“Making the Case for Cause Marketing: Impact on the For-Profit and Nonprofit Communities”

Fall2016Authors

BridgetHartnett,CPA,PSARonMatan,CPA,CGMA,PSA

Synopsis

Thiswhitepaperdiscussesthevaluablerolethatcausemarketingcanplaywhencorporationsteamupwithnonprofitsto“dowellbydoinggood.”

CERTIFIEDPUBLICACCOUNTANTS&ADVISORS

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 2

TableofContents

1. What’sCauseMarketingandWhereareitsRoots?

2. DoesCauseMarketingWork–andHowDoWeKnow?

3. HowCanaSmalltoMid-sizeBusinessUtilizeCauseMarketingEffectively?

4. Conclusion

5. References,CitationsandResources

6. AbouttheAuthors

7. AboutSobel&Co.

Page 3 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

1. What’scausemarketingandwhereareitsroots?

Nonprofitshavemuchtogainbyunderstandingtheconceptofcausemarketing.Oncetheyrecognizethepotentialforpositivepublicityandfundraisingopportunities,theycan proactively begin a dialogue with their corporate supporters, asking them toconsiderusingcausemarketingasatoolforgeneratingbrandawarenessandprofits.Informednonprofitleadersarequicklyrecognizingthepowerofthistoolforallpartiesinvolved.

Solet’sbegintheconversation.Wehavebeenhearingalotabout“causemarketing”lately, but exactlywhat is it? Causemarketing ismost often defined as the actionthroughwhichacompanyandanonprofitorganization(oreducationalinstitutionorsimilarentity)marketsan image, aproduct, a serviceoramessage for themutualbenefitofbothparties.

Goingbeyondtheincreaseinrevenuethough,causemarketingisrapidlybecomingapowerfulwayforcorporationstosendamessagetotheirinternalemployeesandtheirexternalaudience.Incasetherewereanydoubtsoftheinfluenceofcausemarketing,EdelmanTrustBarometerreportsthat80%ofglobalconsumersagreethatbusinessmustplayaroleinaddressingsocietalissuesandsixintenAmericansstatetheywouldbuy first fromacompanythatbacksacausetheysupportaccording to“TheArtofCauseMarketing.”Isanyfurtheraffirmationnecessarywhenconsideringtheinfluenceofcausemarketingtoday?

Butthisconceptisnotreallynew.Infact,thewholeideaisnowmorethan40yearsold!Forthoseofyouwhoarehistorybuffs,thefirstknowncaseofcausemarketinginthe United States is most often traced to March, 1974 when Carr & AssociatesInternationalwasformedbyJohnT.Carrasawayof"givingback"tothenonprofitcommunity.WhatCarrinitiatedwasanovelsuggestionthatwouldconnectcharitablecauses and corporate organizations in order for them to support each other. Johnsoughtoutthosebusinessesthatwouldnormallyoffercashincentivesforreferralsandasked them to redirect those funds, donating them to the charitable cause of thebuyer'schoice.Thiswouldgenerateadditionalrevenueforthecause,makethebuyerfeel generous, and would build great publicity for the corporate business at noadditionalcosttothembecausetheywerepayingreferralfeesanyway.

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 4

Abouttwoyearslaterthefirstreal“causemarketingcampaign”waslaunchedbyformingapartnershipbetweentheMarriottCorporationandtheMarchofDimes.Marriott'sobjectivewastogeneratehighlycost-effectivepublicrelationsandmedia coverage for the opening of their 200-acre family entertainmentcenterinSantaClara,CA.TheMarchofDimes'objectivewastogreatlyincreasefundraising while motivating the collection of pledges by the program’sdeadline.Thepromotionwasconductedsimultaneouslyin67citiesthroughoutthewesternUnitedStatesandresultedinraisinganunprecedented$2.4millionfortheMarchofDimeswhileprovidinghundredsofthousandsofdollarsinfreepublicityandstimulatinga2.2millionpersonattendancefortheopeningyearoftheMarriottentertainmentcomplex.Thisinitiativeproducedtheideal‘win-win’ situation that is at the core of cause marketing. Its incredible successeventually resulted in having Bruce Burtch,who conceived and directed theprogram,beinghailedasthefatherofcausemarketingbytheCauseMarketingForum,theindustry'sprimaryassociation.Burtchisalsocreditedwithcoiningtheimportantphrase,"Dowellbydoinggood”whichhasbecometherallyingcryforthesetypesofendeavors.

