Marketing needs vary based on fundraising costs (not revenue!)
How are nonprofits different from each other? Don’t be tempted to differentiate nonprofits based on revenue (many nonprofits receive funding directly from governments). Nor by cause (the deliverables are the same, regardless of the content of the message).
The easiest way to compare is by the amount of money they spend on fundraising costs. Why? Its a proxy for staff expertise on marketing. And its a proxy for the diversity of their revenue streams (which require more marketing sophistication).
- Small nonprofits (< $50,000 on marketing and fundraising costs and time) have predictable marketing needs.
- At $50,000, mid-sized nonprofits will likely hire part-time staff with formal fundraising responsibilities and will need help in all areas.
- Large non profits ($500,000+ on marketing and fundraising costs and time) have marketing needs based on managing a department of marketers whose roles overlap with Board members and volunteers.
Small vs big non-profits
The top 300 non-profits in Canada, which are large enough to employ a marketing department, are very similar to marketing departments in for-profit corporations in terms of culture, projects, use of marketing language and the use of formal, strategic marketing plans. Large nonprofits are already doing lots of marketing – the questions are “how do we work smarter?” Here are the top 3 marketing priorities for large nonprofits.
However, most non-profits are small, service-oriented organizations that need tactical advice. Typically, one person does everything, prints small quantities, has fewer rules which means your volunteering can make a bigger difference. Here are the top 3 marketing priorities for small nonprofits.
Focus on the deliverables, not the marketing process
The process of marketing starts with reviewing competitors, key features, audience segments to determine a Unique Selling Proposition. This conversation is identical with all nonprofits. But with large nonprofits, your deliverable would be an internal document which contains the strategy; middle management would then work with subcontractors (e.g. graphic artists, writers, webmaster) to fulfill the strategy. With small nonprofits, I have to do everything because they cannot afford subcontractors. If I promised an internal document as my deliverable, no one would show up at the meeting! Instead, I promise them a page on their website. That is more tangible and they are willing to spend the time.
Why is nonprofit marketing misunderstood?
Without the process of an annual marketing plan, it is disorienting for marketers to give advice. We generally help out with one-off projects (e.g. a new brochure, a new website, a donor letter). With many competing priorities, there are few opportunities for a strategic marketing review.
Many non-profits think that promotion is all are there is to marketing. They have a point – the other 3 “Ps” rarely apply. Many do not realize that there is a science side to marketing.
Marketing Plan vs 3 Best Practices
It is always worthwhile to review the template of a traditional marketing plan to ensure you think about all important issues. However, in small non-profits, it may not be worthwhile to spend the time writing a formal marketing plan. Unlike large for-profit corporations with multiple product lines, most non-profits are service-oriented organizations with a single product line that need tactical advice. A lot of the sections in a formal marketing plan do not apply (e.g. price, product and distribution). As well, most nonprofits are not accustomed to the formality or the “lingo” of a strategic marketing plan, unless you have an audience of experienced marketers who are willing to give you feedback. Instead, your audience may be more receptive to the 3 best practices for large nonprofits or an annual promotion audit for small nonprofits.
What do they want more of?
My first question to clients is “What do you want more of?” All non-profits need more:
- recipients (e.g. an arts organization selling tickets to a performance, a seniors home).
- volunteers (to help provide the service).
- donors (to help pay for a service that recipients cannot afford)
- members (the head office of an association which receives dues from members)
- awareness (for non-profits with advocacy and education in their mission)
Ask your nonprofit to place them in descending order. Or even better, quantify each out of 100.
Good marketing needs the foundation of good strategy, good governance and good HR
The marketing challenge for many nonprofits is similar, despite the fact that their causes are different. The deliverables are similar (website, brochure, PowerPoint, etc). So why do some marketing projects go more smoothly than others? Usually, it has nothing to do with marketing. For those nonprofits who have concrete strategy, good governance and fair HR practices, a marketing project can proceed smoothly. For other nonprofits, it may be a better use of their time to fix their other “foundational” issues before spending their time on marketing.
