Large Steps toward Small Donations: Reputational Benefits of Nominal Corporate Generosity

Abstract

Cause marketing campaigns often highlight two attributes: the percent-of-proceeds from each purchase to be donated, and the maximum amount the company will donate. For example, a recent campaign by Chipotle pledged to donate 50% of its proceeds, up to $35,000, to a zoo. How do consumers process this information when forming perceptions of the brand’s generosity? We find that the percent-of-proceeds attribute is more influential because it is easier to evaluate. As a result, brands can appear highly generous without actually being highly generous (by pledging a high percent-of-proceeds and a low maximum donation). The perceived generosity induced by cause marketing campaigns that donate a high percent-of-proceeds can lead to greater desire for the brand’s products. Comparative context (provided by exposing people to multiple cause marketing campaigns) helps people evaluate the maximum donation attribute and reduces the undue influence of the percent-of-proceeds attribute.

Keywords: Cause Marketing, Altruism, Generosity, Charity, Attribute Evaluability

JEL Classification: M31, D64, H40, D80