Cause Marketing: Does Donating to Charity Help Brands Sell More Stuff?

Welcome to the world of cause marketing.
Hal Koss
March 16, 2021
Updated: June 4, 2021
Hal Koss
March 16, 2021
Updated: June 4, 2021

I was searching for a Zoom alternative when I came across a video conferencing service called Whereby, which pledged to plant one tree for every three meetings held on its platform during the month of February.

You’ve probably seen companies do this before. Maybe Yoplait, with its Save Lids to Save Lives campaign, which donated to breast cancer awareness efforts each time a customer mailed in a pink lid from one of its yogurt cups. Or Subaru’s Share the Love event, during which the carmaker contributes a percentage of year-end sales to local charities.

Maybe you’ve even bought from companies like TOMS, Bambas, Warby Parker or Ethos Water, which have made support for social causes part of their brand DNA.

What Is Cause-Related Marketing?

Cause-related marketing, or cause marketing, is when companies incorporate their support of a designated charitable cause into a promotional campaign, often pledging to donate a portion of sales that occur during a set period of time.

When done right, charitable donations can make a real difference. But does asking people to buy products in return for giving to charity really work as a marketing tactic?

Apart from the desire to make a positive impact, what are the benefits for companies engaging in cause-related marketing? Does it increase sales? Boost brand equity?

Will people actually abandon Zoom for Whereby because it means more trees in the ground?

ReadHow to Build Brand Trust

 

Consumers Prefer Brands That Care

The general consensus among academics who research this issue is that, yes, consumers do tend to view companies more favorably when they are seen supporting charitable causes.

In a 2000 study, 85 percent of undergraduate students, when given the option to buy from one of two companies with products of equal performance and price, chose the one that had supported social and charitable causes.

A 2007 study revealed that participants who were exposed to advertisements containing cause-related components held “significantly more favorable attitudes” toward the company, compared to participants who saw a version of the ads without the cause-related component.

All else being equal, cause-related marketing can act as a tiebreaker.

 

Does the Specific Cause Matter?

Cause-related marketing generally enhances consumer perception of a company. But does that mean a company can approach cause-related marketing arbitrarily, and pick a charity at random, knowing it will work in its favor no matter what?

Researchers who conducted the 2007 study above also discovered that, for most consumers, it hardly mattered whether the charity seemed relevant to the brand. They found that an orange juice company that supports a healthy diet cause is viewed by most consumers the same as if it partnered with a traffic safety cause.

But researchers also learned that, for some participants, who the researchers identified as “brand conscious” — meaning they tend to purchase well-known branded products and view the brands they buy as a reflection of their identity — it does matter that the cause-related marketing effort matches the brand identity.

In other words, brand-conscious consumers would be confused by a company’s support of a seemingly unrelated or random cause.

So ideally, companies partner with causes that have some degree of association with the brand, lest they risk alienating brand-conscious consumers.

 

Too Close for Comfort?

But is there such a thing as too close of a match between brand and cause?

Kimberly Taylor, a marketing professor at Florida International University, suspects so. She told me that cause-related marketing campaigns can’t be seen as an attempt to exploit the cause for gain, or consumers might turn away from the company.

“[Consumers] may begin to question,” Taylor said, “if you are appearing to do something good when it’s really just benefiting you in the end.”

Taylor gave an example. If a sporting goods company sponsored a sports program for disadvantaged youth, some consumers would tend to view that favorably, since it’s a worthy cause and it’s related to the company’s expertise. Some other consumers, however, might see the campaign as an attempt by the company to sneakily market its products to youths in the sports program; they’d be more comfortable if the company supported a cause less directly related to the brand.

When choosing a cause to support, Taylor said, brands may want to think carefully.

ReadHow Venture-Backed Startups Enter the World of NGOs

 

Finding Authenticity

Brands may also want to tread lightly.

