Ten Tips To A Mutually-Beneficial Cause Marketing Program

Author: Geri Stengel

Cause-related sponsorship is a strategic positioning and marketing tool that links a company or brand to a relevant social cause or issue for mutual benefit. According to the International Events Group (IEG), spending on cause marketing has grown from virtually nothing in 1983 to an estimated $1.55 billion in 2009.
Nonprofits benefit from cause marketing because they get needed financial help, technical assistance and volunteers, among other things. For corporations, supporting a cause can influence consumer buying behavior and loyalty and is a way to differentiate a company or a brand by taking on a social issue.
1) Assess Your Readiness: Determine if you are business-friendly. The cultures of nonprofits and corporations are vastly different. To prepare your organization to work with corporations, you may need to add business people to your Board, invest in training for staff or create procedures for fast-tracking decisions.
2) Understand Your Value Proposition: Determine which assets/capabilities that may be of value to corporations:
• having an excellent reputation and powerful mission, so that the corporation enhances its creditability by virtue of affiliation
• providing recognition, endorsements or awards
• gaining access to prospective customers of the company
• having access to programs, projects and organizational expertise
• distributing products, such as books or pamphlets for use as incentives or giveaways
3) Know How and Why a Corporation Chooses a Cause: Consider what types of companies would be most likely to benefit from associations with your organization and respond to your value proposition. Corporations seek to address an issue that will be of particular concern to their core constituency. The more money a company ponies up, the more likely they will want a proprietary stake in their investment. Frequently, corporations seek visibility though the media, so the cause needs to address a newsworthy issue capable of generating adequate coverage. When dollars come from a marketing budget, as opposed to a public or community relation, it is likely that the corporation will want the cause to help them reach specific corporate objectives such as increasing brand loyalty or sales. Other benefits companies may seek include:
• Enhance corporate/brand reputation by positioning it as a responsible, caring company/brand
• Differentiate the corporation/brand
• Enhance employee recruitment and retention
• Expand opportunities for employees to practice leadership and management
• Increase access to markets
4) Pick a Partner Wisely: Does your mission match the goals of the corporation? The relationship must be mutually beneficial. Does the corporation have a solid reputation? The relationship must generate positive impact for you as well as them. Does the corporation have a tradition of philanthropy or is this their first initiative? Look beyond the obvious benefits of money, business expertise and volunteers. Corporations can often provide introductions to other businesses, marketing outreach and in-kind services (product, services, facilities, etc.) that are free or discounted. And of course, is the timing right? Acknowledge the importance of chemistry.
Do due diligence to find out about the corporation's goals and reputation. Review annual reports, financial statements and press clippings to ensure that the corporation is ethical and reputable.
5) Identify Critical Issues: Recognize that nonprofits tend to move slower, need to build consensus and are tighter with a dollar. Their bottom line is social return. Corporations want financial results. Meshing the two can be difficult.
6) Manage the Relationship and Expectations: Nonprofits and corporations have different cultures and don't always "speak the same language." Respect each other's culture. Listening to each other, having an open and honest exchange of ideas and expectations and continually updating each other is critical. Explore what the relationship will look like, how it will run and what results it will produce. It is important to educate corporate partners that it is not always about driving sales in the short term – it is about building relationships for the long term. Get support from senior management on both sides.
7) Develop a Game Plan: Determine the scope of the relationship (paid, in-kind, volunteers, marketing outreach, introductions, etc.) and develop costs, timelines, roles and responsibilities.
8) Measure Results: Jointly establish objectives. Measure performance against those objectives by determining the performance metrics that will help the corporation demonstrate success and encourage continued commitment.
9) Develop Marketing Materials: Cover the topics of how you do business, who supports you, how you are governed and the results you've achieved. Be informative but don't overload the client with details about your organization. Invite potential partners to see you in action.
10) Get a Referral: Having the door opened for you will save time and energy. Scour your networks to identify people who can introduce you to targeted companies. Your network includes your Board, staff, friends, friends of friends and volunteers. Do cold calling as a last resort.

