Corporate philanthropy is another means of showing that a company cares.
To take the example of simple corporate philanthropy, when corporations make donations to charity they are giving away their shareholders’ money, which they can only do if they see potential profit in it. This may be because they want to improve their image by associating themselves with a cause, to exploit a cheap vehicle for advertising, or to counter the claims of pressure groups, but there is always an underlying financial motive,
so the company benefits more than the charity.
For this reason corporate philanthropy is also referred to as cause-related marketing.
For example the Puget Sound Bank found that it increased its number of customers by setting up the Puget Sound Fund. The name of the fund was chosen purposely to “cement the identification” between the bank and the environmental fund. Each time a customer made a transaction at one of their automatic teller machines the bank would donate a small amount of money to the Fund which would be used to give grants to environmental groups. Cheques were produced with scenes of Puget Sound on them. The aim was to make supporting the bank seem to the public to be supporting an environmental cause.
The strategy worked better than the bank had hoped. Between 1988 and 1990 cash withdrawals through the machines increased 56% and the bank retained its market share despite increased competition. The fund raised $30,000 in 1990 which was dispersed to 32 environmental groups. It was far cheaper than an advertising campaign and attracted favourable media coverage worth more than could have been bought with conventional publicity. “It’s free advertising and of the best type. That’s press you can’t buy!” The bank’s marketing director pointed out that “banking is a business in which the perception is often the reality.”
In 2011 Coca-Cola coloured its cans white in honour of the polar bear and pledged $2 million to the WWF over two years and to match any contributions made by Canadians and Americans, up to $1 million as part of its Arctic Home marketing campaign.
Avon's Hello Green Tomorrow campaign involves selling products which contribute to fundraising to restore rainforests and a website with information on "deforestation, green tips, a blog and opportunities to share ideas on personal environmental action, as well as links to the Avon websites of participating countries and the websites of the partner organizations".
Hello Green Tomorrow 2012 fundraising products are being launched in 51 countries around the world, with all proceeds consolidated and contributed to The Nature Conservancy for restoration of the Atlantic Forest in Brazil and to World Wildlife Fund to help restore the tropical forests of Indonesia (Borneo and Sumatra).
However The Unsuitablog: Exposing Ethical Hypocrites Everywhere! has pointed out that Avon uses palm oil in its products and claims that "production of palm oil is the fastest growing cause of tropical deforestation on the planet". Avon has since promised to "source sustainable palm oil through the purchase of 'book and claim' certificates estimated to be equivalent to 100 percent of the palm oil and palm oil derivatives it uses."