Philanthropy continues its rapid rise as a lifestyle trend that’s here to stay. According to the IEG Sponsorship Report, total dollars spent by corporate America on cause sponsorships is projected to reach $2 billion in 2016, more than a 3.5% increase over last year.
How does the popularity of cause marketing impact the way Americans approach wealth management? Here are three ways philanthropy and cause marketing are changing today’s approach to delivering financial services.
Celebrate social impact as a lifestyle. Consumers want to celebrate the good they are already doing, whether that's giving to charities, volunteering, serving on boards, recycling, attending community events, sharing with family and friends, or caring about health and wellness. Today’s savvy financial advisor understands that doing good is a big part of living a well-rounded life. It’s bigger than a checkbook; it’s a mindset, both at home and in the workplace.
Never underestimate the power of consumer choice. The financial services industry is catching on that consumers embrace the opportunity to support the causes they care about, not the causes they are told to support. For a snapshot of this trend, take a look at the growth of charitable giving vehicles that offer donors free choice, called donor-advised funds. Donor-advised funds have risen dramatically in popularity over the last several years, with donations into these vehicles growing 24 percent in 2014 alone and total assets in these vehicles reaching $71 billion by the end of 2015. For financial advisors, a turnkey donor-advised fund program offers instant credibility with philanthropic clients to boost loyalty and asset retention between generations.
If your advisor isn’t asking, you may be falling behind. Cause marketing works because consumers are loyal to companies and service providers that show a human side. For example, according to the Cone Communications/Ebiquity’s 2015 Global CSR Study, more than 90% of consumers express a preference for brands that support a cause. Surprisingly, even though 98% of affluent Americans give to at least one charity a year, only 14% of advisors offer philanthropy tools and advice to their clients, according to the 2014 U.S. Trust Study of High Net Worth Philanthropy conducted in partnership with the Indiana University Lilly Family School of Philanthropy.
The bottom line? If you’re a financial advisor and you think cause marketing doesn’t apply to you, think again. And if you’re a consumer, you can be confident that if you’re working with the right financial services provider, you won’t ever need to set aside the causes you love.