Article Source: http://www.articlesbase.com/non-profit-organizations-articles/ten-tips-to-a-mutuallybeneficial-cause-marketing-program-1997938.html

About the AuthorGeri Stengel is founder of Ventureneer.com, an online education and peer support service which provides nonprofit and small business advice via blogs, virtual classes, and web events.

Two Great Cause Events for Businesses and Consumers to Join This Week

A year ago, in March, I wrote about two great events that businesses and consumers could participate in to help support worthwhile causes: Water Week and Tap Project and Earth Hour. Once again, Unicef is hosting the Tap Project where thousands of restaurants across the country will participate during World Water Week 2010 (March 21-27).

There is still time to get your restaurant involved and register where customers of participating restaurants can donate $1 for the glass of tap water they would normally receive for free—which will go towards UNICEF providing water and sanitation to kids around the world. Customers need to log onto the Tap Project website and type in their zip code to find the nearest participating restaurant. In my area, Zao Noodle Bar in Palo Alto, is the closest.

This year, the Earth Hour event has really grown with large companies like Coca Cola, Ikea and hundreds of others supporting the event. Telstra International has made a huge donation to the WWF Earth Hour 2010 campaign. WWF has a list of suggestions for how your business can participate. Last year I mentioned that Zara, the Spanish international clothing store chain, supported Earth Hour. They have continued their support posting the "60 joins Earth Hour" badge.

These causes are so easy for any business to support-I suspect that next March I will be reporting on more and more businesses that have chosen to participate.

Getting a High Five For Giving

The other week I went to my local Whole Foods Store and at checkout was asked whether I would like to contribute a dollar to "Empower Women Through Credit". There in front of me was a flier with a picture of a woman named Gloria, that explained the story of her business and how with a micro loan from Grameen America, in partnership with the Whole Planet Foundation, was able to start a successful flower stall business in Queens, New York. With this assistance she is now planning to expand into a flower shop.

When I agreed to add the $1.00 to my bill, the employee at the cash register gave me a big high five. I was wowed by this guy's enthusiasm over a mere dollar and wondered what it takes for a business to motivate the employees to care so much and in turn to inspire the customers to give.

I give Whole Foods "high fives" for using these five important strategies to successfully to build their philanthropic program that serve as examples for other businesses to follow.

1. Have a clearly defined structure within the organization, which could be as formal as a foundation, a department, or just a team -whose purpose it is to develop the organization's philanthropic plan.
2. Develop a vision, strategy, and some good ingenuity for executing the vision that aligns with the main purpose of the business.
3. Educate your customers. Provide them with information about the philanthropic programs they will be helping support. Give the cause a real face, like Gloria's.
4. Engage the customers. Ask them to help support your cause by donation. Encourage their giving with matching programs, discounts, or rewards.
5. Involve and inspire the employees. They are your best fundraisers and their enthusiasm will infect the customers with a desire and willingness to help.

Mostly, a “high five” attitude may be the most powerful tool any organization can have to help support worthwhile causes, such as ones that go towards Gloria's flower business and the many other micro entrepreneurs that Whole Foods and Grameen Bank help support.

The Fourth Sector

In this era of recession and pricey bank bailouts, much of the public feels a creeping sense of unease about the role of corporate business in America. But for Mike Hannigan, founder of Give Something Back Business Products, there’s cause for hope.

Hannigan’s company, co-founded with partner Sean Marx two decades ago, donates the majority of its profits to local charities. As a result, the Berkeley-educated Hannigan has begun to chart a promising new path for corporate leaders. With Marx holding the reins of the company’s day-to-day operations, Hannigan has taken his insights to the road as speaker, lecturer and mentor for a new generation of business leaders. The best part, too, is that his message portends a new, robust arena of corporate giving within the business sector.

Be sure to check parts one, two and three of our interview. They lay the groundwork for this fourth and final installment of the conversation, in which Hannigan shares his fascinating vision for the future.