Karen Goldfeder is the vice president of business development at DoSomething, a global nonprofit that focuses on mobilizing young people to make social change. She works closely with lots of corporate partners, and it’s part of her job to make sure businesses and causes are a good match for each other. Because if they’re not, the brand risks coming across as inauthentic, which has the potential for blowback.

“It needs to be a cause that makes sense for [the brand] to talk about,” Goldfeder told me, and that they “have a track record to show up in that space.”

She gave the example of hotels that have signs in the shower asking guests to keep water use to a minimum, citing environmental impact.

Because the hotels in these instances don’t typically demonstrate what they have actively been doing to positively impact the environment, this ask comes across as inauthentic, a ploy to nudge guests into saving the hotel money on its water bill.

“What young people want to see is brands stepping up.”

“What young people want to see is brands stepping up, particularly in these pivotal moments,” Goldfeder said. “But not just with words — with actions.”

Consumers, young ones especially, are more savvy and discerning than ever before. With the internet at their fingertips, they can easily find out if a brand is merely paying lip service with its cause-related marketing, or if it’s hiding something internally that doesn’t align with the values it claims to support externally. A discovery like that can go viral.

“The bottom starts falling out if their products and services aren’t equitably distributed, or if you look at their leadership and they aren’t including people of color and BIPOC individuals or building systems to be promoting those talents,” Goldfeder said. “Cause marketing only works if you have a good cause-story to market. You can’t do the work externally if you aren’t doing it internally.”

But Goldfeder doesn’t see the risk of inauthenticity as a reason for brands to scrap their cause-related marketing campaigns and sit on the sidelines. They can’t afford to do that either.

“It’s table stakes for brands to say that they have a cause mission.”

More than three-quarters of young people in America expect brands to use their platforms to advocate for social justice, Goldfeder said, adding that a survey she read revealed that only 3 percent of young consumers don’t expect brands to address the issue of racism in America.

Brands can no longer just cherry pick the “safe issues.” They have to take a stance on topics previously thought of as too controversial.

“It’s table stakes for brands to say that they have a cause mission,” Goldfeder said. “It’s now required to say how you are going to show up at this really pivotal moment in history and show what your brand stands for, where you’ll compromise and where you won’t. And when brands are making those tough decisions and communicating those in meaningful ways, people are listening.”

 

The Giving Trees

Diana Chaplin is the marketing director at One Tree Planted, a nonprofit organization that helps facilitate reforestation projects across six continents.

Lately, she said, One Tree Planted has been approached by lots of businesses that want to set up a one-for-one giving model for their brands, where for every product sold, they commit to planting a tree.

“It’s been exponential. If I was to make a chart,” Chaplin said, making a hockey stick shape with her hand, “it’d look like this.”

How it works is, businesses donate to One Tree Planted, which pools together all the donations and allocates them to vetted local partners on a project-by-project basis. One dollar donated from a company, in the aggregate, helps one tree get planted.

The organization backs hundreds of projects a year, from planting mangroves in Asia, to scaling up seedling nurseries in Australia, to carbon sequestration efforts in Iceland. In 2020, the nonprofit planted over 10 million trees.

Chaplin said that all kinds of businesses partner with One Tree Planted. Most of them have brands that have nothing specifically to do with reforestation.

But she also mentioned that tree planting can provide a narrative that fits lots of different companies looking to do cause-related marketing.

Planting trees is about regeneration, restoring health to something that’s been damaged, she said.

“There’s a certain kind of narrative there that fits with what a company might be really passionate about.”

All this brings to mind Whereby, the video conferencing service, which planted over a million trees as part of its February campaign (partnering with an organization called Brynk, not One Tree Planted).

I asked the company “why trees?” There are seemingly endless other causes a platform for video meetings could support.

Despite being more carbon-friendly than work-related air travel, video meetings still come with an environmental cost, a company spokesperson told me. So the tree-planting campaign was a way to acknowledge that, and to “go some way toward giving back.”

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