Just inside the Flynn Theater in Burlington, Vermont, Ben Cohen and Jerry Greenfield stand aside as twentysomethings stream by to find seats at a rare hometown concert by the rock band Phish--a treat the ice-cream magnates have sponsored to raise money to clean up nearby Lake Champlain. A girl recognizes Ben. "Could I, like, make a suggestion?" she asks. "It'd be really great if you could make a marshmallow for us vegetarians."
You have just entered the socially conscious zone, where certain ice-cream lovers expect Ben & Jerry's Homemade not only to clean up the lake but to rid marshmallows of their faint animal by-products too. And, whoa. In this case, anyway, Ben & Jerry's had the answer: it uses a substitute for marshmallow gelatin, which comes from bones. Voila, a loyal customer.
Caring capitalism such as that long practiced in seeming isolation by Ben & Jerry's and a handful of others is boardroom gospel these days. Companies' motives aren't exactly holy. There's plenty in it for them. So just about everyone is giving do-goodership a spin. American Express is feeding the hungry. Alarm company ADT gives away personal-security systems to battered women. Avon Products is helping fund the fight against breast cancer. Kimberly-Clark is building playgrounds in poor neighborhoods. Barnes & Noble promotes literacy. Coca-Cola is sponsoring local Boys and Girls Clubs. Nike, Wal-Mart, Home Depot, BellSouth, MCI and Starbucks all have pet social causes, as do countless other companies big and small. There are some 800 companies belonging to a San Francisco-based group called Business for Social Responsibility.
In Philadelphia this week Colin Powell and his congregation of Presidents are embarked on a well-publicized effort to turn corporate responsibility into a duty. His summit on volunteerism will raise the bar for what passes as a socially responsible corporation. But savvy corporate chieftains began linking their companies to social causes a decade ago, seeing that as a way to stand out in a world of look-alike products. The strategy has generally worked, and now "companies are aligning furiously with nonprofits," says Lesa Ukman, president of the Chicago-based marketing firm IEG Inc. "In 1997 you can't make a decent profit unless you're socially responsible."
That is a zealot's stretch. But the trend toward "strategic philanthropy"--giving in a way that benefits the corporate bottom line--is unmistakable. In the lean and mean 1990s, companies are taking a close look at where every penny they give away goes. More and more, they are focusing on areas that resonate with their customers. So Whirlpool, whose main customers are mothers, concentrates on funding things like child care and job training for women.
Closely related to this strategy is the movement toward "cause marketing," which is the fastest-growing segment in advertising. Companies will pay more than $500 million this year for the rights to sponsor various social programs, from research on AIDS to support for local fire departments. Typically, such sponsorships come with expensive marketing campaigns that promote the company while promoting the cause. By raising public awareness, these ads will help generate some $2.5 billion for the causes they champion. The sum should double in three years, according to IEG.