We’ve all seen the Red Campaign to raise awareness and dollars for the fight against AIDS in Africa by giving a small portion of the profits of from sales of certain products (coffee, yogurt, t-shirts) to charity. (An example is below). But have you ever wondered if all that buying of cause-related products hurts donations to charities? The answer is yes, according to a study from the University of Michigan’s Ross School of Business.
“If two consumers have equal preference for a product, which is offered at the same price to both, but one of them buys this product as a cause-marketing product, her charitable giving will be lower than the other’s,” Ms. Krishna writes.
It was a reminder to me to see my purchase of Newmans’ Own products (the profits of which are donated to charity) as simply another purchase, rather than as a charitable gift. It’s also prompting me to ask myself what are the unintended consequences of other innovative fundraising initiatives?