Cause-related marketing (CRM) typically refers to the marketing strategy of firms that combines public welfare and marketing, with the dual motives of philanthropy and profitability. This paper constructs a stylized model that two competitive firms implement CRM strategy, and then extends this model to the supply chain context. Additionally, we examine the impacts of firm competition, government subsidy policy, and philanthropic motives on the firms, consumers, and social welfare. Our main results follow. (1) The intensified competition between firms enhances the firms' economic benefits and public welfare, increases the investment of firms in social welfare, and prompts the firms to be willing to take more social responsibility in CRM campaigns. (2) The government subsidy policy can improve social welfare and the firms' investment in public welfare; however, the firms may be aiming at getting government subsidies rather than stemming from the social responsibility they assume. (3) In a supply chain scenario, the consumer surplus is lower despite lower product prices. (4) The firms can achieve a win-win situation of economic and social benefits if they properly retain public welfare motives in CRM campaigns.