Corporate Social Responsibility

Cause-Related Marketing and Strategic Philanthropy

The main similarity between cause-related marketing and strategic philanthropy is they both benefit the public and the organization through corporate social responsibility (CSR). According to Saraf, V., Singhai, S., & Payasi, S. (2012), CSR benefits the organization in two ways; “reducing the negative effects…caused by the processes and product usage”, and “increasing the positive contributions” from within the organization. Rick and Williams, (2005) describe philanthropy as historically being an individual’s contributions to society rather than an organization. Companies primarily practiced cause-related marketing prior to the 1950’s. Since then companies have realized there are great benefits to involving others within the organization with their CSR activities.

According to Ferrell, O. Thorne, D. & Ferrell, L (2010), cause-related marketing and strategic philanthropy can be compared utilizing 5 different categories: focus, goals, time frame, organizational members involved, and cost. (p. 350).  Cause-related marketing generally involves one product, for example, MacDonald’s donating ten cents for every happy meal purchased; this primarily involves the marketing department. The main benefit to this approach is the advertising and increase in sales as consumers see a portion of their money going to a good cause. Strategic philanthropy is an organization-wide effort which involves the financial support and/or employee volunteer time. Employees tend to be involved and help out the cause, for example, Wal-Mart associates raising funds for the IWK which is then matched by Wal-Mart home office. As Rick and Williams reason “a company cannot survive in a sick community; therefore, companies that spend a portion of their resources to address social problems are helping secure their own long-term survival” (as cited in Spence & Thomson, 2009, p. 372). Both cause-related marketing and strategic philanthropy provide an organization with the CSR society demands of them.

References

Brill, B. (2009), Tis the season for strategic corporate philanthropy. Crain's Chicago Business,      32(50), 14.  

Ferrell, O. Thorne, D. & Ferrell, L (2010), Social Responsibility and Business, Chapter 9, pg. 350

Ricks, J. & Williams, J. (2005), Strategic corporate philanthropy: addressing the frontline talent needs through an educational giving program. Journal of Business Ethics, 60:2,   147–157

Saraf, V., Singhai, S. &  Payasi, S. (2012). Corporate Social Responsibility: Building Brand and Linking Corporate Strategy with Philanthropy. BVIMR Management Edge, 5(2), 88- 97.

Spence, C. & Thomson, I. (2009), Resonance tropes in corporate philanthropy discourse.          Business Ethics: A European Review, 18(4), 372-388. doi:10.1111/j.1467- 8608.2009.01570.x