Why Brands Are Rethinking Their Political Giving

SMITH BRAIN TRUST – This week, in the days after a pro-Trump mob stormed the U.S. Capitol seeking to overturn the election, dozens of corporations announced that they would halt or suspend donations to the Republican members of Congress who voted against certifying the votes.

The move comes amid long-mounting pressure on brands to disclose and own their political contributions and corporate social responsibility activities.

Maryland Smith’s Amna Kirmani says the stakes are amplified for brands taking political stands.

Kirmani, the Ralph J. Tyser Professor of Marketing, is editor of the Journal of Consumer Research and former Editor-in-Chief of the Journal of Consumer Psychology. She has studied extensively how consumers interact with brands based on their corporate social responsibility actions.

The present political turmoil has been building in an environment in which brands have already spoken out or opted to stay silent. So, recent history is useful for guiding brands, Kirmani says.

“For some time now, consumers have been saying that they will buy more from brands that take an active stand for causes consumers care about,” she says. “And that they will avoid brands – or actively boycott – brands that take a stand against relevant causes.”

“Trump opponents want brands to take stands on the following issues: 1) condemning the Capitol insurrection; 2) calling to impeach Trump; 3) withdrawing money from the Trump brand,” she says. “The companies that have already taken such actions are gaining reputation benefits from Trump opponents but risking backlash from Trump supporters. Companies have to assess their own morals as well as the risks involved given the views of their target markets.”

While few brands broadly telegraph their political spending activities, consumer-facing companies have become more vocal about their corporate social responsibility actions in recent years, Kirmani says. Consumers, particularly younger ones, demand it, wanting companies to show their values by donating to causes they align with.

“Millennials are a driving force behind this change because they want to see their brands and companies to take a stand on social issues,” says Kirmani.