The Role of Strategic
Philanthropy in Marketing
Strategy
Linda Ferrell
University of Northern Colorado
Debbie Thorne LeClair
Mississippi State University
Strategic Philanthropy
• The synergistic use of organizational core
competencies & resources to address key
stakeholders interests & to achieve both
organizational & social benefits
• -goes beyond traditional benevolent
philanthropy
• -involves financial & nonfinancial
contributions
In General,
Strategic Philanthropy is...
• “A blueprint for making thoughtful,
reasoned, informed, and meaningful
contributions to organizations that match
an individual’s interests & concerns.”
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homelessness
pollution & environmental issues
literacy & education
AIDs
• Source: Anne Marie Kemp (1999) “Innovation Important to the Future of
Philanthropy,” Rocky Mountain News, Feb. 5, pp. 63A.
General Benefits of Strategic
Philanthropy...
• more businesslike approach to
philanthropy
• produces a better organizational image
• increases employee loyalty
• improves customer relations
When Target Surveyed Employees
Involved in Volunteerism...
• 74% agreed or strongly agreed that
employee morale and commitment to the
company was strengthened
• in addition, they indicated that
experience brought new skills
to the company that significantly
enhanced Target’s image in the
community
Are good deeds & good business
mutually exclusive?
John Damonti, President Bristrol Myers Squibb Foundation
• “When you align your contributions with
your business focus, you then can draw
on the greater wealth of the corporation’s
people, information & resources.”
American Express...
• global financial & travel company
• contributed funds & know-how to institute
the development of the Academy of Travel &
Tourism in Hungary
• provided benefits to the Hungarian economy
• provided benefits to AMEX: understanding
of Hungarian market & enhanced employee
entrepreneurial skills
Timberland...
• offers free boots to “City Year” youth
activists
• supports youth development & from a
business point of view:
– “we want their hip, urban friends to want
them too”
Other Strategic Philanthropy
Programs...
• ADT Security company giving alarm
systems to battered women
• Kimberly-Clark building playgrounds in
poor neighborhoods
• Barnes & Noble promoting literacy
• Coca-Cola is supporting local Boys &
Girls Clubs
Cause Related Marketing vs.
Strategic Philanthropy
• tieing your product directly to an
organizational concern
• % of products sales are donated to a
cause appealing to a relevant target
market
– Avon-Breast Cancer Awareness
– % of sales of “Pink Ribbon” products
donated
– over $25 million raised
Corporate Contributions...
• donations to “cause programs” now
exceed $700 million annually
• What do stakeholders expect?
1999 Cone-Roper
Consumer Survey Results...
• 61% of American consumers think cause
related branding should be standard
business practice
• 80% have a more positive image of a
company who supports a cause
• 66% indicated they were more likely to
trust a company that is aligned with a
social cause
Con-Agra...
• major food producer
• supports “feeding children better”
• sets up Kid’s Cafes-after school kitchens
run by & for children
• meals meet or exceed USDA
requirements for nutrition
– yields good press, pleases employees, &
generates significant shareholder interest
Kraft Foods...
• sponsors “Feed-the-Hungry” Initiatives
• hoping to be positioned as a food
company that cares
How to chose a charitable
alliance...
• look beyond your headquarters &
current markets
• think beyond dollars: employee time,
products, services
• think long term: try to develop longer
term relationships with causes &
organizations
Three Categories of Socially
Responsible Companies...
• Open handlers-highest level of corporate
consciousness
• Ben & Jerry’s-go to great lengths to buy
from minority or disadvantaged suppliers
• Tom’s of Maine-toothpaste & personal
care products-shuts down his factories 4
times a yr. (costing $100,000 each time) to
allow his employees to attend meetings on
environmental & social issues
Three Categories of Socially
Responsible Companies...
• Practicing what they preach-companies
with a long term commitment to a cause
• McDonald’s Restaurants -Ronald
McDonald Children’s Charities
Three Categories of Socially
Responsible Companies...
• Image builders-pure cause-related
marketing
• represents the vast majority of companies
• adopting a cause to ‘brighten’ the
corporate image or generate sales
• State Farm Insurance- supports womens
sports events
Team Activity...
• Form teams of 3-4 and make up a
strategic philanthropy program for a
company that you have some knowledge
about:
– one you work for
– one you have interviewed with
– or, one you are very familiar with:
products, services, and culture