by Claire Rosenzweig, CAE | President & CEO

Better Business Bureau Serving Metropolitan NY

Aug-17-2009

Are you planning to conduct a cause-related marketing campaign? If you are I have two words – transparency and disclosure. We urge that your campaign clearly enable consumers to determine the terms of the campaign, know the cause(s) involved and how much of their donation is going to the cause.
 

Cause-related marketing (CRM), a term first coined by American Express®,’to describe its fund raising campaign to restore the Statue of Liberty, is defined as the public association of a for-profit company with a nonprofit organization, intended to promote the company's product or service and to raise money for the nonprofit.
Cause-related marketing is a hot topic which has been heightened by the latest attention given to sustainability efforts (including but not limited to “green”) as well as the adverse conditions created by the current economic crisis. Businesses large and small can utilize this way of reaching consumers while building their brand. If done properly, it can lead to positive impact for a business and much needed funds for a charity. However, done incorrectly it can potentially damage the reputation for all involved. Therefore, we urge consideration of the following in this area; transparency and disclosure as well as researching whether the charity with which you plan to partner lives up to charity accountability standards.
 

Regarding transparency, the BBB offers 20 Standards of Charity Accountability as guidance to charities in terms of governance, finances, marketing and impact effectiveness. We also want businesses to know that when it comes to Cause Related Marketing campaigns, the 20 BBB Wise Giving Alliance Standards of Charity Accountability can be of service to them too. To help achieve transparency businesses can look to Standard 19 which says: Clearly disclose how the charity benefits from the sale of products or services (i.e., cause-related marketing) that state or imply that a charity will benefit from a consumer sale or transaction. Such promotions should disclose, at the point of solicitation: a. the actual or anticipated portion of the purchase price that will benefit the charity (e.g., 5 cents will be contributed to abc charity for every xyz company product sold), b. the duration of the campaign (e.g., the month of October), any maximum or guaranteed minimum contribution amount (e.g., up to a maximum of $200,000).
 

When setting up a cause-related campaign we urge everyone to understand these standards by which the BBB reviews charities. It is also critical for businesses and charities to know and comply with laws regarding cause marketing. In many cases a written agreement or contract with the charity may be required.
 

Even if you have good intentions and want to help a charity with your cause marketing program, you must ensure that you have the charity’s permission to use its name.
 

Knowing who you are doing business with is also important. Be sure that the nonprofit you are supporting with your program is a legitimate charity. Ask us at BBB, go to Guidestar.org, or check on IRS website at http://www.irs.gov/charities/article/0,,id=96136,00.html. You can also check BBB reports on national charities at http://www.bbb.org/charity or local charities on our website at http://www.newyork.bbb.org.

By understanding why the standards are in place, how they work, and who meets them… you are in a better position to choose a cause that not only aligns with your business values but can be trusted to do what it says it will do. Partnering with a charity that has met the BBB Standards of Charity Accountability and disclosing the key elements as noted creates a foundation of transparency and trust with consumers.
 

You can find a list of the BBB 20 Standards of Charity Accountability and the list of BBB Accredited Charity Seal holders (charities that meet our standards and have chosen to promote the BBB Accredited Charity Seal according to our policies.)
on the BBB of Metropolitan New York’s website: www.newyork.bbb.org. 

Note:
Claire Rosenzweig is President and CEO of the Better Business Bureau Serving Metropolitan New York.
The BBB Serving Metropolitan New York, Long Island and the Mid-Hudson Region is an unbiased non-profit organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. BBB provides objective advice, free business BBB Reliability ReportsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust. To further promote trust, BBB also offers complaint and dispute resolution support for consumers and businesses when there is difference in viewpoints. The first BBB was founded in 1912 by advertising executives. The BBB of Metropolitan New York was founded in 1922 by the NY Stock Exchange. Today, 118 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than 3 million local and national businesses and charities. Please visit www.newyork.bbb.org or www.bbb.org for more information about BBB.