Big Giving = Bigger Profit

When deciding whether to put their marketing budget dollars into advertising or cause-related marketing, senior marketing directors need to evaluate where they’ll get more bang for their buck. According to a new study by Baruch Lev at NYU’s Stern School of Business with three other professors, they’ll get a far better return investing in corporate giving programs. In fact, on average, companies are seeing a return of 200-300% on their investment in corporate giving.

My book on results-oriented cause Marketing, Cause for Concern enumerates ways that cause-relating marketing is good for a company’s health, from employee retention to niche marketing. The new study has the bottom line: for every tax deductible dollar a company gives to charity, it can expect a rise in profits of $2-$3. For every dollar a company spends on giving, it spends $50 on advertising, and doesn’t get nearly the same return on those dollars. Since the average dollar value of charitable giving came to only .1% of average sales revenue, that’s money well spent.
-Steve Adler