While CRM is an easy way for many of us to make a small contribution to a cause, does it mean it’s competing for an already scarce fundraising dollar?
The experts we spoke to said ‘no’. Michael Walsh, executive director of charity researcher Givewell, says he hasn’t seen any evidence to suggest this is the case. “I get annoyed when I hear the ‘everyone is chasing the same fundraising dollar’ argument because there’s no basis for it. All the studies into fundraising in the last 10 years have shown that giving in Australia is on the increase, including individual giving.”
Leonie Walton of the National Breast Cancer Foundation says CRM only forms part of the organisation’s overall fundraising strategy but that it’s helped capture a market that wouldn’t necessarily donate at all. “We’ve found that our pink products capture ‘non-donators’ as well as younger people who may not feel that they have enough money to make a traditional donation.”
How does the money reach the cause?
Most CRM partnerships have an agreement in place to support the charity, independent of how much money is raised through product sales. Savvy charities will set a minimum guaranteed amount before the promotion commences and once the sales go above that amount, any additional funds are contributed directly from the company. Not unlike a sponsorship, the financial commitment is usually in place before the specially branded products hit the shelves.
For The Smith Family, its CRM programs contribute directly to a project within the organisation. Paul Henderson says of the Colgate promotion, “It was very specific, it wasn’t just putting money into a general fund. It was about funding a specific program around oral hygiene.”
Hailey Cavill says she insists that companies she works with agree to a minimum contribution before embarking on a CRM exercise. “I’m not comfortable with charities handing their brand over without a guaranteed return. If a company thinks it can raise a million dollars, then it needs to commit to that million. I won’t facilitate a CRM agreement for anything under $100,000 a year — anything under suggests to me that the company isn’t serious.”
What CHOICE readers say
- “I tend to stick with the brands I know, but I'll support a product that’s associated with a charity I've had personal experience with. If I’m going to buy the product anyway I may as well choose the one that supports that charity.”
- “I feel more comfortable buying a product that meets my needs and separately supporting the charities I understand enough to give my support to.”
- “I'm not swayed, because price and the quality of the brand are more important. However, if I have a choice between two identical products, I’ll choose the product that supports the charity. It makes less sense to buy a product that supports a charity that has no inherent link to the product itself. I’m generally cynical of such marketing ploys.”
- “If it’s a product I normally purchase and a portion is going to a charity, it’s a bonus. However, I'm more likely to donate to a charity directly. I'm quite wary of how my charity dollars are spent and how much actually gets to the cause.”
Women on target
From jewellery to flowers and babywear to chocolate, it’s no coincidence that many products that donate to charity also appeal directly to women. CRM consultant Hailey Cavill says women are considered the ‘gatekeepers’ when it comes to shopping, choosing products for the whole family. As a result, many products and causes that work well in CRM are those that speak to women.
The latest research from the Eye on Australia 2008 by global marketing consultancy Grey Worldwide revealed the most powerful consumer in the Australian market today. Paul Gardener, Chairman of Grey Group Australia and New Zealand says it’s a “40-plus female who has reached her power summit through a combination of not just demographic weight but a growing proportion of earnings and, by inference, spending power.”