the vast majority of charity fundraising can be thought of
in just three distinct categories;
1) Donations, contributions, gifts, etc., typically from
individuals and estates
2) Grants, mostly from private foundations and government
3) Corporate sponsorships, usually non-cash assets rather
For a corporate sponsor, it is never really about the
deductible value of the non-cash contribution, it is more
about the perceived value as an advertising or a marketing
tool. This is so common that corporations consider
contributions to charity as a marketing expense and not a
charitable contribution, thinking of it as “cause-related
“Cause-Related Marketing” differs from corporate giving
(philanthropy), as the latter generally involves a specific
donation that is tax-deductible, while “cause-related
marketing” is a promotional campaign not necessarily based
on a donation.
Depreciated assets used in business (not inventory items)
tend to have very little value as a charitable contribution.
The deductibility of non-cash contributions is limited to
the book value of the donated items or what cash value is
actually received by the charity when the assets are
converted into cash – whichever is less.
The uncertainty of what the converted cash value will be to
the charity gives rise to businesses not wanting to take
charitable contribution deduction. Conversely, the certainty
of simply attributing the cost of the contribution as a
business marketing expense is the favorable accounting
When a business needs to liquidate a significant group of
assets, (such as a hotel needing to refurbish their rooms to
stay current in the marketplace), there is often a large
expense associated with removing the assets.
The hotel has a choice to make, it can either contract with
a for-profit liquidation business to take the room
furnishings (paying the liquidation business to remove the
assets), or the hotel can make a “cause-related marketing”
donation to a charity. Both the book value of the assets and
the expense of removing the furnishings from the property
would be a “cause-related marketing” expense.
All other things being equal, a corporation would choose
making a “cause-related marketing” donation to a non-profit
charity over contracting with a for-profit business to
remove the furnishings from the hotel rooms.
“Cause-related marketing” is a powerful marketing tool that
business are increasingly leveraging. According to the Cone
Millennial Cause Study in 2006, 89% of Americans (aged 13 to
25) would switch from one brand to another brand of a
comparable product and price, if the latter brand was
associated with "good cause".
For the corporation to realize the potential of a
“cause-related marketing” donation; the donation must have a
legitimate marketing value. There are a host of different
ways that both the for-profit corporation and the non-profit
charity can accomplish a sincere marketing effort;
The non-profit charity publically acknowledges the donation
from the business. This is easily accomplished by simply
making note of the donation on the charity’s web site and in
The non-profit charity allows access to the charity members.
A hot link to the business web site on the charity web site.
The non-profit charity advocates that members and the public
use the products or services of the business.
The corporation is allowed to use the non-profit charity’s
logo on advertising and web site marketing opportunities.
The corporation tells the story of supporting the non-profit
charity in corporate documents such as the annual report,
other investor documents and advertising campaigns.
The corporation’s public relation department makes a news
release to the various news media outlets telling the story
of the “cause-related marketing” donation.
For the “cause-related marketing” campaign to be effective
the corporation must choose a charity like A Creative
Charity Solutions (CCS), Lift Up For Vets all part of
Foundation for Educational Development, Inc. (Founded in
1975), that will resonate with customers. Veteran centric
causes are extremely effective with a majority of potential
customers. CCS is one of few that has the experience to
complete a project that yours.
When a business (a resort hotel casino property) in a highly
competitive market (Las Vegas) is required to update rooms
to stay competitive, it makes sense to look to a
“cause-related marketing” opportunity when it comes time to
move the old out and the new in.
Contracting with a traditional for-profit liquidation
business to remove the old furnishings, typically giving the
fully depreciated non-cash assets to the liquidation
business and paying to have the furnishing removed from the
property, there is no marketing opportunity (other than
making the claim that the rooms have been refurbished).
Making a “cause-related marketing” donation to a charity
does give rise to the opportunity of additional marketing
campaigns, (supporting veterans). It is then up to both the
for-profit corporation and the non-profit charity to make
the “cause-related marketing” campaign happen effectively.
The corporate culture often dictates that when depreciated
non-cash assets are disposed of, they must be donated to a
charity, and not just given away to a for-profit business.
This is a decision that the board of directors has already
made and published as part of the operations procedures.
The partnership of a for-profit corporation and a non-profit
charity presents exceptional opportunities for both
entities, especially when structured with a very common
“cause-related marketing” contribution of non-cash assets.
Treating the transaction as a marketing expense is simple,
with the up-side possibility of an effective “cause-related
marketing” campaign as an additional benefit for the