Cause Marketing Dampens Giving?
As reported by Marketing Daily, here’s a study from the University of Michigan Business School that suggests cause marketing dampens giving.
Marketing professor Aradhna Krishna conducted studies involving 300 college students to see whether consumers who bought products linked to a social cause would reduce subsequent donations to that cause. She found that charitable giving is lower if consumers buy a cause-related product — even if the consumer planned to buy it, anyway, regardless of its link to a cause.
“Consumers appear to realize that participating in cause marketing is inherently more selfish than direct charitable donation, reducing their subsequent happiness (versus a direct donation),” Krishna says. “Unfortunately, this doesn’t prevent them from substituting it for charitable giving, which reduces the overall charitable donation.”
I’m not sure a study based upon 300 college students would lead me to abandon cause marketing, but I have often wondered about this question:
Does buying something that generates a donation really count as a donation? Can we possibly look at this as an individual’s ‘trainer’ contribution — a promising step toward making a ‘real’ cash-out-my-pocket contribution?
Or should we regard these as faux contributions, lacking sufficient altruistic grounding to qualify as genuine donations?
I know I’ve heard Roger complain about all those “damn tee-shirt buyers” at a prominent nonprofit I dare not mention!
Yet I suppose at the end of the day, if the mission of the charity or cause is indeed further fueled by tee-shirt sales, and there’s no significant opportunity cost (i.e., the staff wasn’t distracted from its direct mail and online fundraising program … and didn’t waste a fortune trying to convert reluctant merchandise buyers), then the more fuel the better, wherever it comes from.
What do you think … Is any giving good giving?
Tom
7 responses to “Cause Marketing Dampens Giving?”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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Cause marketing benefits both the NP and business. The campaign exposure that a business can bring to the NP, new volunteers, or additional donations are the value added piece that Aradhna does not mention. Businesses benefit just as well riding on the NP’s “GOOD” coat tails. NP’s need to negotiate a cause marketing relationship carefully being mindful of branding, and fair dollar value for a promotion. The other aspect of cause marketing that isn’t noticed in this study is the value of a campaign that includes a highly visable product that stimulates conversations between people that continues long after the campaign is over. So I would ask the question. What value can be put on that?
Perhaps when people purchase a product that they believe will help a cause, they consider that their “gift.” I think this would be especially true if that product is more expensive than comparable merchandise. Additionally, when charitable dollars are limited, people are forced to make choices. College students in particular probably have pretty small charitable budgets – but I think this holds true for most of us living in this tight economy.
Perhaps that t-shirt (or whatever) can be a first step toward a philanthropic habit – if the nonprofit handles the relationship well, and is willing to do the work to tell its story in a compelling way.
I agree with both posters above, but think that Lucinda has it especially right at the end of her post. A product that VISIBLY supports a cause (reusable shopping bag, t-shirt, cap, backpack, mug, etc) helps to physically (versus digitally) build a social network and provides the buyers/users with an opportunity to promote their favored causes, while enjoying a related product at the same time….I must agree though that college students are not the potential donor base that I would study.
On the other hand – some cause marketing products might suffer for their cause. These could include those that support gay rights, certain religions, homelessness, the latest crisis (e.g., Haiti) or the like. (I wonder what my Obama campaign stuff is worth now – not much to me, I can tell you!)
I’d like to know more about this, and wish that someone would complete a study using a much larger and broader potential donor base that could be segmented.
I would challenge this as you would need to know or qualify how many of those people would, in total absense of the cause marketing campaign or specific additional awareness of that non-profit, would choose to give to that non-profit in the first place. If you could qualify that number (which I am guessing would be less than 1% depending on the non-profit?) then you can match this against the percentage of people who say they would still give to the charity, even though they have bought a piece of merchandise.
In my experience these two groups – ‘direct donors’ and ‘donors via purchasing a product’ – seem to be two different groups.
I also agree with the above post that awareness and advertising are worth a lot (and are not usually a big part of non-profit budgets) Although the partnership needs to be in alignment with the right product to fit with the cause in order to be a positive ROI.
Anita, you could check out the Cone Cause Evolution Study. It’s a larger study that offers some interesting insights. You can access it at their website.
I make three points in my own post on the Michigan Study.
http://selfishgiving.com/cause-practices/cause-marketing-selfishness-good
First, there’s a lot of evidence to support that people are actually quite happy and more generous after support a cause via a cause marketing promotion. According to a 2010 Cone Study that involved a larger sample than the Michigan study, 86% of Americans say purchasing a cause-related product did not replace their traditional donation(s) to their favorite charity.
Second, the study points out that consumers are often unclear of how much of their money is going where. This is a problem. Fortunately, transparency is getting better with cause marketing and the mobile giving, location-based services and QR codes promise a new level of openness and accountability.
Finally, the study’s lead researcher warns causes to be wary of unscrupulous companies. Always good advice, but you need to understand how purchase-triggered cause marketing–the ONLY type of cause marketing examined in the study–works. Companies are working with causes to help and earn favorability, not damage their reputations. You can’t steal a halo. Also, they type of cause marketing the study examined is generally used by larger causes the know how to work with company and protect their interests. Smaller companies and causes prefer direct donation programs like point-of-sale.
The overrding theme of the study is that selfishness in philanthropy is harmful. I’m not sure that’s completely true as there are many non-altruistic reasons for giving. A little selfishness might just be good for the greater good.
Joe
@joewaters
Thanks for bringing attention to these studies, This is great news as there are more and more studies conducted in the social sciences that study what motivates people to give.
Businesses that are using haphazard ideas for cause marketing and to engage their customers in giving, and non-profits that are now seeking to find ways to get more value from their corporate sponsorships now have more information about works and what doesn’t.
For more examples of research done on motivation and consumer giving see my post in Jan 2011.
http://businessthatcares.blogspot.com/2011/01/business-doing-better-at-doing-good.html