Cause Marketing- How Big Business Helps Small Business

A new trend occurring in the world of big business and large corporations is the idea of cause marketing, which capitalizes on the blending of a brand with a social issue, and many companies are jumping on this charitable bandwagon by giving back to small businesses. “How you improve the American economy and create jobs is on everybody’s minds these days,” notes Cause Marketing Forum creator and president, David Hessekiel. “Companies know that it’s on the minds of their consumers, and they want to be seen as part of the solution, not as the enemy.”

Companies such as Starbucks and Wal-Mart can definitely relate as they are often known as local competitor annihilators. But this ability to give back and help small business “helps them deal with an old issue,” says Hessekiel. Starbucks, for its part, has established the “Create Jobs for USA” campaign which raises funds need for American small business. As CEO Howard Schultz puts it, “People want human connections,” and his company also wants to connect. Starbucks has donated $5 million to the Opportunity Finance Network which helps to fund hundreds of Community Development Financial Institutions or CDFI. These are organizations that are able to lend money to small business owners at low interest rates on the local level. Starbucks also sells woven bracelets that can be bought for $5 with the customer’s order. It has a metal charm etched with the word “indivisible.”

American Express is known for its cause marketing strategy, “Small Business Saturday.” This year’s Small Business Saturday is on November 24, and what began in 2010 has now grown to over 100 million people coming out to shop and support small businesses. According to its Small Business Saturday website, American Express is looking to “support small businesses that invigorate the economy and keep communities thriving.” American Express also offers free resources for businesses to use such as in-store signage and downloadable email and social media template. Also, they will help small businesses by running ads that are “geo-targeted ad buy at no cost to the businesses.”

Goldman Sachs is also joining in with its campaign—10,000 Small Businesses. Sachs has $500 million invested in assisting small businesses. Part of the money, $200 million, is going towards scholarships, faculty training, and technical assistance that, according to the 10,000 Small Businesses website, will “help build the organizations’ capacity.” The rest of the funds will be funneled to CDFI through “a combination of lending and philanthropic support.” These investments are to help create more capital for small businesses and help grow the ability of the CDFIs in financing and assisting business.

Even Samuel Adams creator Jim Koch is teaming up his Boston Beer Company with Accion, a microlender, to help small businesses with a program called “Brewing the American Dream.” Boston Beer’s initiative began with an idea in 2007. Koch and his employees had helped to paint a community center, but afterwards Koch realized he felt no sense of pride. He says, “What I realized  is, I’d just taken about $10,000 worth of management time and talent, and turned it into about $1,000 worth of painting. And it was pretty bad painting, too.” So he restructured the company’s charity to focus on his employee’s strengths. His company has now committed $1.4 million to loans which are handled by Accion, and has also begun “coaching” small business owners. In an event similar to speed-dating, business owners can speak with Boston Beer’s managers, lawyers, accountants, and other small-business counselors to get advice on topics ranging from everyday operations to more specific tactical advice. Boston Beer Company and Accion are planning 12 more such events known as “speed-coaching” in 11 other cities.

According to the Small Business Administration, small business created 64% of the new jobs over the past 15 years, and they represent 99.7% of all employer firms. Small businesses are also responsible for more patents per employee than patenting firms, and they hire 40% of high-tech workers. What these major companies all realize is that if small business does well in America, so will they.

Resources:

Mandelbaum, Robb. “Making Small Business a Cause” Small Business, Business Day. The New York Times. 11/14/2012.

Gordon, Claire. “Starbucks Takes on U.S. Jobs Woes with Loans, Bracelets” Aol.Original. DailyFinance. 11/01/11.

 

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