Page 5 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

2. Doescausemarketingwork-andhowdoweknow?

Toanswerthisquestion,herearesomefactstoconsider. Inthemostsimplecausemarketing relationship, a for-profit company may announce that it will donate aportionof eachpurchasemadeby customers during a specific periodof time to anonprofitorganizationinordertobenefitaspecificcauseorissue.Theadvantagesforbothpartnersareclear.

Firstofall,thefor-profitentityelevatesitsreputationwithcustomers–increasingthevalueofitsbrandandexpandingitsmarketshare-whileatthesametimeencouragingthemtospendmore,thusraisingprofitsandimpactingthebottomlinealongwiththecompany’sreputation.Inaddition,italsogeneratesgoodwillinternallybymotivatingemployeesandencouragingtheirinvolvementtoo.

Foritspartofthebargain,thenonprofitcanenjoyboththebenefitsofanewrevenuestreamwithouthavingtoinvestsignificanteffort,aswellasthespreadofawarenessfortheirmissionandthepossibilityofbuildingnewrelationshipswithfuturedonorsandsupportersthatcanpaydividendsformanyyearstocomebeyondthelifetimeofthecampaign.

Theanswertothequery“doesitwork?”isdemonstratedinthemetricswhichhighlightsignificantfinancialrewards.In2002whenJoeMarconipublishedhispaperoncausemarketing he reported thatNorthAmerican companieswere spendingmore than$630milliononsponsorships,afigurewhichrepresentedamorethan500%increaseover1990spendingandthe figureshaverisenconsiderablyover thedecadessincethen.Butthatwas14yearsago.AccordingtotheCauseMarketingForummorethan$2.00billionisestimatedtohavebeenspentin2016,aprojectedincreaseof3.7%over2015.Ontheinternalsideofthings,93%ofemployeessurveyedbytheCauseMarketingForumsaytheywanttoworkforacompanythatcaresaboutthemasanindividualand51%take itastepfurther,declaringtheywon’tworkforacompanythatdoesn’thavestrongsocialandenvironmentalcommitments.74%saytheirjobismore fulfillingwhen they are provided opportunities tomake a positive impact atwork.Thefactsspeakforthemselves.

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 6

3. Howcanasmalltomid-sizecompanyusecausemarketingeffectively?

Cause marketing is not an insignificant promotional practice, one to beconsideredasacasual ‘gooddeed’usedtoelevatea localpresence.AsTheRoper Organization summed it up, “American consumers and employeesconsistentlysupportcauserelatedactivities.”

Intheearlyyearswhencausemarketingwasevolvingasanimportantbusinessprinciple,itwasobviousthattherewouldbeadirectpositiveimpactoninternaland external branding and on profits – facts that larger companies couldcapitalizeon.

But today, cause marketing has trickled down as a corporate practiceconducted by any company of any size. The key to success is the genuineconcernonthepartoftheforprofitorganization.However,iftheownersorseniorleadersareattemptingtoinfluencecustomers’loyaltyandwalletshareby opening their checkbooks, the campaign will most likely fail. So beforedecidingtointegrateacause-focusedmarketingcomponentintoyourbusinessplan,conductathoughtprovoking,contemplativeconversationthatincludesareviewofyourculture,commitment,financialresources,levelsofmanagementandemployeededicationandastatementofspecificgoals.

Start the process with the assumption the company wants to behave in asociallyresponsibleway.Includeemployeesinsomebrainstorming–perhapsthroughsmallfocusgroupsorevenatafullstaffmeeting.Listencarefullytothefeedbackandutilizetheirinsightsasyoumoveforward.Withoutasincereexchangeandawillingnessfromtheleadershiptorespondtotheemployees’comments,thecampaignmaynevergainthenecessarymomentum.

Onceyouhavetheinternalsupportyouneed,youcanidentifyanappropriatecharitable cause to support. Thismaybe alignedwith yourown industry (asmalllocalgrocermayteamupwiththearea’sfoodbank,aclothingretailermay work with the neighborhood chapter of Dress for Success or an autodealershipmayprovidecarsforreturningveterans)oryoumayidentifyacausethat reflects common concerns (hunger, cancer research, batteredwomen,abusedchildren,cleanwater,animalshelters)andendorseit.

