“The point is, ladies and gentleman, that greed — for lack of a better word — is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind. And greed — you mark my words — will not only save Teldar Paper, but that other malfunctioning corporation called the USA.” Michael Douglas as Gordon Gekko, Wall Street (1987) In 1970, economist Milton Friedman wrote a now-famous article for the New York Times Magazine entitled “The Social Responsibility of Business Is to Increase Profits.” Friedman argued that businesses’ sole purpose is generating profit for shareholders; companies that pursue the “social good” act irresponsibly and jeopardize profits. Friedman’s spin on capitalism was widely embraced in boardrooms across America. According to this view, viable businesses only consider their own economic interests. Any embrace of broader society–such as paying a living wage, caring for the environment, or giving back to local communities–is a distraction from making money, the only legitimate business value. This fixation on markets over social values drove business thinking for the next forty years, fostering an individualistic ethos characterized as heroic business leaders slashing costs and increasing value for their companies by whatever means necessary. Today, businesses are proving Friedman wrong. Whether it’s called altruism, social responsibility, or strategic philanthropy, businesses have learned that combining enlightened self-interest with support for social causes makes business sense. Consumers increasingly reward companies that stand for something beyond profits (and punish those that do not). That is why few topics generate loyalty among skeptical consumers like a company’s proven commitment to a worthy cause. Embracing a social mission that aligns with your business, when practiced consistently, authentically and honestly, can become a cornerstone of your slightly famous marketing plan. Authenticity: Revisiting Classic Virtues We are living in a period of historic economic turmoil. The current economic crisis, caused by putting individual interest above all else, marks a turning point for the “greed is good” ethos of the last few decades. It demonstrates that a society of individuals pursuing their own selfish interests eventually unravels. In times of crisis, the public’s acceptance of aggressive, self-serving business practices wanes. In its place, consumers seek businesses that embrace classic virtues based on trust, good citizenship and civic responsibility–a trend that only promises to intensify in the coming years, as demonstrated by recent studies that consumers carefully consider a company’s reputation when making purchasing decisions. The 2006 Cone Millennial Cause Study, for example, found that 69 percent of Americans consider a company’s social/environmental commitment when deciding where to shop, and 89 percent are likely or very likely to switch from one brand to another—price and quality being equal— if the competing brand is associated with a good cause. This civic-minded generation, 78 million strong, not only believes it is their responsibility to make the world a better place, but 78 percent of them believe that companies have a responsibility to join them in this effort. People feel good knowing that some of their money will support social causes. Over the past decade, socially responsible investing has risen more than 258 percent, from $639 billion in 1995 to $2.29 trillion in 2005, according to the Social Investment Forum. Although few might argue that businesses must turn a profit to remain viable, those that operate purely on selfish motives are rarely successful over the long term. “The view of business as necessarily selfish…is, as it always has been, nonsense,” says noted British economist John Kay. “There is widespread agreement on which are indeed good businesses. They are characterized by satisfied customers, motivated employees, well-rewarded investors, and high reputations within their communities. They are admired by everyone: their customers, governments, the financial community, the people who work for them, and other businesses.” The idea of Corporate Social Responsibility (CSR) is taking hold, according to a report by consulting firm Deloitte. Being ‘Good’ Is Good Business, a recent report, says that 25 percent of the Fortune 500 companies now publish annual CSR reports. “Investors want to know which companies are protecting the environment, conducting business to enhance the lives of those they touch, and contributing to the economic prosperity not just of stockholders but of the wider community.” Not to be confused with corporate charity, Corporate Social Responsibility is a true operational strategy, capable of delivering strategic advantage to companies that embrace CSR as part their company’s DNA. “This explains why more and more executives understand the new complexity of a business’s social contract,” reads a recent report by McKinsey & Company. “They recognize that only by incorporating environmental, social, and political issues into their core strategies can they at once meld the opportunity to gain competitive advantage in the marketplace and help address some of the world’s most intractable problems.” Embracing a social mission delivers a message that your business is totally committed to your target market’s best interests, not just their purchasing dollars. Richard Steckel, author of Making Money While Making a Difference, believes that strategic philanthropy strengthens a company’s brand by connecting with consumers’ personal value systems. Steckel calls this “the halo effect.” “Consumers have a wealth of new products and services to choose from, and it’s tougher than ever keeping them loyal,” says Steckel. “Consumers are starved for evidence that businesses stand for something meaningful, and look for behavior that reflects those values.” Strategic Philanthropy: Choose a