Consumerism's Role in Nonprofit and Philanthropic Strategy

Introduction: Defining Consumerism and Charitable Purchasing

It is worth noting at the outset that consumerism does not have a single, universally agreed-upon definition. Over time, a number of definitions have been proposed in an attempt to develop a better understanding of the concept. To a large extent, however, consumerism concerns the purchase of goods and services to meet certain needs or wants, as well as the promotion and protection of consumer interests. There are a myriad of factors that influence purchase decisions, meaning that any given consumer may be motivated by a unique combination of forces.

While individuals have traditionally been motivated by the desire to satisfy a need or want, today's consumers are increasingly driven by a desire to do good or to engage in undertakings that benefit others. In essence, consumers are increasingly recognizing that they can deploy their purchasing power as a vehicle for social good. Terms used to describe this trend include ethical consumerism and consumer charity, among others. As will be demonstrated throughout this paper, the ground appears to have shifted, with more consumers favoring the idea of giving back through their purchases. The implication is that going forward, nonprofits will largely compete with — or have their efforts complemented by — cause-based brands.

Millennials and the Fusion of Philanthropy with Business

Some authors, such as Yngfalk and Yngfalk (2019), have argued that there is an increasing blurring of the lines between philanthropy and consumerism. According to these authors, this trend is largely attributable to the growing popularity of fusing philanthropic missions with the overall business objectives of commercial vendors. To a significant extent, these changes have been triggered by the emerging millennial generation. In contrast with previous generations, millennials are more likely to do business with organizations that have charitable leanings. When faced with a choice between a company that engages in philanthropic activities and one that does not, millennials are more likely to patronize the company active on the philanthropic front. This can be attributed to the belief, particularly among millennials, that for-profit organizations ought to give back to society by engaging in charitable undertakings.

Corporate Philanthropy: Traditional Models and Key Players

Traditionally, philanthropic efforts have not been intertwined with the core operations of organizations. Instead, they have been pursued in a realm that is distinctly separate, and have largely involved the donation of funds or the sponsorship of clearly defined causes. Dedicated charities have also benefited from corporate philanthropy. Some of the companies that have engaged in elaborate philanthropic undertakings and have been recognized as generous contributors to social causes include Google, Wells Fargo, Johnson & Johnson, Goldman Sachs, Pfizer, and Gilead Sciences (Maier, Meyer, & Steinbereithner, 2014). Collectively, these companies have assigned billions of dollars to diverse philanthropic efforts over the years.

Conclusion: Opportunities for Businesses and Nonprofits

Consumerism plays a significant role in charitable efforts as well as in nonprofit operations and conduct. Therein lies an opportunity for both businesses and nonprofits to engage the incoming generation of consumers — millennials. It is clear that millennials are not only interested in consumption; they are also interested in philanthropic efforts, whether on their own part or on the part of the organizations they patronize. For this reason, millennials can be described as both social activists and consumers.

For business enterprises, new approaches toward the enhanced inclusion of consumers in philanthropic engagements can be explored. For nonprofits, the concept of consumer charity could become even more pronounced going forward. With the line between philanthropy and consumerism continuing to blur, a key strategic question emerges: are there specific products that millennials could be offered, with proceeds deployed to advance a nonprofit agenda? Some nonprofits — including TOMS Shoes and Warby Parker — have already explored this path with measurable success, offering a model worth examining more broadly.

References

Gautler, A., & Pache, A. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343–369.

Maier, F., Meyer, M., & Steinbereithner, M. A. (2014). Nonprofit organizations becoming business-like: A systematic review. Nonprofit and Voluntary Sector Quarterly, 45(1), 72–83.

Valor, C. (2006). Consumers' responses to corporate philanthropy: Are they willing to make trade-offs? International Journal of Business and Society, 6(1), 11–26.

Yngfalk, A. F., & Yngfalk, C. (2019). Modifying markets: Consumerism and institutional work in nonprofit marketing. Marketing Theory, 20(3), 343–362.