Cause Related Marketing

Transaction-based promotions are probably the most common form of cause-related marketing alliance. In such an alliance, a corporation donates a specific amount of cash, food, or equipment in direct proportion to sales revenue- often up to some limit- to one or more nonprofits. American Express's Charge Against Hunger is an excellent example of this type of alliance. The program began in 1993, when the company was looking for ways to motivate cardholders to use their American Express cards and merchants to accept the card. Natalia Cherney Roca, senior director of national marketing, recalls that the employees responsible for developing a new marketing program kept coming back to the successful partnership that American Express had formed with the hunger-relief organization Share Our Strength in 1988. At that time, American Express had agreed to sponsor Taste of the Nation, the largest annual food- and wine-tasting event in the United States, the proceeds of which go to SOS. Hunger relief seemed like the perfect cause for American Express to support because a large proportion of the company's credit-card business comes from use of the card in restaurants and hotels.

As a result of the success of Taste of the Nation and the increasing strength of the relationship between American Express and SOS, American Express decided to elevate its hunger-relief efforts with the annual Charge Against Hunger program. Every time someone uses an American Express card between November 1 and December 31, the company donates 3 cents to SOS, up to a total of $5 million per year. American Express's contributions are augmented considerably by other partners that have "joined the charge." For example, in 1994, Kmart agreed to donate 10 cents every time an American Express card was used in its stores from November 27 through the end of the year, yielding an additional $250,000. Other promotions during the second year of the program by the Melville Corporation, Madison Square Garden, Restaurants Unlimited, and the National Football League raised more money.

The program has been a great success for both partners. Over the past three years, American Express and other partners have contributed more than $16 million to SOS. American Express has found that as a result of the program, transactions with the card have increased and more merchants now accept the card. Furthermore, cardholders have expressed strong support for the Charge Against Hunger