Consumers Expect Companies to Keep Giving in Hard Times

October 07, 2008

Consumers Expect Companies to Keep Giving in Hard Times

As the economic crisis worsens, some charities are reporting that companies are curtailing their giving. But that could also make their products less appealing to customers, new research suggests.

A survey of more than 1,000 adults conducted by Cone, a Boston communications consulting company, found that even in a poor economy, consumers expect companies to support philanthropy. More than half said companies should maintain their levels of financial support for charitable causes, and 26 percent thought the companies should give even more.

Another preliminary study by Cone and Duke University’s Fuqua School of Business found that advertising promoting a product’s link to charity boost sales. More than 180 participants evaluated a magazine containing advertisements for four products—shampoo, toothpaste, potato chips, and light bulbs—and were then given money to purchase one product in each category at a convenience store containing 150 brand-name items. Each person saw ads that were traditional as well as those that advertised the manufacturer’s support for a particular charity.

Forty-seven percent of those who reviewed the advertisement linking the shampoo with a women’s health organization purchased that brand of shampoo, while only 27 percent of those who saw the traditional did. A similar effect was found for toothpaste.

However, the study showed only modest increases in sales for potato chips and light bulbs that promoted their association with a charity. Alison DaSilva, a Cone executive vice president, said the difference in sales may stem from a poor alignment between the cause and the product. For example, many participants, she said, were skeptical of the snack food’s affiliation with a children’s health organization.

“It’s not just about picking a cause off the shelf and saying this is what we stand for,” said Ms. DaSilva. Marketers need to show a clear connection between an issue and a product. Companies, she said, should ask themselves, “What are we doing that is authentic, real, and relevant to connect with consumers on an emotional and practical level?”

Has your charity seen a drop in interest among corporate marketing departments as a result of the downturn? Share your experiences and tips for attracting corporate support.

— Paula Wasley

Comments

In my work with corporate clients, my observation is that contributions are skewing to nonprofits where the companies have executives involved on their nonprofit boards. But, importantly, the board members who are truly engaged are the ones who joined the nonprofit boards based on a thoughtful and thorough matching process, and with good board training and preparation. See more about this on my Fast Company blog

— Alice Korngold Oct 10, 11:02 PM #

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Consumers Expect Companies to Keep Giving in Hard Times

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