Nonprofit Collaboration With Luxury Brands: Positive and Negative Effects for Cause-Related Marketing

Luxury brands and nonprofit organizations (NPOs) increasingly engage in cause-related marketing (CRM) relationships. However, most previous studies analyzed CRM effects from a corporate, rather than a nonprofit, perspective. This study reverses the viewpoint to determine if luxury brand partners are beneficial for NPOs. Using a fictitious CRM cooperation between Plan International Germany and the Hotel Adlon Kempinski Berlin, two experimental studies obtained responses from 791 customers and 259 nonprofit employees/volunteers. The results show that partnering with a luxury brand can be beneficial because it enables the NPO to raise additional donations, enhances attitudes toward the nonprofit brand, and increases the chances of acquiring wealthy customers as future donors. Yet negative effects also arise, such as identification conflicts, especially among nonprofit employees and volunteers. Overall, this study reveals that nonprofit managers can pursue cooperation strategies with luxury brandsas long as they consider some important precautions.