The main advantages to the nonprofit organisation are a boost to fundraising and increased visibility. The main advantage for the company is a boost to their reputation or brand image.

 

There are 4 models of Cause Related Marketing from which the company and nonprofit can choose:

 

• Transaction Cause Related Marketing: the company donates a fixed percentage of revenue from one of its products to the NPO (nonprofit organisation). The donation is thus determined by the volume of sales of that product over an agreed time period;

• Licensing Cause Related Marketing: the NPO grants the use of its brand in exchange for a sum agreed on by the parties;

• Joint promotion Cause Related Marketing: the company supports the NPO by promoting its brand and/or one of its projects rather than through a direct financial contribution. When communicating about and promoting one of its own products, the company associates communication about the activities of the NPO, through leaflets, for example, or digital tools;

• Joint fundraising Cause Related Marketing:  to whom it promotes a fundraising activity for a good cause. This model is generally used by service providers. One example would be the charities promoted by airlines on board their planes.

 

One of the first and most well-known examples of Cause Related Marketing dates back to 1983 when American Express decided to sponsor a restoration project for the Statue of Liberty, donating one cent of every credit card transaction and one dollar for every new card registered.