Q: What do you see as the future of the company? And do you see other companies following your lead?

MH: In the seventies, when I was in college as a student activist, there was a whole group of student activists like me. We were everywhere back then in the early-seventies. But I didn’t know a single one of my peer group that said, okay, I’m going to be an activist for the rest of my life, and I’m going to use business as my tool to reach those goals.

Business was not presented as a tool for somebody who was focused on producing social benefit. Business is now seen as a pathway to do something good for the world. You can’t go to a major business program at a college today and not find a huge chapter of people who are there because they want to integrate business with some corporate social responsibility. So it’s very mainstream. Every curriculum in the business schools has a significant element of responsibility as far as the core curriculum.

That didn’t happen fifteen years ago. There’s this whole network of national organizations that are similar to [how] the chambers of commerce supports the regular business community: Social Venture Network, Investor Circle, Business for Social Responsibility, B-Corp. There’s hundreds of these national and local organizations which are clearinghouses for business people, people who use the tool of business but have social responsibility as a core organizing element.

So in the past fifteen years especially I think we are kind of on the threshold of this fourth sector of the economy. There’s the non-profit sector, which is about a hundred years-old. You got the government sector. You got the for-profit sector. Now you’ve got this whole kind of consolidation of what’s called almost a fourth sector of the economy.

You’ve got billions of dollars now in investment capital coming to fund investment in businesses like this. You’ve got lots of successful models: Give Something Back, Newman’s Own, Patagonia, Ethos Water, Method, Seventh Generation. Hundreds of companies now that are organized specifically by people who see business as a tool to accomplish viable social benefit.

So I think fifty years from now we’ll look back at the early twenty-first century and say, oh, that’s where the fourth sector of the economy started off. Because the business community and the government community and the non-profit community are not really up to the task of figuring out a way to distribute the unbelievable wealth this country has.

That’s what we’re a part of is that whole kind of movement to create the institutions that will facilitate the workings of the market on behalf of the community as a whole, and let consumers play their role in doing it. I’m very optimistic about where we are in terms of creating this longstanding institution. I think twenty years from now, people will look at companies like Give Something Back and there will be thousands of them.

Q: I grew up in Northern California, and I can totally see the Berkeley influence in what you’re saying. It’s really cool.

MH: I totally agree with you there, but I tell ya, I will have a conversation with someone in St. Louis and it’s basically totally consistent with those bedrock, middle-American values. Anybody would support the idea of the marketplace. We’re not arguing for the elimination of our competitors. What we’re trying to do is create an alternate strategy that consumers and citizens can pursue to their benefit, both commercially and environmentally, and in other social ways.

So we’re not saying let’s eliminate the exploitative business world. We’re saying let’s transform the business world in a way that considers the power of the community as stakeholder to create a better world. And you know, there’s not a lot of people that can find fault with that.

We’re a market-based organization. Our goal is to go out and aggressively compete our competitors whenever we can. In an ethical way. And the beneficiary of that is everyone, not just a few people that happen to own stock in the company.

The Perception Game

Like any hard-charging corporate leader, Mike Hannigan has profits on the mind. Nearly two decades ago, Hannigan, alongside longtime business partner Sean Marx, founded Give Something Back Business Products, a Northern California-based office supply company. Since then, they’ve won press, plaudits, and yes, plenty of profits.

What sets GSB apart, though, is where they direct those profits. Unlike most companies, Give Something Back Business Products devotes the majority of their earnings straight into the coffers of local charities. As Hannigan explained during the first part of our exclusive four-part interview, Give Something Back Business Products utilizes a thoroughly unconventional business model. So unconventional, in fact, that it occasionally leaves peers in the business world scratching their heads.

In part two of our conversation, Mike describes his efforts to maneuver the prickly game of perception as he forges a bridge between the worlds of business and philanthropy.

Q: In those early days of starting the company - you and your co-founder Sean Marx in the early and mid-nineties, when you were first starting up - were there a lot of people who kind of just laughed you out of the room?

MIKE HANNIGAN: There still are.

