Do Do-Gooders Do Better?

PNC Financial Services Group wants to get kids ready for school.

This month, the Pittsburgh company, which has a history of funding children’s causes, the arts, parks, museums and more, unveiled “PNC Grow Up Great,” a 10-year, $100 million program to improve school readiness among children up to age 5. Under the initiative, created in partnership with Sesame Workshop, PBS stations and Family Communications Inc. (producers of Mister Rogers’ Neighborhood and Head Start centers), PNC will provide grants through its PNC Foundation to early-childhood development groups in the company’s primary markets, sponsor Sesame Street programming, underwrite PBS Kids programming and collaborate with PBS stations on workshops to teach parents and care givers how to enhance development of young kids. PNC employees will volunteer a combined 100,000 hours a year. The goal is to reach 2.8 million children.

The goal, PNC CEO James E. Rohr said, is to create “stronger, smarter, healthier children, families and communities.” But there is also an ancillary benefit. “Association with a cause makes people want to switch to your brand,” says Chris Cooney, vp of marketing and branding. She says the initiative fits perfectly with PNC’s new brand position, introduced in March with the tagline, “Every day is an opportunity to do more.” The company plans to actively promote its commitment to the cause in ads by Doner in Southfield, Mich. “We’re going to talk about and present the PNC story,” Cooney says. “It will move the bank and the issue to the forefront.”

These days, many companies strive to be good corporate citizens. They are usually hard-pressed to gauge exactly how much philanthropy helps the bottom line, but anecdotal evidence and consumer polling suggest such activities do benefit brands. A July 2002 survey by Cone Inc., an Omnicom-owned cause-marketing specialist in Boston, found that 84 percent of Americans would likely switch to a brand associated with a good cause if price and quality were similar. That was up from 81 percent in 2001 – an indication that 9/11 had an effect in this area.

“Our entire being was rocked to the core,” says CEO Carol Cone, whose agency was the architect of PNC’s program and has developed cause initiatives for companies including Avon and Gillette. “Consumers no longer have trust in anything, so consumers look to companies for a lot more. They look to see what companies stand for.”

In Cone’s study, 78 percent of respondents said companies have a responsibility to support social issues, and 89 percent said that responsibility is more pressing in the wake of recent corporate scandals. Meanwhile, 87 percent said they are most likely to remember a company when they see information about its social activities.

Those activities are wide-ranging. Avon has long helped in the fight against breast cancer. Pfizer brings medicine to low-income and uninsured patients. ConAgra Foods works to eradicate child hunger. Home Depot supports organizations that build and rehabilitate affordable housing. And while goodwill efforts may spring from altruistic impulses, experts say they can also build brand awareness and loyalty better than some multimillion-dollar ad campaigns.

Cause branding, done correctly, “can light a company on fire from the inside out,” says Cone. It integrates a company’s social commitments into its brand identity and personality. The process combines philanthropy, community relations, marketing and human resources to build brand equity, enhance reputation and positively influence shareholder behavior – while also strengthening society.

“Smart marketers no longer sit on the sides,” says Cone. “They want to be a heartfelt, soulful brand that’s relevant to consumers.” Goodwill helps them achieve that, Cone says, which is why companies actively promote such associations through ads, hoping to generate competitive advantage in the marketplace.

American Express is a cause-branding pioneer, having engaged in and promoted goodwill efforts for two decades. When the company launched a campaign to raise money for the restoration of the Statue of Liberty in 1983, then chairman Louis V. Gerstner Jr. called the initiative “a novel concept which ties philanthropy directly to the marketing of the company’s travel products, its charge cards, travelers checks and travel services.”

The New York-based firm donated 1 cent to the Statue of Liberty-Ellis Island Foundation for each U.S. purchase charged to an AmEx card and each purchase of AmEx travelers checks, and $1 every time an AmEx card was approved in the U.S. or the company sold a travel package worth more than $500. AmEx spent $6 million to promote the effort and raised $1.7 million for the foundation. Moreover, AmEx card usage increased 28 percent over the course of the campaign, according to the company.

“We weren’t sure if it would be a way to help business or just an interesting formula for giving money away. It’s both,” Gerstner said at the time. “We now know we can do well by doing good.”

AmEx has raised millions of dollars to fight hunger, domestic violence, cancer and AIDS, to name a few causes. The company is currently running a campaign for its extended-payment AmEx Blue card that promotes VH1’s “Save the Music” effort. Launched last February, “Blue for Save the Music” aims to restore music-education programs in public schools. PSA-style ads by Ogilvy & Mather, New York, feature Mary J. Blige, Boyd Tinsley of the Dave Matthews Band and Sheryl Crow, among others.