Page 7 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

Thenextphaseinvolvesmeetingwiththenonprofitorganizationandworkingtogethertoformulateaplanthatwilladdresseveryone’sobjectives.Itisatthisstagewhereanycorporation’s insinceritywill becomeobvious. It needs tobe stressed and stressedagainthatanythinglessthana100%desiretobehaveinasociallyresponsiblemannerforthegoodofthecommunitywill turnapositiveexperience intoatoxiconeveryquickly.

As you work together with the selected organization, talk about hosting jointprograms, engaging yourworkforce as volunteers, establishing a financial goal andlinkingthetwopartners(for-profit/nonprofit)inameaningfulandprofoundway.Thebrandequityofboththefor-profitcompanyandnonprofitorganizationisatstakesoitisimportanttobeonthesamepageateverystageofthecampaign.

InarecentHarvardBusinessReviewcasestudyoncausemarketing,theauthor,JoePanepintoputsforthsomestrategiesthathebelievesarecentraltoasuccessfulcausemarketingpromotionregardlessofthesizeofthepartnersinvolved.

Hereareafewofhissuggestions:

• Sendasimpleandinspiringmessaging• Utilizestrongvisualstorytelling• Focusonabigissuebutmakearequestforasmallpersonalactionthat

caninvolveanyoneandeveryone

PanepintogoesontonotethatoneofthebestcurrentexamplesistheALSIceBucketChallenge, which raised more than $115 million for ALS research and dominatedFacebooknewsfeeds formonths.Thenowwidely-knowngoalwastogetpeopletodumpabucketoficewaterovertheirheads,recordit,andchallengeuptothreeoftheirfriendstodothesametoraiseawareness.Raisingfundswasthenexttinystep,made much more likely once people were engaged in the cause. Most othercampaignscalledforadigitalpledgeorcommitment.

Whilefewcouldhavepredictedthesuccessofthisviralcampaign,yourorganizationcanhaveexcellentresultsaswell–evenifnotquitesooverwhelming!

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 8

Mostoften,acampaignimposesatimelimitbutoccasionallythecommitmentisseenasalongtermalliance.Thisisadecisionforyoutomakeinconjunctionwiththecharityyouaresupporting.Oncethedetermination onduration ismade, you can move forward with your promotional activities. These mayinclude,butarenotlimitedto,postinginterestingwebsitecontent,leveragingprintandvideointerviewswiththeleadersandclientsofthenonprofit,instoresignage, press releases, use of social media such as Twitter, LinkedIn andFacebook to announce the campaign and track its success, email alerts anddirectmailcommunication.

When the cause marketing campaign has ended (for those with finiteparameters),youandthenonprofitshouldhaveastrategicexit-meetingwhereyou have the chance to openly discuss what wentwell andwhat could beimprovedonforfutureendeavors.Transparencyisacrucialpartofanyformulaforsuccesssobecandidwitheachother.Thelessonslearnedwillbeworthit.

Page 9 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

4. Conclusions

Sowhat’sthelessonhereforentrepreneursandmiddlemarketbusinessownerswhowanttocreateacausecampaignthatwillhavethepositiveimpacttheyseek?

• Have a strategy that will enable your company to create a public service

engagement,notapublicserviceannouncement.Thismeansyoureallyneedtobeearnestandhearfeltinyourcommitment. Talktoemployees, vendorsandcustomersaswellasotherstakeholdersaboutthecampaignbeforeitislaunchedtoensuresupportateverylevel.

• Selectanorganizationthathassimilarvaluesasyours;itisessentialthatyouare

proudyouareconnectedandthatyoucantrusteachother.

• Haveastructuredpurposefulplantopromotethecampaigntoengageyourtargetaudience’ssupport.

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 10

5. Citations

Ifyouhaveanyquestionsabouthowyoucanincorporatecausemarketingintoyourtraditionalmarketingcommunicationsstrategy,pleasecallusorfeelfreetoinvestigatesomeoftheseresourceslistedbelow.

• CauseMarketingForum,StatisticsEveryCauseMarketerShouldKnowhttp://www.causemarketingforum.com/site/c.bkLUKcOTLkK4E/b.6448131/k.262B/Statistics_Every_Cause_Marketer_Should_Know.htm

• CauseMarketing:Wikipedia.en.wikipedia.org/wiki/Cause_marketing

• HarvardBusinessReview.TheElementsofanEffectiveCauseMarketing

CampaignbyJoePanepinto.February19,2016.https://hbr.org/2016/02/the-elements-of-an-effective-cause-marketing-campaign

• CauseMarketing.Chapter6:TheCauseMarketingCasebook.JoeMarconi.2002.

