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Behind the Scenes

When Charity Begins at Retail

Where Do Your Purchase Donations Really Go?

Products or promotions that trigger a donation after a purchase sound like an easy way for you to help your favorite cause. But in many cases, making a cause-related purchase helps the companies that sell the products much more than it helps the charitable organizations that are supposed to benefit from these campaigns.

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Kristi Conn, a fundraiser for cancer-related causes, lost her teenage niece to leukemia last year. So, it’s understandable that she has a special desire to help fund research in any way that she can. Her way of helping includes buying groceries and other products that trigger a donation, because they are aligned with a specific cause—cans of soup with the iconic pink ribbon promoting breast-cancer awareness, for example.

“I buy just about anything with a pink ribbon on it. My pantry is stocked with stuff,” Conn says. “If it has a cancer donation attached to it, I’ll buy it.”

It’s understandable to think any contribution—no matter how small—is helpful. That’s what makes the concept of cause-related purchases—whether they’re linked to a disease, such as cancer or AIDS, or tied to something as practical as a college fund—so appealing. You make a purchase, the cause or charity affiliated with the product gets some money and everyone benefits, right?

But in many cases, it’s not that simple. Exactly how much money these cause-related organizations or funds really get from the well-intended purchases you make isn’t always clear.

To be sure, there are many legitimate promotions in the marketplace that benefit causes. And if you were going to buy a certain product anyway, there’s no harm in picking one that also triggers a donation. But many stores and companies are making extra profit by selling cause-related products that you wouldn’t necessarily buy otherwise, while the cause itself gets little money in comparison. In many cases, we think you (and the cause) would be better off if you were to make a direct contribution, because the organization you want to help would get more money than the pennies it gets from something you otherwise wouldn’t have bought.

PROFIT AND PROCEEDS. Shoppers generally are unfamiliar with how much a cause campaign can increase sales and profits for a company, according to the marketing firm Cone, which specializes in cause marketing. According to IEG, a sponsorship advisory company, businesses spent $1.34 billion on cause-marketing campaigns in 2007, and that number is expected to increase to $1.5 billion in 2008. What’s unclear is how much of that money represents actual donations and how much of that money is spent on creating and maintaining the actual marketing programs aimed at generating donations. This increase in cause-marketing expenditures by companies comes at a time when there are 1.8 million charities fighting for funds, so it’s obviously not difficult for companies to find a willing charity partner.

In several instances, we found that sales increase dramatically when companies tie the sale of a product to a corresponding donation. Products featured in Dove’s “Real Beauty” campaign, where donations are made to the Dove Self-esteem Fund, showed a sales increase of 600 percent 2 months after the campaign started, according to Cone. The campaign began in 2004 and funnels money to “self-esteem” programs for young women. For example, Dove created a booklet called “Uniquely Me” and works with Girl Scouts of America on delivering that curriculum. Unfortunately, Dove does not disclose how much money it gives to programs in the United States through its self-esteem fund.

Aldo Shoes’ “Empowerment Tag” promotion doubled the sales of shoes, according to Cone, though neither Cone nor Aldo provide any context for that claim, such as when sales actually doubled. The promotion asked shoppers to purchase a $5 tag in addition to the shoe purchase, with 100 percent of the proceeds going to Youth Aids, a worldwide campaign that gives to charities that focus on children with AIDS. Aldo since has switched to selling $5 bracelets instead of tags.

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