According to The Chronicle of Philanthropy, AmEx logged more than $30 million in cash and product donations in 2002 and is expected to spend a similar amount this year.

According to the Chronicle’s annual survey on corporate giving, pharmaceutical firms gave the most in 2002 in terms of combined product and cash donations. Merck & Co. led the way: $58 million in cash, plus medication valued at $575 million; Pfizer came in second, with $70 million in cash and $528 million in product donations. Other top givers included Bristol-Myers Squibb, at $369 million, Microsoft, at $207 million, and Johnson & Johnson, at $197 million. The nation’s wealthiest companies did give less last year than in 2001.

Cause branding invites an emotional connection that straightforward advertising often can’t achieve, says Tony Wright, chief strategy officer at Ogilvy. “It’s something [consumers] can participate in,” he says. “If I go on a big walk for breast cancer, and I’ve taken my Sunday to do that, it builds a deeper connection.”

“I think in this day and age, it’s a critical requirement,” says Marilyn Reznick, vp of education programs for the AT&T Foundation. “People have a choice. People do look at all aspects of a company’s behavior. We want to do everything we can to make sure we have an edge, and we think doing good work helps.”

AT&T, based in Basking Ridge, N.J., has supported charity causes – environmental, educational, artistic and more – for 100 years. It has advertised some of its goodwill efforts, including its donations to the American Red Cross. “The more calls you make, the more help we can give,” said a 1998 spot from Young & Rubicam, New York, promoting AT&T’s long-distance services. (AT&T is one of 25 U.S. companies that have made long-term commitments to the American Red Cross Annual Disaster Giving Program.)

The AT&T Foundation has $20 million to bestow on causes this year, down from $45 million in 2001 and 2002. But it is commissioning new ads highlighting the company’s role as a corporate citizen and remains committed to cause marketing, buoyed by the results of surveys like Cone’s and by feedback from the communities served by its efforts. “It’s enough to convince us it’s worth our efforts out there,” says Reznick.

Sometimes philanthropic initiatives evolve out of promotions. For example, last October, employees at some 22,000 companies and organizations participated in the seventh annual Lee National Denim Day, raising $6.7 million for the Susan G. Komen Breast Cancer Foundation. (Employees get to wear denim to work in exchange for a $5 donation.) The program has raised $36 million since 1996. The goal of this year’s denim day – Oct. 10 – is to raise $7.5 million, says Liz Cahill, director of advertising and public relations for Lee.

While Lee National Denim Day is the largest single-day fundraiser for breast cancer, dozens of other marketers support the cause, including BMW, Ford, Hallmark, Johnson & Johnson, Kellogg’s, New Balance, Pier 1 Imports and ConAgra. Cahill says it was a natural fit for Lee. Lee is primarily a women’s brand, and all the Lee executives involved in the brainstorming session seven years ago to identify a worthy cause knew someone affected by the disease.

Each year, Lee chooses a celebrity spokesperson to promote the effort. “No one listens to us as passionately as they listen to a celebrity,” says Cahill. This year it’s Christina Applegate, whose mother is a breast-cancer survivor. Ads from Barkley Evergreen & Partners in Kansas City, Mo., are running in women’s magazines.

Still, there are possible pitfalls. Ogilvy’s Wright warns that cause marketing can provoke ire if it is seen as gratuitous (i.e., if there is no clear connection between the company’s business and the programs it sponsors). Also, it can be seen as opportunistic. Target advertises its “Take Charge of Education” program – which gives more than $2 million a week to communities throughout the U.S. – but refuses to talk to the media about its philanthropy. And LensCrafters rarely promotes its “Give the Gift of Sight” program – which distributes used glasses to people in need internationally and new ones to those in America – for fear of exploiting its own generosity.

“We’re not against talking to customers, but we’re moving there slowly,” says Susan Knobler, founder and vp of the LensCrafters Foundation, who has worked with the program since its inception in 1988. “We would never say, ‘Come buy a pair of glasses, and we’ll help a needy person,’ ” says Knobler. Instead, stores have collection boxes, and PSAs run from time to time. “It’s very low-key,” says Knobler.

Tim Philpott, director of brand marketing for LensCrafters, recognizes that the goodwill helps drive traffic into stores, but says that is not the primary mission. “We’re not just chasing the mighty buck,” he says.

AmEx’s Smith has advice for the LensCrafters of the world that have not yet marketed their philanthropy. “Cause marketing gets you closer to customers,” she says. But be committed, and don’t act selfishly, she warns. “Consumers are pretty smart. Synergies can benefit marketing and philanthropic objectives, but it has to be part of the company’s value system.”