• GoodWorks!MarketingandCorporateInitiativesthatBuildaBetter

WorldandtheBottomLine.PhilipKotler,DavidHessekiel,NancyLee.2012.(ChapteronCausePromotion:PersuadingConsumerstoJoinYourCompanyinaGoodCause.)

• TheTorontoStar.October16,2011.PhilanthropyandMarketing.Aradhna

Krishna.

Page 11 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

6. AboutTheAuthorsBridgetHartnett,CPA,PSA.MemberinCharge,NonprofitandSocialServicesPractice

BridgetHartnett,CPA,aMemberoftheFirmatSobel&Co.,isalsoamemberof theNJSCPA. Bridget hasmore than fifteen years of experience in publicaccounting,whichshedrawsontoprovidehighlevelservicesforclients.

ExperienceintheNonprofitNicheBridget spendsmostofher timeworking closelywith clients in the social services andnonprofitareas,includingeducationalinstitutions.Asthememberinchargeofthefirm’sNonprofit and Social Services Practice, Bridget supervises the audit engagementsconductedby Sobel&Co. for the Cerebral PalsyAssociation ofMiddlesex County, theYouthDevelopmentClinicofNewarkandCatholicCharitiesoftheTrenton,MetuchenandNewarkdioceses,FreedomHouse,andC.J.Foundation.Inaddition,shehandlesallofthefirm’s education audits and holds a Public School Auditor’s license. Bridget is alsoresponsibleforreviewingandoverseeingthepreparationofnonprofittaxreturns.

PhilanthropicandSocialServiceCommitmentBridgetcarrieshercommitmenttosocialservicesbeyondtheworkplacetoincludeherpersonalinvolvementinseveralareas.Bridgetcarrieshercommitmenttosocialservicesbeyondtheworkplacetoincludeherpersonalinvolvementinseveralareas,suchas:Best50WomeninBusiness2016,NJBIZ40under40,NJBIZSt.Benedict'sschoolinHolmdelwheresheisalwaysavailableforvolunteeringforprojectsandspecialeventsNewJerseyChapterofMake-A-WishAvolunteerwithprofessionalbusinessgroupsintheNewJerseycommunity,includingMonmouthOceanCountyNonprofitCommitteeWesternMonmouthChamberofCommercewhereshehasservedasTreasurerandhelpedtofoundboththeYoungProfessionals’GroupandtheNonprofitCommittee

ProfessionalCredentials

• MemberAmericanInstituteofCertifiedPublicAccountants(AICPA)• PublicSchoolAccountant• MemberofNewJerseySocietyofCertifiedPublicAccountants(NJSCPA)• MemberofthePFKNonprofitCommunityofPractice• ActivememberoftheNewJerseyCPASociety’sNonprofitInterestGroup

EducationalBackgroundBridgetgraduatedwithherBachelorofSciencedegreefromMontclairStateUniversity.

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 12

RonMatan,CPA,CGMA MemberintheNonprofitandSocialServicesPractice

Ron Matan, a Member of the Firm, brings a unique blend of publicaccountingandbusiness acumen toeverynonprofit engagement.A keymemberofSobel&Co.’sLeadershipTeamsincejoiningthefirmin1997,Ronworksprimarilywithnon-profitorganizations,includingUnitedStates

Department of Housing and Urban Development (“HUD”) projects, A-133engagements,andlowincomehousingtaxcreditprograms(“LIHTC”).

ExperienceintheNonprofitNicheAsaseniormemberofthefirm’sNonprofitandSocialServicesPractices(UniformGrantGuidance,HUDauditsandLIHTCprograms),Ronisresponsibleforthefirm-widequalityofthispracticeareaandisthefirmliaisonfortheAICPA’sGovernment(Nonprofit) AuditQuality Center.With over 40 years of experience in public andprivate industry and accounting experiencewith all types of nonprofit and socialserviceorganizations,Ronbringsauniqueblendofknowledgeandinsighttothesespecializedengagements.RonisaCertifiedTaxCreditComplianceProfessionalandislistedintheGuidewhichiscirculatedtoallStateAgenciesAllocatingTaxCreditsas well as the Internal Revenue Service. He has also taken courses in advancedtrainingforpeerreviewsandperformspeerreviewsofotheraccountingfirms.

