Cause Marketing: Increase Sales (and do a lot of good)
Beds at the adult homeless shelter.
by Renée Magriel Roberts
As the mortgage foreclosure crisis has been rippling throughout the United States with disastrous effect, our town (Harwich, located on Cape Cod in Massachusetts) has certainly not been immune. With a year-round population of only 12,700, there were over 300 foreclosures last year and even more in other Cape towns. A lot of commercial real estate seems available too. Some really great and not-so-great restaurants are history. And every time any kind of job opens up, everyone and their parents apply. This being said, in the heat of the economic crisis, our international bookselling and publishing business, conducted entirely on the internet, was not immune. We took a hit like the bookselling trade in general and like the larger Cape business community.
So when President Obama said we should all dust ourselves off and re-engage, I took him to heart. Having written a very large amount of grants in previous consultancies and projects, now at age 60, practically semi-retired at a job that was only taking a few hours a day, I applied for and received a job offer to write grants for our area's largest housing agency. I figured that I could do my part to assist people who were in housing crisis by using my writing skills. This is a problem that affects each and every one of us, whether we are in the process of losing our homes, or not.
While working at the agency, $250K in grants applied for, $32K received in two-and-a-half months, I'm pleased to say, I realized that this non-profit had a dire need for what are called "unrestricted funds". These are receipts that can be applied to administrative costs or any other program or capital improvement area. Most donors are very specific as to where they want their donations applied, as are private foundations. Public funds are also quite specific. In considering how this problem could be solved I chanced upon one of many possible solutions that would also benefit my own business, and the businesses of others in our area.
The solution is cause marketing, and the Wikipedia definition is an excellent one: "Cause marketing or cause-related marketing refers to a type of marketing involving the cooperative efforts of a 'for profit' business and a non-profit organization for mutual benefit. The term is sometimes used more broadly and generally to refer to any type of marketing effort for social and other charitable causes, including in-house marketing efforts by non-profit organizations. Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a specific donation that is tax deductible, while cause marketing is a marketing relationship generally not based on a donation."
What I proposed to my agency was this: that they set up as an eBay-approved charity under eBay's GivingWorks program. I would list some of my rare books in the normal way on eBay, with this difference: I would designate a certain amount (10-100%) of each sale as a donation to the housing agency, which operates the shelters for homeless adults, women and children, and homeless families, as well as providing a vast array of housing-related services, including mortgage foreclosure counseling, the relentless development of affordable homes, consumer financial education, and energy and weatherization so that people can afford to stay in their homes. Although the idea of working with a for-profit company was new to them, we understood that from an accounting perspective this really was no different than just accepting donations. And because, after set-up, there was no work involved except for counting the money coming in, it was not too difficult to convince my colleagues to try it out.
Since I routinely (and not happily) give over 15-20% of my sales to the sites on which I sell, it was a no-brainer to offer the same to an agency in whose work I really believe.
This is what we did: First I began working with a small group in finance and resource development. All three of us have passwords to everything we set up, so the operation is entirely transparent. The first thing we did was to go into www.missionfish.org, eBay's non-profit arm, and set up the agency as an approved non-profit. This involves submitting the IRS 501c3 designation letter and other materials related to the corporation and takes about 10 days.
Cause Marketing: Increase Sales (and do a lot of good)
Our agency served an unbelievable 43,800 meals to people in need last year.
The next thing we did was to create discrete PayPal and eBay accounts for the agency. The PayPal account is linked directly to one of the agency's bank accounts. The eBay account is linked to the approved MissionFish account, listing the account as a "direct seller." This means that when the agency itself sells items on eBay virtually all the eBay fees are rebated. I set up my eBay account as a "community seller," i.e. someone selling on eBay who was going to direct part of her sales to the non-profit (This does have the additional advantage, by the way, of rebating to my company a percentage of eBay's fees whenever I set up a listing with a donation).
Next we set up a completely open and non-threatening trial run. We wanted to keep it simple so that we could see if there were any issues that needed to be addressed. I selected 5 items from our rare book collection and put them up on eBay, using the Sunday-to-Saturday cycle. Since my items were of particular interest to buyers in the United Kingdom, I made the end-time within the parameters of a British evening. I designated 10 to 25% to the non-profit for each listing.
In our first week, we sold $1,000 worth of material, and donated $150 to the agency. And we also received some warm and encouraging email. MissionFish automatically collects the donation from the vendor. Note that this takes a little time. I made the mistake of manually paying my agency the donation amount, but we had to reverse the transaction because MissionFish was going to duplicate it. At the same time, one of my colleagues at the agency, who had been selling odd items for them on eBay, was using the new accounts and non-profit status to more profitably do what she was doing.
With a successful experiment behind us, I designed a marketing plan to expand eBay sales. After a quick search on eBay's advanced search engine, I realized that there were thousands and thousands of both casual and extremely serious eBay vendors within 25 miles of our location. These are folks selling all manner of things, some for very high prices.
The marketing plan has multiple parts. The first thing I did was to identify the ways in which the agency could be driving sales to the listings benefiting it on eBay. eBay creates a unique "home page" for each charity on its site, with a logo and a mission statement. It lists all the auctions currently benefiting the charity. One can also designate key words (like "homeless", and "mortgage foreclosure") which can be searched, as well as the location and name of the agency.
In our case, we identified the agency's web site, email blasts and appeals routinely sent to existing and prospective donors, and the media, pointing people to the agency's home page on eBay. We are aiming for about $2500/week net to the agency in eBay sales, all in valuable unrestricted funds. And for our company's part, we are more than happy to be participants. This is a win for us, a win for the agency, and most importantly, a win for our community and our friends and neighbors in crisis.
For more information on cause marketing, I will be more than happy to answer questions with a modest donation to my agency, which helped over 7,000 local families last year, and served an unbelievable 43,800 meals.
Renée Roberts can be reached at email@example.com.