Cause Marketing 101 (or how to avoid an Attorney General investigation)

Ricky Martin and Nicki Minaj promote Viva Glam, where every penny of sales goes to a global AIDS relief fund.

Congratulations! Your company is going to support a cause that’s important to your stakeholders by earmarking a portion of product sales to a charity. But be cautious- new legal guidelines are in place to protect customers, charities, and your company. Based on the popularity of the Pink Ribbon campaigns that raise funds for breast cancer research and awareness, New York State’s Attorney General has published Five Best Practices for Transparent Cause Marketing as a new standard, and to also discourage occasional unscrupulous behavior where companies dare to exploit charities for publicity and profit. As AG Eric Schneiderman says, the purpose of the rules are to “ensure that cause marketing campaigns provide the benefit that’s expected, and that consumers, charities, and above all, the women and families affected by this devastating disease are protected.”

Don’t think that because your business is based elsewhere that these best practices don’t apply to you. If you sell products to consumers in New York State, and promise to earmark a portion of those sales to a nonprofit, then this means you. Furthermore, this is the start of a trend that is beginning to expand across the country, again, intended to protect consumers and charities. Finally, it’s the right thing to do. Here are the New York guidelines:

Clearly Describe the Promotion
Before a consumer purchases any product, she should be able to understand how the cause marketing promotion works, from the name of the charity that will stand to receive money to the actual amount that will be donated to the length of the promotion.

Be Specific with Dollars

Too often companies use an ambiguous term like “a portion of the proceeds …” without being specific. The Attorney General says that’s wrong, as consumers can’t properly evaluate what they’ve been asked to contribute. Instead, if you are running a cause marketing program, be specific, such as MAC Cosmetics’Glam products where the company states “Every cent of the selling price of MAC Viva Glam lipstick and lipglass is donated to the MAC AIDS Fund,” with a link to the fund that shows exactly who receives the monies.

Transparency

Companies should disclose what might not be obvious to consumers, including if there are contractual limits on the campaigns, if charitable contributions will not be made in cash, or if a fixed amount has been promised to charity regardless of the number of products sold. By example, SMS Audio will donate the equivalent of 250 meals to Feeding America from the purchase of each headphone. The company notes the monetary equivalent of meals and minimum commitments on its website.

Ensure Transparency in Social Media

Companies conducting cause marketing through social media should be equally transparent as in traditional campaigns, and clearly and prominently disclose key terms in on-line marketing.

Tell the Public How Much Was Raised

At the conclusion of each campaign, the company should clearly disclose the amount of the charitable donation generated.

Common sense? Yes, but it’s surprising how few companies actually make these standards part of ordinary operating procedure. So whether you area business embarking on a cause marketing program, a charity seeking a corporate sponsor or a consumer, know your rights before moving ahead.

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christengraham

About christengraham

President of Giving Strong, Inc. Christen advises businesses, foundations and families for how to make a greater social impact.