Charity Commercial Benefit

Part
01
of one
Part
01

Benefits of Companies Partnering With Charities

Companies that support charities receive many commercial benefits including improved brand reputation, increased customer loyalty, tax breaks, strong community relationships, and more awareness among potential customers on social media. Other potential benefits include a faster growth rate, a stronger growth rate, increased sales, and a larger customer base. Detailed statistics and findings are below.

GENERAL BENEFITS

  • Companies that partner with local charities create strong community bonds, which impacts public sentiment and loyalty.
  • This investment in community is often the key to "relationships with clients and local decision-makers."
  • Partnering with local charities also impacts future business opportunities, as Katie Coates, APR, author of "Vote Yes: The Public Hearing Plan for Developers," stated, "Should [companies] need support down the road, they will have the relationships already in place that will enable them to communicate effectively with decision makers."
  • John Crossman, CEO of commercial real estate developer Crossman & Company, who has been partnering with charities since 2004, stated, "Do it (give to charities) because you believe in it and assume no financial return. That said, you will get a return."
  • Charitable donations often qualify for tax benefits, which is another way that companies can benefit financially from supporting charities.

RETURN ON INVESTMENT

  • Companies that are purpose-driven have achieved a CAGR of 9.85% over five years "compared to just 2.4% for the whole S&P 500 Consumer Sector."
  • Robin Leigh, founder and CEO of the Certified Charitable Giving Alliance, indicates that companies can see a 10% to 35% growth in business because of their charitable giving.
  • In 2016, Unilever's Sustainable Living brands grew 50% faster than the rest of its business lines. Many of these brands partnered with charities to address social issues, including Dove, Vaseline, Hellmann's, Signal, and more.
  • According to findings from the 2018 Shelton Group's Brands & Stands report, social purpose is the "third most impactful thing a company could do to increase brand image" behind coming out with new or updated products and providing great customer service.
  • Based on data from the 2018 Porter Novelli/Cone Purpose Premium Index report, purpose accounts for 13% of a company's total reputation and what's more is that "purpose and reputation are intrinsically linked."
  • Companies with a higher purpose ranking on the 2018 Porter Novelli/Cone Purpose Premium Index will "reap greater benefit as consumers are more likely to favor that brand through trial, purchase and support of that company in their communities."
  • Moreover, American consumers are more interested in what purpose-driven companies have to say and are twice as likely to consume content on social media and through traditional channels from companies that have higher purpose rankings.
  • The top two companies that scored the highest the Purpose Premium Index also score the highest on the Reputation Index (Amazon and UPS). Four of the top 10 companies on the Purpose Premium Index also appeared on the top 10 Reputation Index list (Amazon, UPS, Colgate-Palmolive, and Alphabet).

CONSUMER SENTIMENT

  • When given two choices of companies that offer similar services, 70% of consumers stated that "personal relevance of cause" was the primary reason for selecting one company over the other.
  • Additionally, 76% of consumers believe it is acceptable for companies to make money and support causes at the same time.
  • According to the 2018 Edelman Earned Brand study, 50% of global consumers are "belief-driven buyers."
  • In the U.S., 59% of consumers are "belief-driven buyers," up from 47% in 2017.
  • The majority of consumers of all generations are "belief-driven buyers," with 68% of millennials, 67% of gen xers, and 56% of baby boomers identifying as such.
  • Likewise, the majority of all consumers at all income levels are considered "belief-driven buyers," with 62% of low-income, 62% of middle-income, and 69% of high-income consumers identifying as such.
  • In addition, 64% of consumers worldwide will "choose, switch, avoid, or boycott a brand based on its stand on societal issues."
  • Shelton Group's 2018 Brands & Stands report found that 64% of respondents who said it was "extremely important" for companies to take a stand on social issues are "very likely" to "purchase a product based on that commitment."
  • Moreover, 64% of consumers believe corporations should provide ongoing support for "issues that align with the types of products or services they offer." This is compared with 13% who said companies should support issues that are currently in the news.
  • After learning what a brand stands for or cause it supports, 34% of consumers felt better about the brand, with 16% saying it was because they found out the brand took a stand on an "issue that aligns with products and services they offer" and 13% saying it was because they found out they supported one of their favorite causes.
  • The 2018 Porter Novelli/Cone Purpose Premium shows that 73% of Americans prioritize companies that "give back to important causes."
  • An additional 68% of consumers want to share content about companies that are demonstrating social responsibility.
  • MWWPR's CorpSumers on the Rise report found that 90% of the respondents were more likely to try a company's product and 80% are willing to pay more for products from companies that "take a stand on societal and public policy matters."
  • Moreover, 43% of respondents wanted companies to take a stand on issues, even if it does not align with their personal point of view.
  • Nearly half (48%) of respondents indicated they had stayed a customer of a company despite being dissatisfied with a product or service because they "believed in the company's mission or values."
  • Similarly, 68% of respondents indicated they would abandon a brand entirely if their values were no longer aligned.

COMPANY PERCEPTION OF PARNTERING WITH A CHARITY

  • Based on a study conducted by New Philanthropy Capital, 91% of corporations say that "enhancing brand or corporate reputation" is the leading motivation for partnering with a charity.
  • In addition, 89% of corporations believe that such partnerships increase their ability to improve the community.

CONCLUSION

  • Most available statistics support the idea that companies that partner with charities receive benefits in the form of improved brand reputation and customer loyalty.
  • Some financial statistics show that purpose-driven companies grow faster and at a higher rate than those that are not purpose-driven.
  • Tax benefits offer even more incentives for companies to work with non-profits.
  • Belief-driven consumers are on the rise both globally and in the U.S., which means that companies that do not engage in some sort of purpose marketing will likely fall further behind competitors that do.

RESEARCH STRATEGY

To find data or statistics to support the idea that companies that support charities get some sort of commercial benefit, we began our research with official studies on corporate giving, cause-related marketing, and the link between purpose and brand reputation. We found numerous studies from NPC, Edelman, the Shelton Group, Porter Novelli Cone, NWW, and more. These provided hard statistics on the benefits related to customer loyalty and brand reputation, but most did not provide any statistics on increased sales or business. There were some numbers that tangentially addressed the financial benefits companies have received through partnerships with charities, but the reports indicated that financial return-on-investment for corporate giving is difficult to measure. There was some information on Unilever's own ROI, which we included, and an average growth rate for purpose-driven companies compared to those that are not purpose driven, which was the only real data we were able to unearth in terms of business growth.

Following the reports, we turned to business articles in publications such as Inc., NonProfit Source, Entrepreneur, BusinessNewsDaily, and more, but all we were able to find was references to the studies we had already found and anecdotal benefits to partnering with charities. We included some of these anecdotal benefits in the "General Benefits" section because they are important reasons why for-profit companies tend to want to partner with nonprofits even if there are no hard statistics to support them.

Finally, we attempted to locate case studies on corporations that have partnered with charities to see if we could find campaign results for individual companies that included hard data on financial or growth returns. There were numerous case studies available on corporate-charity partnerships, but none of them explained the hard benefits of these partnerships to the corporations. Only the benefits for the charities were given as a measure of success. The case studies also reiterated what we had already found in terms of brand recognition and customer loyalty as the main partnership benefits for corporations. Therefore, we included as many hard statistics on brand reputation and customer loyalty as possible and provided the minimal financial benefit statistics that are available. After synthesizing the data, we offered our conclusions as to the commercial benefits that companies receive when supporting charities.
Sources
Sources