This document discusses purchase-triggered donations, where companies pledge to contribute a percentage of product sales to charity. It provides examples of Norwegian companies that partner with charities in this way and summarizes research on these partnerships. Interviews with Norwegian organizations found a lack of strategy around partner selection, donation amounts, and campaign evaluation. While companies believe the campaigns are effective, there is little formal investigation. The document concludes that communicating CSR provides legitimacy but can be difficult to verify given long timelines with no clear outcomes.

1. Kjøpsutløste donasjoner
The Marriage of Hard Commerce
and CSR
Peggy Simcic Brønn,
førsteamanuensis, BI
Leder, Senter for
Virksomhetskommunikasjon

2. Purchase-triggered Donations
• A type of cause related marketing
• Where a company pledges to contribute a
percentage or set amount of a product’s price
to a charitable cause or organizations
• A type of sales promotion
• Co-branding
• Alliances
• The amount is usually limited to protect the
company in the event of extreme response

3. • ”A method of offering consumers two distinct
positive outcomes for one price.”
– Strahilewitz and Myers (1998)

8. • ’Philanthropy is like hippy music, holding
hands, RED is more like punk rock, hip hop,
this should feel like hard commerce.’
Bono, BBC News, January 2006

9. Norwegian Experience:
Organizations Surveyed
• Body Shop • Stine Sofies Stiftelse
• Norgesgruppen • Zulufadder
• OmegaVita • Kreftforeningen
• Gyldendal • UNICEF
• Mesterbakeren/Rema
1000

20. 40 kroner fra hver solgte leppepomade går
direkte til Staying Alive Foundation som
arbeider med HIV/AIDS-forebyggende
tiltak ved å dele ut stipender til
grasrotprosjekter rettet mot ungdom

21. Bag for Life koster kr. 40,-, og 10 kroner
fra hver solgte bag går til Children on the
Edge

23. Conclusions

24. Strategy?
• Very little strategy regarding:
– Partner choice (many based on personal contacts or
coincidence)
– Announcing donation amount
– Evaluating the campaign (expenditures and customer
response)
– Selection of products for specific cause
• Strategy to come? Yes - apparently after a (few) trial
round(s)

25. Announcing donation amount
• Very few have defined practices/strategy
• Some only publish result if it exceeds
expectations/sales forecasts
– (less is seen as embarrassing)
• Seemingly more sensitive issue for companies than
for NPOs
• Exception: Body Shop - always publishes amounts;
for them charity is a big part of the whole business
strategy

26. Selection of products
• More coincidental than strategic: “natural” choice
according to type of business (bread at
Mesterbakeren, books at Gyldendal, etc.)
• Larger companies with wide range of products (e.g.
Norgesgruppen and Body Shop)

27. Communication
• Decided lack of creativity in campaigns regarding
product choice and communication
• Difficult to find campaigns on NPO and firm webpages
– must do a ’search’
• Some information that is available is contradictory
• Little to no public information on donation amount
• Marketing communication nearly non-existent

28. Curious facts
• Majority had no exact account of expenditures
(work hours, marketing-related costs, etc.) and
some did not have enough overview to provide
estimates either
• Strong belief in effect of campaigns despite lack of
formal investigation (customer surveys, etc.) into
reactions to/outcome of campaigns

29. Curious facts cont’d
• Many less hesitant to announce estimated costs than
to announce donation amount.
• Stated openness vs. lack of information (e.g. on own
websites) and hesitancy to provide exact numbers.
• A few cases of lack of clarity: who initiated the
cooperation and involvement/responsibility of the
parties (e.g. regarding advertisement)

30. • Communicating partnership message: The
most important part is the effective
marketing campaigns keeping in mind the
target audiences.

31. If I know a firm supports a good cause or
shows active CSR:
2009
Neutral Agree 1999
It is more likely I will purchase 23% 58% 59%
from them.
There is a greater chance I would 34% 44%
work for them.