Cause that Aligns with Your Business When your company supports a social cause that complements the mission and purpose of your organization, you not only help your community, but can boost employee morale and retention, and strengthen relationships with your customers, clients, prospects and vendors. The secret is actively integrating strategic philanthropy into your core business to enhance the company brand while making an authentic social impact. “Cause branding makes the company’s commitment to a social cause part of the company’s soul,” says Carol Cone, CEO of Cone Inc. “Your business goals are the starting point for identifying charitable causes. A company must be clear about its core values, and most importantly, how it might participate in the world in which its employees live, work, and do business.” Cone suggests the following questions when considering cause-branding initiatives: • How can supporting this cause encourage greater interest in my company’s products and services? • Will supporting this cause improve the perception of my company and its products and services? • Will this cause increase visibility for my company and strengthen our brand? • Will the cause help us reach new customers? • Will this cause foster relationships, partnerships, and alliances within our target market? • Will this cause enhance employee loyalty, morale, and recruiting strategies? For example, LensCrafters stands for healthy vision, and created a natural cause brand in its Give the Gift of Sight. PNC Financial Services supports early childhood education with PNC Grow Up Great, a cause brand that incorporates multiple partners such as Head Start, Sesame Workshop and Family Communications.” White Dog Café, a popular restaurant in Philadelphia’s University of Pennsylvania section, is well known for its commitment to social responsibility. White Dog’s mission serves four areas: customers, employees, community and nature. The business supports several local causes, including environmental responsibility (it was the first business in Pennsylvania to purchase 100 percent of its electricity from Wind Power Sources), paying a living wage to employees, and sourcing from local farms where meat and poultry are raised humanely. Cone stresses that cause branding initiatives must be led by a company’s top management to be authentic and effective over the long term. “Unfortunately, many companies create strategic cause branding programs and hand them over to less experienced executives for execution,” says Cone. “A company’s senior executives must actively support and champion cause branding programs, both internally and externally. This is how cause branding achieves maximum impact and credibility.” Getting Started Cause-related marketing yields mutual benefits. Look for partners with a similar agenda whose goals can be better achieved by partnering with your company. Take inventory of the assets that make you an appealing partner in a cause-related venture. Lead with integrity. Cause-related marketing is only viable when you completely believe in the causes you embrace. This requires that you follow your ethical compass in every decision. We are human beings first, consumers, investors and businesspeople second. Smart companies build human values into their strategic missions, interweaving their bottom lines with others in the community. Embrace a cause. There are many types of mutually beneficial relationships you can form with your cause-related partner, including special events, sales promotions and collection plans. An easy way to embrace a cause is to team up with a charity. What about your business appeals to a nonprofit partner? If you have a publishing company, consider supporting the public library. If your clients are primarily middle-aged women, think about supporting a relevant cause, like breast cancer research. Cadence Network is an expense management firm serving the banking, restaurant, retail, and grocery industries. For years, the company has led an energy consumption initiative to preserve finite natural resources such as water and to promote recyclable waste. In these efforts, it partners with The Arbor Day Foundation. “We chose to work with The Arbor Day Foundation because it aligns with our business, including natural resource conservation and paper reduction,” says Jeffrey Hart, Cadence Network CEO. Pick Wisely and Realistically. Before partnering with a charity, get to know the people you’ll work with, and get a feel for what they can deliver. Establish Measurable Goals Up Front. Establish agreed-upon, realistic goals at the outset and measure how well you achieve them. Put them down on paper and refer to them as you implement and evaluate the program. Get The Word Out. Your cause-related promotion campaign needs just as much promotional support as any other marketing initiative, and you must take steps to ensure that your target market knows about your cause marketing efforts. As your partnership takes shape, become ambassadors for one another. Talk about your charitable partner, have flyers available, promote the organization (and your partnership) on your website. Ask your partner to do the same. As your partnership takes shape, look for ways to become ambassadors for each other. Whenever you can, talk about the charitable organization. If your company is open to the public, have flyers available. Promote the organization (and your partnership) on your website and in your newsletters. Ask your partner to extend the same courtesies to you. Never lose the marketing focus of your community partnership efforts. Even though the work is philanthropy, your cause should generate interest in your business and motivate people to buy from it. Select a cause that is important to your target market, and make sure your target market sees that connection. Tremendous goodwill can be generated, and media attention can be its side benefit.