You might have an affinity credit card in your wallet, those credit cards that make charitable donations to the organization associated with it every time you make a purchase. It’s a great way to help your favorite cause. But is an affinity credit card the right kind of card for your business?
Done wrong an affinity card can muddle the message you’re giving your customers. But done right an affinity card offers a great way to communicate to customers that your company cares.
Marketing your business in concert with a charitable cause is known as cause marketing. Many businesses engage in cause marketing by sponsoring a charity walkathon, a Little League team, or a fundraising dinner. The hope is that customers and prospects will see the company’s name in connection with this activity and form a positive impression about its commitment to the community.
In the same way, cobranding your credit card with a charity’s name can be an effective form of cause marketing. If you decide to use an affinity card for business, choose your charity carefully. Using an affinity card could backfire on a business owner. For example, your charity could be involved in a major scandal. Do your homework to make sure the charity you choose to support is legitimate and well-run. If it turns out to be shady or ineffective and that news hits the papers, it can reflect badly on you. You can use search engines such as GuideStar, Charity Navigator, or the Better Business Bureau’s Wise Giving Alliance to make sure the charity is not the subject of complaints.
Determine the charity’s efficiency. Ask what percentage of donations goes directly to its programs vs. the amount it spends on overhead. Any legitimate charity should be willing to provide you a copy of its tax form on request, which will disclose these figures.
Also, make sure your charity is not controversial. For example, if you do a lot of business in China, choosing a charity that’s working for a free Tibet could be a huge public relations disaster. Selecting a charity that focuses on any controversial issue has the potential to upset customers and vendors who disagree with your point of view.
Remember that your business credit card may be presented to any number of people in your community in connection with your business, so choose an affinity partner that you can be sure will reflect well. You’ll probably want to brand all of the credit cards your business uses to one charity to simplify your cause-marketing message and not cause confusion. If you have many employees, one way to build positive company goodwill is to involve them in choosing the charity your company will support.
Another good option is to identify a charitable cause that relates to your industry in some way. Examples might include a homebuilder whose business card’s purchases benefit a housing charity such as Habitat for Humanity or a diaper service where the card generates donations to the March of Dimes. These types of intuitive choices communicate that you care about your customers.
But make sure you read the fine print. Just because an affinity card reaps benefits for your favorite cause doesn’t mean it’s necessarily the best deal. Take a hard look at the annual fee and interest rate any affinity card carries before signing up. In some cases, fees and interest can be substantially higher for these cards. They may have appealing introductory offers but then introduce high fees or spike their interest rates later. Especially if you tend to carry a balance on your card, it might be less costly to simply write a check to your chosen charity each year and promote your company’s charitable giving in other ways.
Business reporter Carol Ticecontributes to several national and regional business publications.