How Transparency Factors into Social Profitability
Gaining trust for your organization
Cause-related marketing has grown into a popular strategic tactic and public relations tool for corporations and charities. Trust is the key to building a transparent brand. Trust is even more critical in branding and reporting in the not-for-profit sector. It is imperative that your audience believes that the business or organization is acting as a good corporate citizen and doing the right things to achieve Social Profitability.
Transparency requires accountability to its stakeholders, partners, staff, volunteers and donors. Engagement campaigns should take into account the cause, beneficiary, target audience, donation methods and social impact. This will contribute significantly to how your community perceives you, and by gaining this level of trust and transparency you will attract the right kind of people to your cause.
Growing support for your cause is like growing your brand. Your community is made up of customers. Decide how you will involve and engage them. An advertising campaign can speak volumes by telling your story and can have a great effect on your bottom line. Consumers may change their purchasing behaviour to choose products and services associated with causes they care about.
Communications should spell out the time period when the offer, service or event will be valid, how it will help the charity, and in the case of a purchase, how much of the amount will go to benefit the cause.
Be careful what you say and what you promise. You should promote responsible practices. Some examples worth consideration:
- Flat Donations: can be misleading to consumers. The fixed amount is donated to a charity and does not necessarily depend on the number of sales. Consumers may think that their purchase has an effect on the total donation amount.
- Corporate Sponsorship: where companies can choose to disclose the amount of their donation or simply be recognized as a proud sponsor on all advertising and event materials.
- Full Disclosure: advertisers sometimes use vague disclosures such as “a portion of the purchase price,” “a portion of proceeds,” or a percentage of “profits”. Vague disclosure lacks transparency. “A portion of the proceeds” could mean anything between zero and the full purchase price of the product.
- Registered Charity: ensure the audience sees that the benefiting charity has a charitable registration number in the province, state or country where it is operating and will issue tax receipts for applicable donations.
- Charity vs. Non-Profit-Organization: A registered charity must be established and operate exclusively for charitable purposes and will be able to issue tax receipts for donations, whereas a not-for-profit can operate for social welfare, civic improvement, pleasure, sport, recreation or any other purpose except profit and cannot issue official donation receipts for income tax purposes.
How open you are about where the money goes and how you share this information is vital to attracting and retaining potential and current volunteers and donors. They should feel that they can be genuinely connected to and involved in your cause or campaign. They then become ambassadors for you to spread the good word.