Cause marketing program has potential for charities, their donors

publication date: Jun 16, 2004

A recently-introduced cause marketing program, now targetting the nonprofit sector, bears potential to be one of those win/win/win situations in which everyone is happy.

KidsFutures is a for-profit consumer loyalty program, which has been promoting to individuals the opportunity to fatten up their children’s RESPs by purchasing designated products, suppliers of which then dedicate a specified amount to the RESP.

Participants receive a quarterly Education Savings Guide, listing the products eligible for the loyalty program and the premium each will earn towards the education program, for a potential total each time of $500. For example, Proctor and Gamble offers, among other products, $1 on any Pampers product or $5 on a Swiffer WetJet. Consumers collect UPC labels or receipts from their purchases and redeem them each quarter.

Reaching out to the nonprofit sector, the company is offering “schools, charities, sporting groups and other social organizations” the opportunity to get in on the benefits by promoting the program to their members/donors.

How it works for nonprofits

In its promotional material, KidsFutures tells nonprofits:

  • Register your organization at www.kidsfutures.ca or at 877/656-6046 and get a fundraising ID#
  • Receive information kits for each family in the organization’s database, including special enrollment information linked to the organization
  • Distribute the kits to members/donors, who can then enroll, including their affiliation with the group as part of the process
  • Be compensated in two ways – with a $5 “bounty” for every person in the group who registers and activates the account by completing at least one transaction with a partner company, and with a six-month rebate equal to 5% of the total program earnings realized by your members
  • In return, simply promise to promote the KidsFutures program at least twice a year.

All of these benefits are free to the consumers and free to participating groups. The question arises, of course, is the company a substitute Santa Claus? Not quite – it is a for-profit corporation, and it needs revenue to prosper and grow. And growth is very much on its radar screen.

Two main revenue streams

KidsFutures currently has two main revenue streams, says CEO Mark Farrell. It is paid a fee by each partner company to have category exclusivity in the product offerings and gain access to the program’s members, who of course represent their prime demographic – the 29- to 45-year-olds who are in their prime years of family formation and buying “stuff”. Partners also pay a percentage of the product price to KidsFutures for every sale they make under its aegis.

Companies find the avenue to consumers attractive, says Farrell, not only because the recipients are good potential customers, but also because of the “halo effect” of being associated with the good cause of helping parents (and grandparents, uncles, aunts and friends, who are encouraged to register as well) pay for their children’s education. “It’s a powerful statement,” he says, “we can help your kids’ future if you buy Tide instead of another brand.”

In addition, although it does not play up this aspect too strongly in its promotion and on its web site, KidsFutures does offer to set up an RESP for consumers who do not yet have one, through Allianz Education Funds. This is undertaken through a sister financial services company, KidsFuture Investments, which is compensated by Allianz as would be any other broker/dealer.

Co-branded credit card coming

Other sources of revenue/benefits to participants are in the works. In May, the company will launch a co-branded CITIbank MasterCard. Consumers will get contributions to their RESP from using the credit card, as they do now with programs such as Air Miles.

Starting in the summer, and nationally by back to school season, they’ll be able to “double dip” as KidsFuture expands a program which has until now been confined to the London ON market, in which certain major retailers have provided RESP contributions to registered customers for their purchase of anything in the store.

Under the retail side of the program, consumers can already register any existing MasterCard, including their Air Miles card, and get double-dipping benefits.

Profitable dinner

“For example,” says Farrell, “you spend $80 on a dinner at East Side Marios in London now and eventually anywhere in the country, and you get 5% towards your RESP as well as your four Air Miles.”

Other benefits available to registered consumers include lump sum contributions tied to specific purchases, such as $100 for signing up with AOL, the ability to convert other loyalty currencies into cash contributions, the opportunity to purchase from online retailers, linking via the KidsFutures web site, and direct contributions by the registrants.

Marketing to consumers, muted to date, will get stronger and stronger throughout 2004, Farrell promises. CITIbank itself will invest considerable funds to launch the credit card, and increasingly participating manufacturers and retailers will boast of their involvement in the program. For example, Weston Bakeries will include a KidsFuture belly band on its Wonder Bread packages, and stationeries supplier Sanford will flash the KidsFuture logo on all its products.


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