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There have been a couple of interesting stories in recent days about cause-related marketing...

• The New York Times had a piece about Noah Fradin, an 18-year-old “high school senior and budding entrepreneur” who has created a new venture called CherryCard.org, which is designed “to make it easy for consumers to give money to the charities of their choice.”

According to the piece, “Here’s how CherryCard works: Participating retailers will hand out business-card-size vouchers to their customers after a purchase. ‘Redeem this card at CherryCard.org to give $0.25 to the cause of your choice,’ reads a typical card, which is printed with a code.

“Later, after a consumer logs in to the CherryCard site via Facebook and types in that code, the card’s monetary value is deposited in their account, which they can draw upon to give to charities (which are not charged to be listed on the site). Right now there are 35 charities, and Mr. Fradin hopes to add many more.

“So who pays? The retailers do — a minimal fee per card goes to CherryCard (though Mr. Fradin is waiving it at the moment to encourage companies to sign on). When a consumer redeems a card, the retailer who distributed it is also charged its face value. Mr. Fradin believes CherryCard can be financed out of retailers’ marketing budgets because it identifies them as socially conscious enterprises. Their logo will appear on the CherryCard site and will pop up on consumers’ Facebook pages when they donate.”

CherryCard is just a start-up, and while NBC Universal and the Milwaukee Brewers are testing it, Fradin is meeting some resistance to his business model. “One business owner said, ‘I just don’t see any big retailer wanting to take the chance on an 18-year-old kid,’” he tells the Times. “But who better to get people excited about something than kids? We’re excited about everything!”

(If CherryCard doesn’t work out, Fradin does have other things to do. He starts at Brown university in the fall.)

• Meanwhile, the Deseret News has the following story:

“Times are tough, and when it comes to philanthropy, businesses across the country have tightened their belts. But while most companies are making smaller cash donations, others are giving more. Many are compensating by increasing in-kind donations and pro-bono work.

“All things considered, according to a recent study by the Committee Encouraging Corporate Philanthropy, giving levels have remained relatively stable since the recession began. Experts attribute the phenomenon to rising scrutiny from consumers, who are considering social responsibility more and more when making buying decisions.”

The story uses Overstock.com as an example of a company that actually has expanded its philanthropic efforts during the recession - especially by investing some $65 million to help artisans in third world countries to learn basic business skills and gain access to the US market.

"A company's first obligation is to make a profit," says Patrick Byrne, CEO at Overstock.com. "After that, we need to look around and ask ourselves, 'What can I do to help?'"

Beyond altruism, the story notes that corporate philanthropy can act as a sort of ‘insurance policy" for businesses. Paul Godfrey, a professor of strategy at Brigham Young University's Marriott School of Management, says that “giving builds goodwill within the community, so when something bad happens to a company, people are less likely to villainize business owners and more likely to attribute the misstep to bad luck.”
KC's View:
I absolutely believe this - that progressive companies can create stronger connections with their customers by integrating cause-related marketing efforts into their broader strategies. Some of these causes will be determined by the retailer, and some by the shopper (if the retailer is smart enough to make sure the consumers has some skin in the game).

Done right, and done consistently, it gives companies a differential advantage.