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Are Those Companies’ Charitable Proceeds Actually Going to Charity?

While initially their goals might have been to prepare statements for annual reports about where all the company’s charitable donations were going, marketing departments recognized that they also had, so to speak, public relations gold in the form of charitable donations.

Seeing pink? It’s not just you, so don’t call your ophthalmologist. Check the calendar instead: it’s October, which means that cause marketing is going full blast on the gridiron, in the grocery stores and pretty much everywhere else you can imagine. Now that pink has become indelibly associated with breast cancer, every company wants to get in on the action when it comes to presenting itself as a responsible, generous member of the community, which means it’s pinkwashing time.

What exactly is cause marketing, where did it come from and is there a way we could use it for good? The tangled history of cause marketing is actually quite fascinating, and some of it may surprise you.

Prior to the late 20th century, corporations felt no particular obligation to their communities. While some provided benefits to workers as a matter of course or became involved in community projects, as a whole, the corporate world wasn’t exactly known for its philanthropy or responsibility.

That started to change in the 1980s, when consumers began putting pressure on companies large and small to give back to their communities and behave more ethically. That meant sourcing supplies with more care, minimizing pollution, getting involved with charitable causes and being directly involved in their communities, or facing tough consequences like shareholder activism, boycotts and more.

So companies started to change the way they did business. In 1975, corporations donated approximately $1 billion. 34 years later, that number had skyrocketed to $14.5 billion (still only 5% of total charitable giving). Some corporations took (and still do) a wide approach, giving to a broad range of organizations and causes. Others took on a “strategic” angle to corporate philanthropy, choosing to focus their funds and expertise on a narrower range of causes in order to give more: tech companies offering free equipment and training to schools, for example.

At the same time, though, a curious phenomenon began to emerge. As members of the public demanded more corporate philanthropy and accountability for it, marketing departments started to get more heavily involved. While initially their goals might have been to prepare statements for annual reports about where all the company’s charitable donations were going, marketing departments recognized that they also had, so to speak, public relations gold in the form of charitable donations.

Thus, cause marketing was born. Companies started manufacturing products with notes about their charitable giving, and also set about boldly linking charitable causes with their products. Breast cancer is one of the most obvious examples: consumers are encouraged to buy given products with promises that some proceeds go to breast cancer research and treatment, although they rarely stop to audit where that money is really going and how it’s being used.

Pink ribbons and decorations have become ubiquitous in October as companies essentially enter a battle of market positioning where what’s important is being known as charitable, and encouraging consumers to buy products through charitable branding — even if proceeds of sales don’t actually go to charity, or if those products actually cause cancer.

Breast cancer isn’t the only charity used for cause marketing, though; companies tend to prefer charities with a strong existing infrastructure (thus products co-branded with the American Heart Association, for example) or a simple charity appeal (offering to donate coats to homeless shelters for coats purchased in the winter months).

Corporate philanthropy can certainly help provide vital funding and support to charities, but cause marketing is much more complex. Fundamentally, it’s about moving more products off the shelves, not the accompanying charities, and it’s been furthered by consumer demands for more corporate responsibility. Consumers can help strike a balance by making sure they know where their money is going and how it will be used before they buy — and holding companies accountable when they abuse cause marketing. They can also challenge companies to put their money where their marketing department is, and actually support the causes they claim to be benefiting with the sales of their products.

Breast Cancer Action’s “Think Before You Pink” campaign targets cause marketing, exposing abuses while at the same time promoting real-world action people can take on breast cancer issues. As the campaign’s tagline suggests, sometimes it’s a good idea to put down the pink ribbon and call the local cancer resource center to see if they need in-kind donations, people who can keep patients company or help them with errands, or other assistance.

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