It’s tempting to buy something you neither want nor need just to benefit your favorite charity. But most consumers have only a vague understanding of how much the organization will get when they buy products that claim to benefit charitable organizations. It’s known as cause-related marketing–a partnership in which a charity and for-profit organization work together to promote a product or service for mutual benefit. It entices shoppers to make a purchase by promising a contribution to charity for each product sold.

Consumers will typically support a good cause. However, research from Boston-based Cone, a cause related marketing firm, shows they may have had enough.

Recent research shows 87 percent of Americans are likely to switch from one product to another, price and quality being equal, if the other product is associated with a good cause–a 31 percent jump since 1993. But only 30 percent of Americans told a family member or friend about a product or company after hearing about its commitment to social issues, a 30 percent decline from 2004. And only 36 percent of consumers purchased a product from a company during the past year after
hearing about its commitment to social issues. That’s a decline from 43 percent in 2004.

The BBB Wise Giving Alliance, a charity watchdog group, says the important thing is to find out how much of the purchase price goes to the charity in question. If you’re asked to buy one product over another because that action will assist a charity, you have every right to know what that assistance will be, it notes.

Usually, the charity gets less than 10 percent of the purchase price. But small change adds up: charities nationwide receive about $1 billion annually from cause-related marketing activities. The BBB Wise Giving Alliance has no objection to cause-related marketing. It just wants consumers to be adequately informed about the ways charities benefit, especially since details are often hard to find.”

Consumers tend to believe that much more is going to the charity than actually is, charity watchers say. Vague disclosures such as “a portion of proceeds” or “profits from the sale” are not enough to help consumers make informed decisions.

If you plan to purchase a product that advertises the sale will benefit a charity, ask for specifics. Find out whether the company plans to donate a percentage of the sale price or a specific dollar amount for each product sold. You have a right to answers.

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