32. 2009
Disagree Neutral Agree 1999
Most corporate information on csr is 24% 33% 28% 30%
true. (packaging, internet and
advertising)
Most corporate information on csr is 30% 32% 27% 34%
designed to fool me.
I don’t believe what firms say about 26% 28% 37% 44%
csr
It’s better for consumers that csr 29 33% 29% 48%
information be removed from
corporate communication

33. Name a Norwegian firm that you know supports a good cause:
40-100% 30-39% 20-29% 10-19% 5-10%

34. Practical execution
• Dependent on power distribution (size of NPO vs.
size of company):
– Large, well-established NPOs leave all activity (product
development and marketing), expenses, and risk to
companies (e.g. incorporates minimum donation amount
in contract. Only activity: keep watchful eye to ensure
alignment with cause and ensure quality of campaign)
– Smaller NPOs involve themselves more directly and take
on more costs.

35. Key Issues for Success
Identifying the right issue or cause: aligning with the company’s
product or services, its market or its geographical community.
Selecting a right partner: a profit and a non- profit completely
understand each other’s goals and objectives.
Establishing the relationship: clear understanding of the nature
of the relationship of the two companies through a formal
document which spells out how the funds are raised by the
company and any limitations such as a maximum amount to
be contributed.
Benefits and challenges: identify potential problems and make
efforts to avoid them

36. Research
• CSR initiatives create benefits for companies appears to be by
increasing consumers’ identification with the corporation, or
customer–corporate (C–C) identification,
• Nonprofits should choose company partners that are
attractive targets for Customer-Corporate identification and
already are adept at prompting it
• A company partner should have a strong CSR record, and its
organizational values should be widely perceived as consistent
with the CSR initiative
Lichtenstein et al. 2004

37. Previous Research Shows:
• Size of donation and product type can
influence consumers' willingness to pay more
for a charity-linked brand
• The donation and corresponding price
difference should be relatively small
• Participants will choose a frivolous product
linked to a large donation significantly more
often than a practical product with a lower
donation Strahilevitz, 1999

38. In other words:
• People are more likely to buy a higher-priced
box of chocolates with a large percentage
going to charity than a low-price bottle of
water with a small percentage going to
charity.

39. Motives for CSR Engagement
SUSTAINABILITY LEGITIMACY PROFITABILITY
Why not? Improve image Avoid regulation
It’s the right thing to do Sociocultural norms Give business a chance
Personal satisfaction Appear ethical Shareholders’ interest
Build networks Long-term self interest Viability of the business
Gather knowledge Problems can be
Proactive rather than opportunities
reactive Business has the resources
Peggy Simcic Brønn 39

41. Criticisms
• A lack of transparency with regards to the amount of money
going to charity as a percentage of every purchase
• A retail middleman between donor and charity is
unnecessary; donors should just give
• Product Red’s expansion into traditional fundraising
techniques, such as art auctions, undermines its claim to be a
different and more sustainable approach to raising money for
AIDS
• The campaign profits by using diseases as a marketing vehicle
• Apple donated $10 of the sale of their $149 iPod during the
initial stages of the campaign, and no longer discloses how
much it donates. Product Red states on their website that they
donate “up to” half of their gross profits.

43. Business Environment of RED
companies (Ponte et al. 2008)
• High-profile branded manufacturers or providers of services
• All subject to extreme competition in their segment
• Many are under pressure to deliver higher volumes at lower
prices
• Operations are often labor-intensive
– Depend on low-skilled, low-paid workforce in developing countries
• All headquartered in US (not Armani) and on stock exchange
(not Armani and Hallmark)
• Pressure to deliver shareholder value
• Stalked by activist investors

44. RED
• Re-focus on financial bottom line – nature of the
problem (AIDS) demonstrates why business should
provide resources for solving these types of
problems
• RED stays focused on one issue
• Creates media attention and ’feel good’ around
products
• May stimulate sales (66% of hits on RED website
continued on to one product site in one week-end)

45. Communicating CSR: provides information that
legitimizes an organization’s behavior by
trying to influence stakeholders and society’s
image of the company
Difficult:
Can not be easily verified
Projects often very long with no evidence of
outcome

46. Paradoks
8. Generøsitet: Generasjon G (den generøse generasjonen)
fortsetter å dele alt, ikke bare filer. G-erne elsker produkter
hvor en del av inntekten går til gode formål.
MEN
6. Grønt: For å nå de mange miljømålene vil myndigheter og
bedrifter føle seg stadig mer forpliktet til å gjøre det enklere
for forbrukerne å leve bærekraftig.
7. Sporing og varsling: Følg produktene fra vugge til grav, bli
holdt løpende oppdatert om reiser, postforsendelser eller
fotballkamper.

47. Lykke til og takk for meg!