CAUSE RELATED MARKETING AND CORPORATE PHILANTHROPY IN THE PRIVATELY HELD ENTERPRISE

Owners of businesses represent an interesting case in the study of the intersection of personal and corporate philanthropic values. Because individuals who own businesses have the means and the ability to act o n philanthropic motivations through the medium of their businesses, it is interesting to explore the extent to which their corporate contrib utions to nonprofits are philanthropic in nature or instrumentally mot ivated, as in the instance of cause related marketing. The trade-offs between cause related marketing and corporate support of nonprofits ar e complex. Although larger firms are increasing their investments in c ause related marketing, the extent of and motivations for adoption of cause related marketing among privately held businesses is less well u nderstood. This study of 478 businesses which are supporters of arts o rganizations shows that privately held businesses of medium size (300 to 500 employees) are participating in cause related marketing to a si gnificant degree. The adoption rate of cause related marketing is abou t 40%, and the primary benefits sought are company image enhancement a nd product marketing support. Adoption of cause related marketing amon g privately held and smaller enterprises will grow as CEOs exhibit sat isfaction with the results of their program, intend to engage in posit ive word of mouth about it, and plan to allocate more resources to it.