Cause Marketing and the Wisdom of Crowds

‘Yadelin,’ a hospitality student, in a comment posted earlier this month about a post I wrote about using cause marketing to fund a charity’s endowment, expresses surprise that cause marketing could be considered to be about raising funds. Yadelin learned in a corporate responsibility class that cause marketing is primarily about raising awareness. With this post I respond to Yadelin.

Cause marketing can certainly be about awareness raising. But it can also be used to motivate all kinds of behavior. My cell phone service provider has used cause marketing to motivate customers to switch to electronic statements.

My local electric utility has used cause marketing to incentivize me to allow the company to put a switch on my air conditioning unit that they allows them to turn off my air conditioning during periods of peak demand.

On the left, Whirlpool, which makes major household appliances like washers, dryers and refrigerators, used elements of cause marketing to draw volunteers to a Habitat for Humanity community build back in Dallas back in 2008. The ad comes from the Alden Keene Cause Marketing Database.

Jewelery for a Cause uses cause marketing to take guns off the streets and then turns them into jewelry, potentially lowering violent crime rates.

But notwithstanding what you’re learning in you corporate responsibility class, in North America cause marketing is most often used to generate funds for causes. Jewelry for a Cause, for instance, also makes donations to organizations like the American Heart Association and the Alzheimer's Association. And the money generated via cause marketing is especially valuable because it's unrestricted.

Let me explain.

For causes, funds raised via cause marketing are generally unrestricted. That means that the charity/cause is free to use the money as it deems best. This is in sharp contrast to the way much (maybe even most) causes are funded these days.

Relatively few foundation or government grants to charities are unrestricted. Instead they require that the grants be used in very specific ways, oftentimes without funds for any overhead or capital expenses. Likewise major donors commonly demand restrictions on how their donations are used. Even funds from smaller individual donors might be solicited to buy a new van for the food bank, or an ECMO machine for the hospital. When donations to a cause are solicited for specific purposes, using it in any other way is, of course, unethical. 

Do causes need incentive to keep their ‘noses clean’ besides the law and the culture? Almost certainly.

But all the restrictions on donations mean that causes frequently chase ideas that aren’t aligned with their missions because funders have one kind of hobby horse or another. If I put out word that I had $50 million to give to one or more causes to find definitive proof of Sasquatch I can guarantee that would hear from dozens of interested charities, many of whom don’t have a Sasquatch-chasing mission or purpose.

Many critics of cause marketing think of it as frivolous or inconsequential. But the fact that you have to persuade not just one person but many in order for it to work means that cause marketing benefits from the wisdom of crowds.

I have, for instance, never seen a cause marketing campaign for Sasquatch hunters.

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