Cause Marketing is Not Philanthropy is a great article from Pyschology Today explaining how cause marketing actually works. It applies to all cause marketing, not just the pink version. Companies do not enter into cause marketing relationships unless they believe they will at least break even, and often unless they will increase sales and/or profits. All of the pink merchandise that you see every October is the product of cause marketing.
When you see that pink ribbon on a product and it pulls on your heartstrings, take a minute to see where your money is really going. If you really love it and money going to charity would just be a bonus, go ahead and buy it. But if you are purchasing it because money is going to charity, make sure money is actually being donated and that it is going to a charity you support. Here are a few questions you should ask when looking into a particular product. I focus on Pinktober but this applies to other causes as well.
1. Does any money from the sale of this product go to a breast cancer charity? Sometimes they slap a pink ribbon on a product to promote “awareness” with no money donated at all.
2. If the company is making a donation how is it structured? Is it a flat donation no matter how many products are sold? Is it a set amount per item? Is there a minimum and/or maximum donation?
3. How many items are being produced and sold? For instance if a company is donating $1 per pink widget with a maximum donation of $100,000 but is producing 1,000,000 pink widgets 900,000 people are buying a pink widget without any charity benefiting.
4. Who are they giving the donation to? Does the company clearly state which charity they support or cite “breast cancer” in general? If they name a charity, what does that charity do with the money?
5. Does the pink product cost the same as the regular version? Or are you paying a premium in overall price and/or receiving a smaller quantity? For instance the above pink widget costs $10 and the blue one costs $9. So the company is making $1 more on each pink product as well as getting the full profit on 90% of the pink products they produce.
6. Are you tempted to buy the item because it carries a pink ribbon and you want to do something to help find a cure? Would your money be better spent donating the extra cost of the pink item directly to the charity of your choice? Or is this pink item something you would buy anyway? Is it offered at a good price so any donation from your purchase is simply a nice bonus? Or maybe you just love pink?
Cause marketing is not all bad. But it is not philanthropy. Sometimes the campaign is designed so the company breaks even and the charity gets a big donation. Sometimes the company even eats some of the costs of the campaign. Sometimes the company profits far more than the amount that they send to the charity through increased prices/reduced quantities, a maximum cap on the donation and increased sales to people who pay more because they believe their money is going to charity. Proponents of this type of marketing campaign see it as a win/win. The company sells more products and the charity gets a donation. But all too often the company benefits much more than the charity and the consumer has no idea where their money is really going.
I’ll post some specific examples throughout the month. If you find a pink product and are curious – see what you can find online and post it here. I just did a little research on one I’ll post a little later that is so wrong on so many levels that I can’t decide whether to laugh or cry. Stay tuned!