Cause Marketing Halo Awards

This blog entry is the first of hopefully many entries regarding responsible business and how it relates to marketing. Cause Marketing Forum has opened the submission period for campaigns conducted in 2010. CSRwire.com describes it as "North America's highest cause marketing honor...[to] recognize nonprofit organizations, businesses and agencies for excellence in initiatives that do well by doing good."

According to the Cause Marketing Forum, "outstanding companies and causes will compete in the following categories:
    •    Best Transactional Campaign
    •    Best Message-Focused Campaign
    •    Best Health-Related Campaign
    •    Best Environmental or Animal Campaign
    •    Best Social Service or Education Campaign
    •    Best Digital Marketing Campaign
    •    Best Event Marketing Campaign
    •    Best Video Creative
    •    Best Print Creative"

A few noteworthy winners from last year include The Cheesecake Factory and Feeding America's Drive Out Hunger tour for Best Cause Event Marketing and SunChips for Best Online Video. The Cheesecake Factory partnered with Feeding America to do a 30 city tour in 30 days to raise awareness for domestic hunger and collect cans of soup-- over 300,000 cans. People who donated received a free slice of Cheesecake Factory cheesecake. Here is a video of the campaign:

SunChips, a division of FritoLay, debuted its commercial the eve before Earth Day during a broadcast of American Idol. This commercial showed the world's first fully compostable chip packaging. by showing "a bag disapear through time-lapse photography." Check it out:

Target

Target is a company that stands out in the way that it does business. Instead of relying on a Wal-Mart type strategy of always getting the lowest cost no matter what the consequences, Target has been able to do business in a way that allows it to give back. And when one looks at how much Target contributes, it is clear to see that this company deserves some recognition.

According to the Company Information section of Target's website, the community outreach efforts are divided into seven sections: reading & education, volunteerism, arts & culture, social services, crisis relief, grants, and military & veteran support.

Reading is a big focus for Target with their website saying: "Since 1962, Target has committed 5% of its income to support communities. Today, that totals more than $3 million in giving every week. We're excited to announce a new chapter of that commitment: our pledge of $500 million by the end of 2015 to support education and help kids learn to read. This will be the largest gift in our history, bringing our legacy of giving to education to $1 billion."

Five percent may not seem like all that much of a contribution but for a company the size of Target that adds up to a lot of money donated to worthy causes. Target also has a system set up where customers can do their part to help donate. Its called Take Charge of Education. By using their REDcards, Target customers can choose which schools they would like to receive donations and Target donates one percent of the customers' purchases to those schools. This giving opportunity was also highlighted by Global Learning Charter Public School.

All in all Target is a for profit company that has implemented some easy steps that are making a big impact on the communities that Target is a part of. The amount of money that has been given back is growing, just like the company itself.

Good for Society or Good for Business?

There seems to be two sides in choosing what is the priority that businesses should be after. There are those who see corporate social responsibility as important and there are others who see it as getting in the way of the bottom line. In a Management Report and Governance Report in 2007 Nestle claimed that it is vital  to "create value, not only for its shareholders but also for society." But there are also those like UC Berkley professor David Vogel who wrote in Forbes, "To assume that the business environment has fundamentally changed and that we are entering a new world in which CSR has become critical to the success of all or even most firms is misinformed."

So which is it? Or can it be both? Todd Thomas writes in Is Corporate Social Responsibility Good for Business? on Execdigital.com that choosing one of the other is the wrong approach. Thomas says that companies don't have to choose between return on investment or responsibility. He states, "if one assumes that business society and the greater society are intricately linked, and that the corporate world is looking for long-term success and brand enhancement, CSR is a competitive advantage."

One of the main strengths of CSR is its connection with innovation. Giving back and being innovative are what investors, consumers, and employees look for in a company and the two can go hand in hand. Partnering with other organizations, contributing a percentage of revenue, and developing employee volunteer activities are some of the innovative examples that Thomas gives as ways for a company to practice responsible business. In addition to making a positive impact on the community, these companies can make a positive impact on their own business. It can strengthen the bond employees have to the company, provide a differentiating factor between the company and its competitors, and provide beneficial public relations which can lead to future partnerships and increased sales.

