Definition: Cause-related marketing1
Cause-related marketing (sometimes called social marketing) is a venture with a non-charitable partner to promote the sale of items or services on the basis that a portion of the revenues will be directed to a charity or charities.
Why is it important for charities and nonprofits that have entered into a cause-related marketing agreement to disclose in all related materials how the organization benefits from the sale of products or services and the amounts payable under the arrangement? Cause related marketing can benefit both businesses and charities, helping businesses to establish trust with their customers by associating their brands with social responsibility while creating revenue for a charity or cause.2 Increasingly, the media and the general public are critical of for-profit companies that raise funds for charities and nonprofits, arguing that too much money goes to the business and not enough to the cause itself.
Being transparent about the details of cause-related marketing agreements can help nonprofits and charities avoid accusations of unethical dealings with businesses that assist them to raise funds. An essential component of transparency is being clear with customers about what social benefit an individual’s purchase of a product or service actually accrues.2 Being upfront about how third-party organizations benefit from the sale of products or services and the minimum or maximum amounts payable helps the public understand the social benefit of their purchase.
From "Accreditation Preparation Workbook Section C: Fundraising," Katharine Zywert, Social Prosperity Wood Buffalo at the University of Waterloo, 2013.
- “Standards Program Definitions,” Imagine Canada, May 2011.
- “Cause Marketing: 10 Cautionary Principles for Nonprofits,” Gayle L. Gifford, Cause & Effect, Inc. 2008.
Standards Reference Guide