A new study has just been published that provides evidence that cause marketing results in lower charitable giving and lower happiness. Lucy Bernholz has long discussed the problems with “embedded giving” – consumer transactions which conflate purchases and charity in various ways – but this is the first study I’ve seen to demonstrate the danger.
The study, by Aradhna Krishna, a marketing professor at the University of Michigan, shows that people give less to charity subsequent to buying cause marketing products. The study notes that some cause marketing products cost more than a traditional product and so the purchaser is incurring a financial cost that they may feel offsets charitable giving. However, the study goes on to show that even costless cause marketing product purchases result in lower charitable giving.
In addition, the paper shows that making cause marketing purchases reduces happiness. Charitable giving makes people happy, especially altruistic giving (as opposed to egoistic giving, in which the donor is primarily seeking benefit for themselves). The purchase of cause marketing goods is a type of egoistic “giving”, which replaces more altruistic giving as well as reducing total giving.
However, while the potential danger of the cause marketing concept is demonstrated well and the gut instinct of people like Lucy Bernholz and other anti-embedded giving advocates is shown to be valid, the study is far from conclusive. As the author readily points out, the results are drawn from a pilot field study and two laboratory studies that were very small in scale. Additional research is certainly needed.
The author also suggests some interesting ideas for follow up studies such as: What would result in greater happiness: giving to a charity related to a personal cause or being more selfless and giving to a charity unrelated to a personal cause? Buying a product one likes or doing a selfless act by purchasing a less preferred product because it is cause marking related? To what extent do other various forms of giving effect subsequent giving?
My big take away from the study is that it demonstrates well the idea that celebrating all efforts at doing good can be dangerous and it is important that we focus more on results rather than efforts.
Thanks for shining a light on this paper! I have suspected that cause related marketing is probably a zero sum game for some time now. I have been taken to task on more than one occasion for expressing this heretical viewpoint. It comes as no surprise that treating a product purchase as a surrogate charitable activity isn’t as satisfying or productive as the real thing. Hopefully this modest beginning will generate more scrutiny of CM.
I always appreciate your balanced approach, Sean. You always do a good job of seeing both sides.
I make three points in my own post on the Michigan Study.
First, there’s a lot of evidence to support that people are actually quite happy and more generous after support a cause via a cause marketing promotion. According to a 2010 Cone Study that involved a larger sample than the Michigan study, 86% of Americans say purchasing a cause-related product did not replace their traditional donation(s) to their favorite charity.
Second, the study points out that consumers are often unclear of how much of their money is going where. This is a problem. Fortunately, transparency is getting better with cause marketing and mobile giving, location-based services and QR codes promise a new level of openness and accountability.
Finally, the study’s lead researcher warns causes to be wary of unscrupulous companies. Always good advice, but you need to understand how purchase-triggered cause marketing–the ONLY type of cause marketing examined in the study–works. Companies are working with causes to help and to earn favorability, not damage their reputations. You can’t steal a halo. Also, the type of cause marketing the study examined is generally used by larger causes that know how to work with companies and protect their interests. Smaller companies and causes prefer direct donation programs like point-of-sale.
The overriding theme of the study is that selfishness in philanthropy is harmful. I’m not sure that’s completely true as there are many non-altruistic reasons for giving. A little selfishness might just be good for the greater good.
Good post Joe. I think the most important critique of the study is that it is based on a very small sample size and only one flavor of cause marketing. The author highlights this fact in the study as I did in the post.
While I certainly think there are positive aspects to cause marketing, it seems to me that most of your post rests on the idea that cause marketing is good because consumers like it, companies like it and charities say that it helps them. However, it may still be that cause marketing reduces charitable giving and happiness. People may be unaware that they end up giving less to charity if they buy a lot of cause marketing related products and they may be unaware that this makes them less happy (people tend to be very bad at predicting what will make them happy).
I think more study is definitely needed. The current study just raises some very important questions that need further study.
I realize it’s just one study, but Cone’s study from last year showed that 86% of respondents said that cause marketing didn’t impact traditional donations.
The proof is really in the nonprofits that rely so heavily on cause marketing (Komen, Product Red, St. Jude, etc.). Would these charities really engage in cause marketing if it was that risky, that detrimental to their brands and other types of fundraising, like major gifts?
That facts are in: causes that engage in cause marketing are more successful causes. I realize this doesn’t prove that donors are happy with cause marketing, but it doesn’t seem to point to a lot of unhappiness either.
But couldn’t it be that Komen or one of the others are being rewarded for their efforts, but donations to other groups are going down? The study doesn’t offer enough to draw any strong conclusions. But given concerns about “embedded giving” the study certainly adds to the idea that cause marketing should be studied closely. At the very least, it may simply be that designing cause marketing in different ways changes the behavior of donor-consumers.
I’m certainly not against cause marketing, because anything that helps is good. But I agree: people have an innate need to contribute. When you wipe away all the BS and all the noise in the world, I believe people are inherently good and want to help others do more, be more, live better.
To that end, I think the best way to get people to give is to leverage all the design, copywriting, communications and emotional impact tools of the professional community. Create campaigns that have the same quality as commercial work but are designed for charities.
The professional community is great at pushing people’s emotional buttons. It’s what we do, what we’re good at. Look at charity: water. Their stuff is terrific.
I’m reminded of the Red Cross freakonomics example, where adding a cash incentive to donate blood actual brought about a REDUCTION in the amount of blood given. Seems it took away from the altruistic vibe.
Isn’t the real question: Do nonprofits get more money overall from cause marketing and donations or from donations alone? It’s the total that counts. And I think you’ll find that those studies are flawed in the same way that many studies are flawed. Using college students — who have very different priorities from working adults with responsibilities — as the test group automatically slants the results.
I agree that the study is preliminary and did note that in my post. I do think that the “real question” is what approaches result in the maximum total resources and/or the maximum total blend of social and financial value. The happiness of the donor/consumer is also relevant.
My point in highlighting this was along the same lines of my post today. The intentions of cause marketing are not enough, the results are key, so it is important we note any ways in which cause marketing create negative results. The lower donations might be offset by corporate giving. But if cause marketing is in fact reducing donations, we should look into this dynamic deeply.
I believe cause marketing has a halo effect and ultimately allows more recognition by consumers of non-profits for future giving… more on this: http://mlcwideangle.exbdblogs.com/2011/04/07/cause-marketing-a-second-look/