Tough Times for Nonprofits

This recession is putting a strain on both ends of nonprofits these days. There are more people in need of the assistance offered but at the same time there are less resources to offer due to a decrease in government funding and individual donations. Shelly Banjo and S. Mitra Kalita wrote an article for the Wall Street Journal on this topic, saying that nonprofits "are undergoing a painful restructuring, including mergers, acquisitions, collaborations, cutbacks and closings."

Though donations had steadily been rising the last few decades, there has been a drop off in private donations as seen in the chart above. In 2008 private giving decreased by 6%, the most substantial decrease since USA Giving began tracking this information.

Though there are a lot of negative effects that are being compounded by tough economic times, there may be some positive outcomes to this situation. The reality of current circumstances has brought up the controversial issue of whether there are too many nonprofit organizations to effectively help people. Cutbacks have caused smaller organizations to merge together and in some cases it has allowed them to do things never before possible on their own. One such example is Big Brothers Big Sisters:

"The changes are not only making Big Brothers Big Sisters more efficient, but also attracting new donors, board members and participants. In the past three years, the organization has been able to double the number of children served in Chicago to 1,300 a year. In 2009, it expanded the board by six people and won a $346,000 grant from Atlantic Philanthropies to run mentoring programs for more than 300 new children. By running programs at other nonprofits or companies they partner with, the organization has generated $750,000 in new revenue."

TOM's Shoes

Though only founded in 2006, TOM's shoes probably won't be unheard of by anyone who might read this post. TOM's, which name comes from a hope for a better tomorrow, operates in a way they call One for One. For every pair of shoes someone buys, they donate a pair to child in need. Why shoes? As it says on Toms.com, "A leading cause of disease in developing countries is soil-transmitted diseases, which can penetrate the skin through bare feet. Wearing shoes can help prevent these diseases, and the long-term physical and cognitive harm they cause."

The business approach is simple yet brilliant. Appearing as a nonprofit company because of all the donating that TOM's does, it is in fact a for-profit company that makes money by selling its products. By doing so, TOM's doesn't have to rely on donations to keep providing children with shoes. This protects TOM's from the current dry spell in giving that nonprofits are going through in this recession. They can give away as many shoes as they can because of the sales revenue that keeps coming in.

ABC news did on a story on founder Blake Mycoskie and his company back in 2009 with an accompanying video that sums up this cause better than I can.

http://abcnews.go.com/video/playerIndex?id=8480316

Top Socially Responsible Companies

I thought that a list of companies that are accomplishing what I intend to write about would be a good way to start this blog. I recently read an article by Seth Fiegerman on Mainstreet.com entitled 10 Socially Responsible Companies that compiled a list based on charitable donations, environmentally friendly policies, and the fairness of hiring practices. The first three in the list have to do with donations to charity, the next three with hiring practices and the last three with environmental practices. There was also one wild card company who was not at the top of any of these three categories but instead had honorable mention in each. This list consisted of:

1. Abbott Laboratories
2. Tyson Foods
3. Pfizer
4. AT&T
5. Johnson & Johnson
6. Sodexo
7. Timberland
8. General Electric
9. Stonyfield
10. IBM

This list had some companies that I wouldn't have thought would make the cut and others that I had never heard of or had never considered belonging in this category.  They also ranged in industry and in ways of giving back but all are worth recognizing for their contributions to charity, progressive hiring practices, and environmental responsibility. The two that stand out the most to me are Pfizer and IBM, both of which I hadn't previously thought of as companies that give back. It is encouraging to see a company like Pfizer who is part of the very profitable pharmaceutical industry give so much money to charity. In 2009 it donated over $60 million which represents 24.2% of its total profits for the year. The second standout was the wild card for this list: IBM. Though this firm wasn't at the top of any of the three lists in ranked 2nd in green practices, 8th in diversity and donated almost $42 million in 2009.