Cause-Related Marketing

Cause-related marketing (CRM) refers to a marketing activity that involves a company forming a relationship with a particular cause or causes for mutual benefit. CRM can be characterized as a strategic marketing tool employed to achieve both social and corporate objectives; it simultaneously benefits the company and a charity or similar cause. The cause could be general, for example, a concern for the environment, or specific, for example, when a percentage of the sales of a particular product are donated to an identified charity. From the company's perspective, the benefits include the opportunity to enhance their reputation, differentiate themselves from the competition, boost employee morale, raise brand awareness, increase customer loyalty, build sales, and attract positive publicity. From the perspective of the “cause,” [Page 271]the benefits include increased revenue and public awareness of their activities.

CRM originated in the United States, where corporate philanthropy is typically characterized as “enlightened self-interest” or as “doing well by doing good.” American Express is credited with being the first company to launch a CRM campaign in the early 1980s. Increasingly, companies are moving away from “no strings attached” donations toward joint ventures in which commercial sponsorship of charities is included within overarching corporate objectives, and it is becoming common for contributions to social causes to be funded by the marketing budget rather than a central philanthropic fund.

There are several concerns raised by CRM. Neither the short-term nor long-term effects of CRM on charitable income are known. While CRM campaigns appear to result in increased funding for the social causes involved, there are fears that traditional sources of income may be harmed by CRM. There is concern that CRM will undermine traditional donations as companies come to expect a return for their contributions. Moreover, individuals may be less likely to spontaneously donate to particular charities if the products they buy support social causes. There is also a question relating to the sustainability of income for social causes from CRM. When a company feels it has exhausted CRM's benefits it will move to more profitable campaigns leaving the social causes they previously supported to find alternative ways of generating income. If CRM does undermine spontaneous donation, then after the campaign ends the charity may be badly affected. This possibility raises the question of what, if any, ongoing responsibility companies ought to have to the social causes they have entered into CRM relationships with after the campaigns end.

On a more theoretical level, the concern is that CRM marks a shift from an intrinsic motivation for companies supporting social causes (i.e., supporting them because it is the right thing to do) to an instrumental or prudential reason for doing so (i.e., supporting them to derive a benefit). At an individual level, CRM may undermine consumers' commitment to social causes because it is mediated through a market transaction that could lead to a sense of moral disengagement from social issues.