PhilanthropicandSocialServiceCommitment

• AppointedtotheUnionCountyEducationalServicesFoundationBoard• ServesontheauditcommitteeofFarmersvilleParent-TeacherAssociation• ServesontheBoardofthePomfretClub• Appointed to theBoardof Life Pathwhoprovideshousing, programsand

servicestoindividualsofallageswithdevelopmentaldisabilitiesthroughoutLehighValleyandsoutheasternPennsylvania

• FormertreasurerandboardmemberofKidsPeaceTreatmentCentersforemotionallydisturbedchildren,locatedinBethlehem,Pennsylvania

ProfessionalCredentials

• CertifiedPublicAccountantlicensedtopracticeinNewJersey,NewYorkandPennsylvania

• PublicSchoolAccountant• MemberoftheAmericanInstituteofCertifiedPublicAccountants• MemberofNewJerseySocietyofCertifiedPublicAccountants(NJSCPA)• EarnedtheCharteredGlobalManagementAccountantdesignation,adding

valuebyhelpingnonprofitleadersunderstandincomeandcosts,andriskandopportunities,focusingonanorganization'sfutureprospectsaswellaspastperformance

Page 13 Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities

• HasaNewJerseyPublicSchoolAccountant's(PSA)license• MemberofAllinialGlobal'sNorthAmerica'sNonprofitCommittee• AppointedtotheNewJerseySocietyofCertifiedPublicAccountantsPeer

ReviewExecutiveCommittee• MemberoftheNJSCPA’sNonprofitInterestGroup• InstructoratFairleighDickinsonUniversity'sCenterforExcellence-Certificate

inNonprofitBoardLeadershipProgram• InstructoratSetonHallUniversity’sNonprofitCertificationProgram• CertifiedTaxCreditComplianceProfessional• ListedintheGuidewhichiscirculatedtoallStateAgenciesAllocatingTax

CreditsaswellastheInternalRevenueService• Hastakencoursesinadvancedtrainingforpeerreviewsandperformspeer

reviewsofotheraccountingfirms• CharteredGlobalManagementAccountant

EducationalBackgroundRonisagraduateofKingsCollegeinWilkes-Barre,Pennsylvania,wherehereceivedaBachelorofScienceDegreeinAccounting.

Making the Case for Cause Marketing: Impact on the For Profit and Nonprofit Communities Page 14

7. AboutSobel&Co.,LLC

Sobel&Co.isaregionalaccountingandconsultingfirmlocatedinLivingston,NewJerseythathasbeenprovidingnonprofitandsocialserviceorganizationsintheNewJersey/NewYorkmetropolitanareawithaudit,accounting,taxandadvisoryservicessinceitsinceptionin1956.

Thefirmisdistinctiveinitsapproachtothenonprofitcommunitybecauseofitssincerepassionforservingthissector.AsitsaysontheSobel&Co.website,“Weworkwiththenonprofitsectorbecausewefeelgoodhelpingthosewhodogood;wehaveapassionforhelpingnonprofitorganizationsachievetheirmissionofhelpingtheworld'smostvulnerable.”

The firm currently works with more than 250 nonprofit organizations withrevenuesrangingfrom$100,000toover$75,000,000.Basedonthisdepthofexperience,theprofessionals inthenonprofitgrouparekeenlyfamiliarwiththeissuesfacingnonprofitsandtheywillapplythisknowledgetobringaddedvaluetoeveryengagement.

As a further demonstration of the firm’s commitment to the nonprofitcommunity,severalcomplimentaryprogramsareofferedthroughouttheyear.These include quarterly webinars, roundtable discussions and an annualsymposiumontimelyandrelevanttopics.

Wealsoencourageyoutovisitourwebsiteatwww.sobel-cpa.comandclickontheNot-For-Profitnichepage.Oncetherepleasebrowseourresourcelibrarywhereyouwillfindpublishedwhitepapersalongwithavarietyofarticles.Weprovide a Desk Reference Manual for Nonprofits, a Survey of NonprofitOrganizationsthatcontainsinterestinginsightsonnonprofits,awiderangeoftoolsandbenchmarkingdata,amonthlye-mailnewsletterthatoffersrelevantinformation to organizations like yours and links to other key sites that arevaluableforthenonprofitcommunity.

CERTIFIEDPUBLICACCOUNTANTS&ADVISORS