Nonprofits at risk in partnerships with corporations.

Nonprofits put their brand at risk when they partner with corporations on social responsibility initiatives. According to a recent study, the reason is that people often construe such connections as a seal of approval of the corporation by the nonprofit.

Growth in cause-related marketing programs has been substantial. Although the programs have helped companies, charities and consumers, the leaders of nonprofit organizations need to enter agreements with companies with their eyes wide open. That's the conclusion of two marketing professors who examined consumer perceptions in a controlled experiment. Charities and other nonprofits may put their brand at risk when they partner with corporations on social responsibility (CSR) initiatives. The public easily might construe that such a connection represents a seal of approval of the corporation by the nonprofit.

"Our results suggest that some CSR initiatives may produce consumer inferences that are wrong, but desirable for the company," said Stacy Landreth Grau, associate professor of marketing in the Neeley School of Business at Texas Christian University in Fort Worth. "And these inferences can have potentially negative consequences for the nonprofit."

Grau and her collaborators presented their findings in "Explicit Donations and Inferred Endorsements: Do Corporate Social Responsibility Initiatives Suggest a Nonprofit Organization Endorsement?" The article written by Amanda B. Bower, a marketing professor at Washington and Lee University in Virginia, and Grau appears in the Fall 2009 issue of the Journal of Advertising.

A Case in Point

The professors designed an experiment with a fictional childhood learning company. They created variations of a print ad with several levels of connection to a pair of fictional nonprofits: the Alliance Against Childhood Obesity and the Alliance for Early Literacy.

Some ads bore only the nonprofit's logo. That involves a simple licensing agreement. Other ads promised a donation to the nonprofit when the consumer purchased a company's product. This arrangement is called cause-related...