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Nonprofit Marketing: Fundraising and Social Causes
By Heather Gallien
When I ask a group of executive directors why nonprofit marketing is tougher than for-profit marketing, they usually shout, "Because we have no marketing budget!"
It’s true that nonprofits must work harder to find marketing dollars and spend them wisely. But it’s helpful to recognize the larger differences between, and similarities to, corporate marketing when developing a nonprofit marketing plan.
Raising Money versus Selling Products
The first big difference between nonprofit and corporate marketing is that nonprofits rarely achieve financial success by marketing to their customers. Corporate marketing is straightforward: A company markets to prospective customers, who in turn buy its products. The company’s revenues, and success, are caused by customer sales.
However, the customers of a nonprofit are people it serves. For example, the customers of a homeless shelter are the homeless people who take advantage of its low-cost housing or meals. Nonprofit services are often free, or low-cost, to customers. Customer revenue typically doesn’t cover operating expenses, much less marketing. Marketing dollars spent obtaining customers are not recouped by customer sales. But even though customers don’t generate substantial revenue, nonprofits must market to them in order to fulfill their missions of improving the lives of their constituents.
Nonprofit financial success comes from various funding sources, including private and corporate donors, corporate sponsorships, government funding and grants. Funding is the lifeblood of a nonprofit, so marketing that supports donor relationship development is often the most important expense. Build donor relationships, and the money will follow.
So, nonprofits face a dual marketing challenge: first, they market to customers who benefit from their services but don’t provide much – if any – revenue. Second, they must market to funding sources in order to thrive and continue providing services.
People often ask, "What about companies seeking investment funding? They market to potential funding sources too!" But the situations are not the same. The intent of investment funding is to successfully launch a company. Continued funding is not required once customers generate enough sales to turn a profit. But since nonprofit customer sales don’t lead to profitability, nonprofits must continually seek new funding opportunities to survive.
Promoting Causes versus Promoting Products
The second big difference between nonprofit marketing and corporate marketing is that companies market products and services while nonprofits often market social causes.
For example, a youth services nonprofit that offers mentoring and after-school programs isn’t merely marketing its services. The nonprofit is ultimately marketing its social mission to ‘enhance the lives of disadvantaged youths’ to potential customers, funding sources and the public.
Many nonprofits offer entertaining services, like arts and cultural attractions. But at their core, they still seek to fulfill a broader social cause, which may be something like ‘expanding Colorado’s access to artistic diversity in the performing arts.’Companies use marketing to create demand. Nonprofits use marketing to create engagement. Social causes gain power when people get involved, volunteer, donate money and support the mission. That’s why the most important objective of a nonprofit marketing program is to engage the community and rally support.
Marketing Mix – Same Bag of Tricks, With Cost Advantages
Like corporate marketing plans, a nonprofit plan must be uniquely crafted based on its mission, services it offers, audiences it serves, where it is located and available funding sources.
All organizations benefit from an integrated mix from the marketing bag of tricks:
- Mission definition and brand strategy
- Brand image (logo, brand standards)
- Advertising
- Public relations
- Web site development and Internet marketing
- Direct marketing (mail and Internet)
- Printed brochures and communications
- Grassroots, guerilla and word-of-mouth initiatives
- Legislative advocacy that supports the cause
- Proposal development (for funding, vs. contracts for corporations)
Nonprofits tend to skimp on brand image, including necessities like a professional logo and brand standards for consistency across communications. This is an important investment, because brand image can make – or break – financial contributions. Inconsistent designs and messages confuse people – how could they know that those three completely different direct mailers with mismatching logos, designs and headlines came from the same organization?
Nonprofits do have an advantage over for-profits: They can obtain marketing services at low rates, or for free. Many marketing firms will donate all, or part, of their work if you give them lots of public recognition. Nonprofits can also develop sponsor relationships with local media in order to trade ad space for sponsor recognition. This is a great way to include advertising in your marketing plan without spending big bucks!
Bottom line: Even the smallest nonprofits should establish a marketing plan and budget, just like for-profits. Developing a habit of planning your marketing now will pay off when you have the luxury of a larger budget in the future.
Heather Gallien is the President of Idée-Force, an integrated marketing agency that specializes in nonprofit, cultural and tourism marketing. Heather frequently speaks and writes about branding and the evolution of today’s marketing trends
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