The State of Democratized Giving: How Cause Marketing Can Be Up For a Vote

This post originally appeared on the KULA Causes blog on 09/13/12.

“Do well while doing good.”

This inspiring quote is commonly attributed to American founding father and Renaissance man Benjamin Franklin, a wealthy entrepreneur whose penchant for frugality, industry and civic responsibility would leave him out of place in many of today’s corporate glass-and-steel fortresses.

Many, but not all. 

Why? Over the last few years, thanks in part to burgeoning technology, Ben Franklin-style democracy is no longer relegated just to political parties and four-year election cycles. To a very real extent, the term “democracy” can now be applied to cause marketing itself.

Especially when it comes to the “civic responsibility” mentioned above, today’s corporations, along with the consumers who patronize their businesses, appreciate the need to give back—and they’re giving back in very new and innovative ways.

The democratization of cause-related marketing means that, rather than the heads of corporations controlling the type of causes that their customers donate to, those customers now have a real, unmatched, and democratic say in the types of causes that they can to donate to within a company’s corporate philanthropy program.

Consumers Have Choice

Today, consumers select the causes. And they advocate not only for causes, but for brands, too. Like the thousands who tweeted their approval or disapproval of recent RNC and DNC political speeches, cause-related marketing has become a real-time, interactive experience. And that experience benefits both consumers (through heightened engagement and the feeling of doing good by giving back to their favorite cause) and corporations (via insight into customer behavior and values)—not to mention the nonprofits they both support.

Just in the last few years, campaigns like Kohl’s Cares and the Pepsi Refresh Project—an initiative to award $20 million in grants to whomever came up with inspiring solutions to help advance ones’ community, state and nation, and the ability to channel those funds directly to the organizations that could implement those ideas—are just the beginning of this new, two-way giving conversation. The National Philanthropic Trust reported that in 2011, there was a 20% increase in contributions to consumer-advised fund programs, illustrating that this type of “democratized giving” is really catching on.

Doing Well by Doing Good

Consider Bruce Burtch, the architect of one of the first known “cause marketing” campaigns—a 1976 partnership between the Marriott hotel chain and the March of Dimes nonprofit—that yielded over 2 million visitors for Marriott’s then-new Great America hotel and $2.5 million for March of Dimes’ mission of improved health for mothers and babies. As a historical footnote, Burtch has also been credited with coining the “do well while doing good” phrase. 

No matter who strung those five words together, the concept of reaping rewards by contributing in ways that have a positive social impact—be it through nonprofit partnerships, investment in microfinance institutions, or maintaining a portfolio of stock in companies that practice good corporate governance—is alive and well and stronger than ever—whether we’re talking about corporate giving, or today’s newer, technology-dependent and more democratized approach.

The ROI of Corporate Philanthropy

But when you consider that close to $16 billion in loyalty points and rewards go unredeemed—and basically wasted—every year, you wonder why more companies aren’t offering their consumers the choice to do some good in the world by channeling those unused rewards to charity. After all, by doing good, companies can generate greater brand awareness and increase ROI from their corporate philanthropy.

Speaking of democratized giving, we’re also creating a new way for companies to do well while doing goodthrough our Cause-Related Loyalty Marketing platform (CLM) that helps brands engage with consumers through their cause-related affinities.

CLM links a brand’s customers to over 2.5 million causes in more than 50 countries around the world, allowing them to redeem their rewards, points and miles and convert them into donations to their favorite causes. Our SaaS loyalty technology powers this online giving platform, which enables companies to engage with customers in a more meaningful way. By enabling “democratized giving,” we’re able to help companies calculate the ROI of their corporate philanthropy—showing them that doing good can be profitable—all while turning customers into brand advocates.

The State of the (Giving) Union

The bottom line is that democratized giving is putting the power of choice in the hands of consumers. Consumer-advised donations democratize philanthropy, aid the corporate-nonprofit relationship and make giving a whole lot more rewarding. They also simplify what can be an onerous donation process, both for consumers, who can help multiple non-profits through a single process, and for non-profits, which don’t have to worry about converting non-cash donations (such as unredeemed rewards and miles) into contributions.

Taken in whole (and in keeping with the democratic political spirit of this piece) the state of democratized giving in our Union is strong—and getting stronger. And best of all, unlike the upcoming presidential election, no one has to wait until November to show their support! 

This post originally appeared on the KULA Causes blog on 09/13/12.