First I’d like to say that I promise I’m not a terrible person for doubting the “whole-hearted goodness” of cause marketing – you’ll see.

Renee gave me a project where I had to research how much profit companies make by engaging in charitable partnerships. What I found in addition to the profitability it brings to companies was the ugly underbelly of these “charitable” partnerships. While there are a lot of partnerships out there that truly donate a significant amount of profit to their cause and do so truthfully, I’ve come to find that not all companies partnering with charities are genuine do-gooders.

The goal of cause marketing is to lure consumers into making purchases that make them feel good about themselves and the products they’re buying that promote a cause. These promotions are much more about increasing profits than generating significant funds for charities. Certainly, cause-related shopping promotions can be an effective way to increase short-term sales, and more sales equal more donation dollars. However, charities would get more donation money if you just went to the charity’s website and made even a minimal $2 contribution. Retailers and manufacturers know at the outset of the program that they won’t have to “donate” in the large majority of cases. They exploit this knowledge for their own gain.

Some companies aren’t disclosing exactly how much they’re donating, how the donations occur, or what the cause is, a lot of times because the donation amount is so minimal or there isn’t a charity at all. They’re also unintentionally dissuading people from donating to charities directly, which would have a greater impact on the charity. Multiple studies have shown that consumers consistently overestimate how much of the amount they spend on a product goes to charity. Since companies aren’t required to be transparent about how much they donate and how much they profit, it’s hard to tell where all the money goes. Ethos Water declared in 2010 that they would donate $10 million to safe water projects. Two years after this goal was establishes, one Ethos spokesperson merely states that they have raised over $6 million, which is the same amount they had raised by 2008. Another says they raised $7.2 million. Another said $6 million. Another said they had in fact raised $10 million but donated only $7.2 million of it. Pact, a hip San Francisco underwear company, states  “For every pair of Pact you buy, we pay it forward by making a positive impact on our world.” When asked exactly how much goes to these undisclosed charities, co-founder Jeff Denby merely states that the donation is “significant.” Whats scary, is just because a company states that they are giving to a charity doesn’t mean they do so. It’s always a good idea to check the charity’s web site and make sure the company is a partner and be careful not to buy products that state or imply that a charity will benefit from a consumer sale or transaction rather than clearly disclose how the charity benefits from the sale of products or services.

The disconnect nowadays between companies and their causes are continually growing. Take KFC’s partnership with Susan G. Komen for example. The “Colonel of obesity” paired with cancer research is not a viable match and in turn taints the image of both parties. Or Yoplait’s “Save Lids to Save Lives” campaign where $.10 from each lid donated to goes to Susan G. Komen. Sounds like a good idea, right? What if you knew that you had to mail in the lids back to Yoplait in order for them to make the donation? Or if you knew that Yoplait yogurt was made from milk from cows that are treated with rBGH, a growth hormone that has been proven to cause breast cancer in women? In regards to the Yoplait partnership, Consumer Digest states, “Companies bank on consumer laziness, and they’re all too happy to present an image of doing it for you—and make a nice profit in the process—by generating a cause-related marketing campaign.”

Campbell Soup runs a high-profile campaign with pink ribbons on the labels of two popular soups—tomato and chicken noodle—as well as two other products the company owns—V8 vegetable juice and Swanson chicken broth. Contrary to what several other publications have indicated, purchasing one of these products doesn’t trigger a donation. Instead, Campbell applies the label to those products during October as a way to promote National Breast Cancer Awareness Month and realizes a potential $7.5 million increase in sales through the pink-ribbon campaign.

I have one more example and then I’m done ranting –

Frito-Lay had a partnership with Destination Joy, a Make a Wish program. It required customers to buy a specially marked bag then enter the 10 digit UPC code on the company’s website. Once this is entered, $.25 is donated. But, they committed to a minimum donation of $300,000 and a cap of $345,000. In other words, if more than 1.38 million people go out of their way to do this it will be for naught.

That was long…props to you if you read the whole thing.

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