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Marketing Charity: What Really Makes A Sale

With the market as up and down as it is these days, my schedule has been just as much of a rollercoaster ride! I'm behind on responding to some of the interesting notes that have made their way into my retail detail inbox. So this Friday I decided to catch up!

Retail detail reader Mark Coleman raised a good question about cause-related marketing and the type of Super Saturday fundraiser events that I wrote about a few days ago. He wrote in "Occasionally you hear someone mention that charitable donations will fade if the Bush tax cuts are repealed, cap gains increases, or carried interest is taxed as ordinary income. Obviously, with more money going to the government instead of personal checking accounts, most people will have less to flip to their charity of choice. Should this scenario play out, would events like this become more common? Cause-related marketing aside, it seems like a viable way for company owners to continue supporting charities with pretax dollars."

Hmmm.. interesting question. I asked Sandra Minuitti at Charity Navigator (a watchdog for the financial efficiency of the not for profit world) whether tax rates or income levels influence charitable donations. She said that the health of the overall economy (employment, etc.) determines donation levels more than anything else. That said, it is my guess that most people who purchase products whose proceeds (or a portion of) go to charity do so because they want the item in the first place.

The philanthropic aspect of the purchase is what closes the deal in terms of executing the purchase. Anecdotally, Jewelry designer Joan Hornig says that she thinks primarily about design in order to build repeat customers for her philanthropic jewelry line (100% of proceeds go to charity.) She doesn't market the charitable aspect (in part because she doesn't have a marketing budget) but also because she finds that buyers are purchasing her products out of a primary desire to own the jewelry not necessarily just to be charitable: ww.joanhornig.com.

I should point out that Charity Navigator presents a skeptical view of cause-related marketing and products. They advise that the most efficient and effective way to make a philanthropic donation is to do so with a direct financial contribution NOT by purchasing a product whose proceeds or a portion of proceeds go to charity.

Still, their Web site advises that if you are passionate about your purchases making a philanthropic impact then you should try to discern "if the charity is receiving a percentage of the profits or set monetary gift regardless of the level of sales." Of course, you can also check out just how well the charity will spend that donation by searching Charity Navigator's database of not-for-profit financials.

Of course, the value in the corporate world is that borrowing a charity's image by partnering with one helps a company improve their own image. FYI--Bluefly's Head of Communications Monica Halpert tells me that the leftover SuperSaturday items will hit the Web siteby tomorrow at the latest. All proceeds will go to the Ovarian Cancer Research Fund.

Questions? Comments? retaildetail@cnbc.com

Retail

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