Q: Really?

MH: I mean, we still have problems. One year – I think it might be our third year - when we first got onto the Inc. Magazine 500 Fastest Growing Companies List, we were also the award winner for the worst corporate name. Because the Inc. people couldn’t figure out Give Something Back. That’s not a business. That’s like a non-profit. That doesn’t say anything about selling office products.

So we constantly have to overcome this perception that we’re asking customers to make a financial sacrifice in order for just a social benefit. I mean, every company gives its profits away. Every company. They give it away in dividends to the stockholders for appreciation of the stock. No company sticks the profit in a mattress somewhere. Eventually it gets distributed to the owners as appreciation or dividends. So that’s an argument we have to make to the consumer.

The consumer, though, they don’t have the option of spending more. If we can get in the door and we can say, well, okay, so what’s important to you? And they’ll say, well, I need to have competitive prices. So we’ll say, let’s see what you got. And then they compare with what we have and they say, you guys are cheaper, or the same.

Also a significant portion of our business comes from winning closed competitive bids where the winner is not even known until the envelope is opened in public and the lowest bidder is determined. Closed, competitive bids. Everyone submits their prices, and the buying company opens the packets and the lowest price wins the deal. We win more than our share of those.

But you’re absolutely right. Initially, the perception of a competitive business could survive in our marketplace and give its profits away was a counter-intuitive proposition, but I think in the past ten or fifteen years, that’s less and less so. It’s still a hurdle we have to overcome, but once we overcome it, there’s a stickiness to our customers that I think most of our competitors don’t have. Once they actually see that, oh geez, they got this box of pens for a buck sixty-nine. They used to pay a buck seventy-nine. Then you’ve got a customer for life.

The concept of the community as stakeholder is a novel one, to be sure, and Hannigan is relentless in educating the public about his endeavor. But how does Give Something Back Business Products allocate the generous funds it donates to charities each year? Tomorrow, in part three of our conversation, Hannigan reveals the mechanics of his company’s giving.

Common Cause for the Community

Mike Hannigan believes communities know best how to solve their own problems. He just wants to help supply the resources. That’s why Give Something Back Business Products, the office supply company Hannigan co-founded in 1991, donates the lion’s share of its profits to local charity groups.

As their website shows, the company has donated to a staggering roster of local organizations. The graphic below, charting their year-by-year donations, illustrates the reach of their giving.

In parts one and two of my interview with Hannigan, he described the development of his business model. Today he cuts to the crux of how Give Something Back Business Products selects recipient charities.

Q: Can you describe what you call the “democratic ballot process” by which you choose organizations to which to donate?

MIKE HANNIGAN: The community is served by thousands and thousands of non-profit organizations that are addressing thousands and thousands of different issues. And everyone has a different sense of what’s important in their community. So our goal is not to have the rich and the powerful decide what the community’s needs are. Our goal is to reach as deeply into the grassroots of the community that we serve and ask them, what are the most important issues? And what are the organizations that are doing the best work?

So the way we do that is, first of all, we poll our customers. We’ve got about four or five thousand business customers. Some of those customers have one employee; some of those customers have 10,000 employees. So our goal is to have every customer poll their employees to dig as deeply into the communities of those customers and filter the information up to us. An organization has got to be a 501c3 and it’s got to have a local impact. But beyond that, we solicit organizations for qualifications, and then we distribute the funding according to the votes cast by our employees and our customers in the geographical areas that we serve.

So just to give you an example: 15% of our business right now comes out of our Sacramento regional office, so 15% of our profits are going to be donated to Sacramento-based organizations selected for us by Sacramento-area customers and employees.

So that way, we feel like the true needs of the community – to the extent that they’re recognized by the people who live and work in those communities – are reflected by the donations that we make as a company.

So I don’t have any more influence myself than you would if you were a customer. Frankly, that’s the way it should be. Because I have no more insight into what’s happening in your community than you have into mine.

