Magazine article The CPA Journal

Cause Marketing: Opportunities for Assisting Exempt Organizations and Sponsors

Magazine article The CPA Journal

Cause Marketing: Opportunities for Assisting Exempt Organizations and Sponsors

Article excerpt

Cause marketing is the fastest-growing segment in advertising. Also known as strategic philanthropy, cause marketing is defined as "the process of formulating and implementing marketing activities that are characterized by contributing a specific amount to a designated nonprofit effort that in turn causes customers to engage in revenue-providing exchanges! For example, when the Field Museum of Chicago bid for Sue, the Tyrannosaurus rex fossil sold at auction in 1995, the museum secured the $8.3 million from the McDonald's Corporation and Walt Disney Company. Among other benefits to the companies, the McDonald's name would appear on the museum's new fossil lab, while Disney would display a copy of Sue in its parks. The cause-marketing strategy enables companies to justify their donations, especially during recessionary times, when there are fewer resources and greater need.

There are many other examples of corporations following a philosophy of "doing well while doing good." ADT, a manufacturer of alarm systems, gives away personal-security devices to battered women; Kimberly -Clark is building playgrounds in poor neighborhoods; Barnes & Noble sponsors poets and writers organizations as well as First Book, a charity devoted to improving children's literacy; Ramada Inns sponsors Childreach, an international humanitarian organization that has helped raise the living standards for millions of children since 1937.

In addition to helping to differentiate products in a competitive marketplace, cause marketing has other benefits to both nonprofit organizations and the corporations that sponsor them:

* Cost-effective advertising

* Improved business relationships and customer perceptions

* Merchandising opportunities

* Ability to demonstrate product attributes at sponsorship events.

Accountant's Role

Due to limited organizational infrastructure, many charities find themselves ill-equipped to deal with fundraising through corporate sponsorships. Accountants may be able to help nonprofit directors develop plans for solicitation of corporate sponsors and provide advice on many financial matters such as fund management, tax compliance, and financial reporting.

There are many good reasons for accountants to consider the opportunities presented by providing assistance with cause marketing. First, helping a nonprofit raise money for its cause helps to ensure the continued vitality of the nonprofit. …

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