What is the role of the Board of Directors?
Their role is not to “do marketing”. Instead their role is to clarify and protect the brand. They need help understanding what are the questions they should be asking so they can make decisions. Your role to provide them with the right questions to ask.
Top 8 definitions:
segregated funds – funds donated for a specific purpose.
CRA – Canada Revenue Agency
social purpose enterprise – it is a department within a nonprofit. The purpose is to make profits to fund part or all of the ongoing operations of the non-profit. For example, making a profit on widgets, to fund advocacy activities which do not generate donations. The definition of social purpose enterprises is evolving, so expect confusion.
in-kind donations vs money donations– donors receive a tax receipt for both. An in-kind donation refers to the products the company sells e.g. excess inventory that is donated.
corporate sponsorship vs corporate donations – many corporations have two budgets. One budget donates funds or in-kind products and receives a tax receipt; charities are selected based on employee interests. Another budget sponsors events or locations which are in line with the corporate brand and do not provide a tax receipt; charities are selected based on the promotional image of the corporation. Typically, the main value of a sponsorship is to the non-profit (a corporate logo on a delivery truck, logo at an event). Occasionally, some corporations engage in Cause Marketing, which is a step beyond sponsorship marketing because the value is tied more to the corporation, is managed by corporation staff, becomes part of the corporation culture and is long term, e.g. A+W with Multiple Sclerosis.
Case for Support – a multi-page proposal to request funds from a major donor (foundations, corporations). Topics should be customized for each donor and include: achievements, stories, other donors, specific request, budget, evaluation plan, etc.
Acquiring new donors vs retaining existing donors – See link for a definition of acquisition vs retention. If your non-profit asks for your help to obtain “more donations”, don’t assume that means more new donors. It may mean retaining donors. See the Donor Churn report.
Suggested reading about Non Profit Marketing:
1. Recipients: If your non-profit needs help marketing to the recipients of a service (e.g. callers to a hotline), you may be inspired by Kotler’s book “Strategic Marketing for Non-profits” which focuses on selling a service.
2. Advocacy: If your non-profit focuses on advocacy work and needs help furthering a cause (e.g. obesity, environment), consider Kotler’s book on “Social Marketing”.
3. Donors: If your non-profit needs help on marketing to major donors, check Kotler’s book on “Marketing Professional Services”. Even though this book focuses on developing a for-profit relationship, it covers topics such as acquisition vs retention, analyzing profitability and the seven P’s which are relevant for building a relationship with donors.
4. Corporate: If your non-profit wants to pursue donations or sponsorships from corporations, Kotler’s book on “Good works” gives a great overview of the issues (from the point of view of the corporation deciding how to proceed).
5. Communications: “The Nonprofit Marketing Guide” by Kivi Leroux Miller, available from libraries.
Writing stories: the power of storytelling, 3 specific inspirational plots, where to find good stories. p77-90
Media relations: positioning your non-profit as an expert source, strategies to raise your profile, how to pitch a story p111-123
External communications: content creation strategy, editorial calendar, print newsletters, e-news, p 125-140, p 196-204
Tips on Thank you letters and annual reports, p 141-150
6. Marketing Research: “Money for Good” by Hope Consulting, qualitative and quantitative survey of US donors in 2010.
There are 6 donor segments based on donating behaviour, p 22
Donors want to learn about the efficiency and effectiveness of a non profit p22
7. Social Media: “Mobile for Good: a how-to fundraising guide for nonprofits” by Heather Mansfield, available from libraries.
An easy-to-read and comprehensive summary of the static web, social web and mobile web.
8. Communications: “Non profit Management 101” by Darian Rodriquez Heyman, available from libraries.
Fundraising, strategies for major givers, how to seek a grant. p 291-340
Event Management p 459-475
Public Relations p 479-490
9. Fundraising: “Excellence in Fundraising in Canada: The definitive resource for Canadian Fundraisers” edited by Guy Mallabone et al, available from libraries.