So in Sacramento, if 10% of the votes come back and they’re for the Sacramento Women’s Cancer Resource Center, 10% of the money that’s associated with that ballot is going to be given to the Women’s Cancer Resource Center.

Think about any corporation. When they make policy decisions or operational decisions, they make them in the context of who their central stakeholders are. Our stakeholder is essentially the community. The community is served by our success.

Hannigan's system is impressive, but what's the sum effect of all these donations? Tomorrow, in the final installment of our conversation, Hannigan describes how the success of Give Something Back Business Products has nourished his ambitious vision for the future of America’s business sector.

Business Outside the Box: Mike Hannigan and the Evolving Landscape of Community-Based Philanthropy

Mike Hannigan didn’t set out to change the world, just his community. In the process, though, he has reconceived the dynamic role of philanthropy in the bare-knuckled world of corporate sales.

In 1991, Hannigan and his business partner, Sean Marx, together founded Give Something Back Business Products, an Oakland-based independent office supply company with a unique catch: GSB donates more than half its annual profits to a wide array of community-based charitable organizations.

At first, the concept sounded outlandish to many in the business world, but Give Something Back Business Products rose to become the most successful such company in the western Unites States, and perhaps more impressively, a noted, award-winning trailblazer in the world of corporate giving. Hannigan himself, still president of the company he co-founded, has become a sought-after speaker, lecturer and expert on subjects of philanthropy, sustainability and social responsibility.

Hannigan recently took a little time out of his busy schedule to chat with Business That Cares. All this week, I’ll be profiling Hannigan and Give Something Back Business Products in a four-part exclusive interview. Today we begin with the inception of the company and the nuts and bolts of its unique model:

Q: First of all, thank you so much for taking the time for this.

MIKE HANNIGAN: Oh, no problem. I’ll pander to the press anytime.

Q: Can you start by telling me about your background before starting the company?

MH: Well, I went to college in the early-seventies as a science student. While I was in college I became involved, like so many students back then, in community service social activism. So during my college career, I developed this kind of commitment to spending a certain amount of my time doing community service. When I graduated from college, I went to graduate school at Berkeley, and then took a job at the Xerox Corporation. And I began this period of time where I had these twin careers. On the one hand, I was making a living in the office products business, achieving various levels of responsibility, and learning more and more stuff about big companies, small companies, startups, mature multinationals, etc. And after hours, I would do my community service work.

And then about 1991, my business partner, Sean Marx, and I decided we wanted to leave the corporate world and do community work, but we didn’t want to make the financial sacrifices people do when they transition into the non-profit world. So we became aware — I became aware, in particular - of the Newman’s Own business model. You know, Newman’s Own spaghetti sauce and popcorn and salad dressing. It was a good choice for the consumer without any kind of financial sacrifice, and there was a big sticker on it that said, “All profits from the sale of this product are donated to charities.” So that showed me that as a consumer, I could make a choice without any kind of sacrifice – financial, or any other quality sacrifices – and achieve this other goal that I would like to achieve, which is to direct some resources back to community service non-profit work.

Hannigan and partner Sean Marx with actor and philanthropist Paul Newman.

So at that point I realized we could do this. We could introduce this same business model, a customer-focused business model, around the office products industry that we were expert in, but do it on behalf of a stakeholder which is the non-profit community, rather than an individual private investor.

So in 1991, we pooled our resources. We had $40,000. And we started out of my house, selling office supplies. And twenty years later, we’re the biggest private office supply company in California. And it’s all based on the business model that business customers are shopping for office products - they want the great price; they want the great service. Whoever offers them that is going to make a profit. All we’ve done is we’ve redirected the profit. Not the payroll, or not the rent, or anything else. We’ve redirected the profit back into the community through our community donation program, which asks our customers and our employees to decide in their communities which are the organizations that are doing the best work and are most deserving. We use the power of the marketplace to take care of customers and earn profit, and then we direct that profit back into the community according to the democratic votes of the people who basically live and work in the community we have contact with.

