Firms Wrap Philanthropy in New Package
Amid all the brands of toilet paper, paper towels and trash bags, Scott Paper Co.’s Helping Hand does seem different. The package logo says, “Every time you buy Helping Hand, you help children with special needs,” and a back panel explains that a nickel from each purchase goes into a fund for six charities fighting children’s diseases.
Even cynics are intrigued. They have their suspicions about commercial promotions, but they buy. “I need garbage bags anyway,” says a Los Angeles shopper. “Why not spend my money helping some organization at the same time?”
This is cause-related marketing, the term that applies, says James McCreary, March of Dimes director of national promotions, “anytime a company is involved in raising money for a charity where part or all of the benefit to the company is that they move more product, as opposed to having the grants department sign a check.” Such outright grants seem the truer altruism, but it’s the current wish of marketing departments to “tap into the things people care about,” says Craig Smith, editor of the Seattle-based Corporate Philanthropy Report, that’s “providing a major new source of funding for nonprofits.”
Methods Differ
Some campaigns are tied to particular products--Kentucky Fried Chicken’s 50-cent donations to the March of Dimes in May, 1979, for every bucket or barrel bought; General Foods’ promise of 10 cents to Mothers Against Drunk Driving in 1985 for each proof of purchase from a package of Tang, or Scott Paper’s annual “Tools for Schools” campaign, in which consumers give Scott product seals to their schools to redeem for equipment.
Some are tied to method of purchase. Since 1981, American Express has increased its usage and raised money for various causes (including the Statue of Liberty) by promising donations for every new card issued and for each purchase made. MasterCard’s 1987 campaign, “Choose to Make a Difference,” was “designed to increase card usage during the holiday season” by promising that for every purchase charged on a MasterCard, 6/10ths of a cent would go to a group of charities. The result: $2.8 million to charities.
Then there are “affinity group” credit cards for members of professional and alumni groups or donors to such organizations as the Sierra Club and Greenpeace. The issuing bank gets a pre-selected group of potentially good cardholders, eager to use that card. The group gets money: Sierra Club got one-half of 1% of charge volume for its 26,000 cardholders with Chase Lincoln First Bank in Rochester, N.Y.--$250,000 the first year. And the consumer gets another card, although rarely the best of deals in annual fees or interest charges.
Candor Part of Deal
But Helping Hand makes Scott the first major package goods company to dedicate a full line to raising some money for charities. Viewed by the company, says Nancy Ford, Helping Hand’s business unit manager, as “a very solid way of making a difference in the community and a good way for Scott to increase the business,” the line was introduced in the summer of 1986 in California, Arizona and Nevada.
For each unit that leaves the warehouse, Scott deposits five cents into an escrow account for United Cerebral Palsy, Easter Seal Society, March of Dimes, the National Assn. for Sickle Cell Disease, the Leukemia Society of America and the Cystic Fibrosis Foundation. None of the money goes for Scott’s administration or advertising; the charities can use 25% as they will, but 75% must go to projects screened by Scott.
This, says McCreary, is “the nirvana of cause-related marketing, as pure as it can get. The more sold, the more money for charity.” Part of the purity is the candor. Sales are always the goal of corpo rate sponsorships--whether they support athletes or television programs--but it’s rarely broadcast that the company benefits, too.
The candor may itself benefit the company, differentiating not just a corporate image, but individual products: They stand out on a crowded shelf. They may even get better shelf space because it makes the retailer look good. Furthermore, the corporation’s involvement is constantly in front of consumers, not just during one event or one promotion, but whenever they buy or shop. The products, moreover, are profitable--”slightly less profitable than other Scott products due to the donation,” says Scott spokesman Mike Kilpatric, but providing sales and profits that are additional to, rather than cut out of, its other lines.
The company’s benefit may make such donations no less charitable than the quiet corporate grant. “It’s not a question of moving from pure philanthropy to market-driven gifts,” says Craig Smith. “It may actually be a shift from the veneer of altruism--supporting senior management’s pet project or using philanthropic gifts to buy into old money circles--to supporting what customers and corporate constituents really care about.”
The advantage to the charity is obvious: money--and it’s not insignificant. Helping Hand’s nickels have amounted to $1.6 million so far, and even divided six ways, says Joe King, national director of development for United Cerebral Palsy, “that is major giving.”
The arrangement may offer consumers something, too--a cents-off coupon or special price or just pride. Indeed, a MasterCard survey during the “Choose” promotion “indicated that the overwhelming majority of MasterCard cardholders felt good about themselves when using their MasterCard card.”
Therein lie dangers, of course. Comfortable that their charitable giving is taken care of, people may give nothing on their own--thus losing a tax deduction and costing the charity a more substantial gift. Too warmed to be questioning, they may not seek a sign or symbol of the given charity’s approval or an explanation of the financial arrangements--the amount donated, the amount profited, the minimum funding guaranteed, any maximum put on the donation.
They should be alert to potential abuses because cause-related marketing seems on the increase. Indeed, it’s not just a fad, says McCreary, who’s already “working on 35 existing or impending deals at a time,” but “an established part of the mosaic of advertising and promotional opportunities.”
