see their dollars at work in their communities.”