So it’s a hard-nosed competitive business environment, and we don’t expect to win when we’re not the best choice for our customer, but whoever wins is going to make a profit. All we’ve done is redirected that profit back into the community. And it turns out, of course, that’s just an additional competitive advantage to many consumers. Because our consumers are businesses. They’re not individuals. Their job is to make a good deal for their company. They’re not able to make a sacrifice financially in order to do a social benefit, and so we don’t ask them to do that. What we’re doing is competing on behalf of a different stakeholder, which in our case is the community.

Q: And in a way, you guys are setting such a higher bar for yourself because in addition to being able to donate a large chunk of your profit, you also at the end of the day need to give people lower prices.

MH: Well, so does anyone who wants to win in the office products world. Staples has no problem giving good, low prices and making $1.6 billion in profits last year. We’re competing for those same customers. The customers are demanding the same things from us as they would from Staples, or Office Depot, or any of our competitors. All we’re doing is just we’ve eliminated the stockholder as stakeholder and substituted the community as stakeholder through our profit/distribution program. It’s all based on the power of the market to create wealth. We just distribute that wealth in a way that’s more consistent with most people’s views of how wealth might be distributed in a fairer world.

From its modest beginnings two decades ago in Hannigan’s living room, Give Something Back Business Products has gained incredible traction in the office supply business. Still, many initially viewed its profit-donation model with skepticism. In part two of our interview tomorrow, Hannigan reflects on his efforts to manage perceptions of his new business, and forge a success from his ambitious philanthropic model.

Making Business Philanthropy More Effective

It is hard to believe that a little over a year ago when a friend of mine sent me a link to the website of small restaurant operation in San Francisco, Mission Street Foods. Mission Street Foods began as a food truck and expanded into an operating restaurant twice a week, with all of the proceeds donated towards a designated charity. This happenstance inspired me to create Business That Cares and write my first blog post.

In addition, this past year, I finished the program and received my certificate in Positive Business and Society Change through Case Western University’s Weatherhead School of Management. Part of the program requirements were to submit three stories to the Center for BAWB, Business Agent of World Benefit, for their World Inquiry project, which I also posted on the blog: Replyforall, Better World Books, and GoodCapital. The World Inquiry into B·A·W·B, hosts a global dialogue through the highlighting and sharing of stories of successful business innovations that are making a positive impact on society and the environment on their Innovation Bank site.

As I have learned about hundreds of stories about business philanthropy and have passed on many of them through my blogging and twitter, I have seen the trend for businesses that care; businesses that are agents of positive change for the world, grow quite rapidly. As an example, Mission Street Food is planning to grow to a full time restaurant and is seeking socially minded investors to help them fulfill this vision. In spite of the fact that the economy has negatively impacted business philanthropy, newly socially minded models of business have emerged that help support a variety of important causes . Our goal has been to write stories about these new models for business, such as a B-Corp like Better World Books, a business founded with the purpose of donating a percentage to charity like glassybaby, collaborative businesses like Hotels That Help that involve their customers in donating to causes, or businesses like Blackbaud that were founded with emphasis of strong volunteer programs.

And looking ahead, it seems clear that looking at business philanthropy from an Organizational Behavior and Organizational Development perspective, can help businesses understand how it relates to the overall functioning of the business. Furthermore, a philanthropy program especially one that has an employee volunteer component will benefit from involving HR and OD departments as they can help with understanding and using the correct organizational management principles and tools that will improve the positive impact of the program.

These are some of the organizational topics as applied to business philanthropy that I plan to address in this blog this coming year: how to create the vision, designing innovative and effective programs, leadership development, applying best practices and processes from other business philanthropy examples,employee engagement and volunteering, tying corporate philanthropy with company strategy and direction, developing strategy for the business philanthropy program, group dynamics of team building, building collaboration and cooperation within the context of volunteering, assessing and measuring impact of company philanthropy on the community and on the business.

Business philanthropy seems to be considered as a adjunct activity for many businesses, as in "wouldn't it be nice if we could do something for....". This is to be commended. And now, it's time to start making it really effective.