Tag Archives: empowering nonprofits

  • 14 February 2014
Should advertising be viewed differently in the nonprofit sector?

Should advertising be viewed differently in the nonprofit sector?

Last week one of our blog readers requested to find out more information regarding advertising in the nonprofit sector. His exact question was, "How can a nonprofit effectively market without advertising?". I began to generate this list:

  1. Public Service Announcements
  2. Direct Mail and Email
  3. Word of Mouth
  4. Promotional Items
  5. Online Advertising
  6. Social Media

Although great avenues for spreading cause awareness, these tools could be limiting. An illustration of these possible limitations can be found on the website TED in Dan Pallotta’s video titled, 'the way we think about charity is dead wrong'. Dan Pallotta is best known for creating the multi-day charitable event industry with the long distance Breast Cancer 3-day walks, AIDS Rides bicycle journeys, and Out of the Darkness suicide prevention night walks. The video 'the way we think about charity is dead wrong' went viral as Dan described how nonprofits are rewarded for how little they spend and he asks us to start rewarding charities for their big goals and accomplishments, even if that comes with increased expenses. In the video Dan was quoted as saying,

"Charitable giving has remained stuck in the US at 2% of GDP ever since we started measuring it in the 1970s, that is an important fact because that tells us that in 40 years the nonprofit sector has not been able to wrestle any market share from the forprofit sector and if you think about it how could one sector take market share from another sector if it's not really allowed to market"

The problem, he explained, is that we have a different set of rules for charities that puts them at a competitive disadvantage in 5 areas:

  1. Compensation - Because of the stark, mutually exclusive choice offered to prospective leaders between doing very well for yourself and your family and doing good for the world, the nonprofit sector is not able to attract or keep the best talent.
  2. Advertising and marketing - Because nonprofits are punished for advertising or marketing like for-profits, the nonprofit sector has not been able to increase its market share relative to the for-profit sector with respect to GDP.
  3. Taking risk on new revenue ideas - Because of the public relations nightmare that would result from an innovative but unsuccessful fundraising endeavor, nonprofits cannot implement daring new ideas needed to exponentially grow the necessary revenues to tackle the big social problems.
  4. Time - Because the public and funders have little patience for nonprofits that fail to immediately, effectively and efficiently create a measurable social impact (unlike for-profit start-ups that are allowed by their investors to take years to return a profit), nonprofits are forced to adopt conservative strategies that do not allow them to patiently invest in building scale.
  5. Profit to attract risk capital - Because nonprofits cannot promise profits to investors in order to attract capital to fund new and innovative ideas, nonprofits are starved for growth and risk and idea capital.

501(c)(3) organizations are certainly allowed to advertise and market, but the "punishment" Dan is referring to is the public's view on donations being spent on advertising. This view leads to an underinvestment in advertising. Below is a chart taken from the Nonprofit Quarterly of the nine largest nonprofits ranked by Forbes and the percentage of advertising recorded as overhead.

NPQ_ad_overhead_chart

As you can see more than half of the organizations treat less than 15% of their advertising as overhead. YMCA and Goodwill has not recorded any advertising as overhead because they classify it as program expenses. Presumably, treating advertising as overhead is not correct. According to accouting rules, if an organization's mission is to raise awareness about an issue, associated costs are classified as program expenses, not overhead. Nonprofits can market without advertising effectively, but would increasing advertising be beneficial? That depends on a multitude of factors and is really up to the organization and stakeholders to decide. We would love to know your thoughts on advertising in the nonprofit sector. Would you feel comfortable knowing .90 cents of your dollar donated went to the funding of an advertising campaign?

  Thanks for reading! -Rebecca

  • 25 July 2012
The WebServes Blog Rises

The WebServes Blog Rises

Hello and welcome to a new season of the WebServes blog. My name is Peter and I will be your WebHost today. We at WebServes believe the work we do is important. By empowering other nonprofits through technology, we ourselves are making a contribution and contributing feels good. Like right now, I’m contributing to this blog - Yes it’s intimidating and yes creating new content takes mammoth motivation because it really is so much easier to share, like or +1 somebody else’s content. Sharing is simpler and faster than creating original content and genuinely important since sharing content is kinda the whole point of the Internet. But, somebody has to create content for the rest of us to share so I’ll take the plunge today, if only to allow my conscience to share, like and +1 in peace for the next few days. So what’s it all about? This blog is about a lot of things, because WebServes is about a lot of things. I’ll paste some formal text here to explain:

WebServes empowers nonprofit organizations, start-ups and small businesses through technology. We are a nonprofit Technology Service Provider that enables others to expand their reach and spread their message online. In the modern age, establishing and maintaining an online presence is a vital and cost-effective way to communicate and interact with constituents. WebServes’ expertise empowers clients to harness the power of the Internet.
With my blogging cap firmly back in place, WebServes has two specialities - The Web and Serving. We understand the World Wide Web in all its intricate glory. Well, we understand it insofar as can be understood. Like astronomers, we can make sense of about 4% and the rest is dark energy or dark matter. But, we’ve really got that 4% nailed down. With our grasp of the Internet, we serve you. We use our expertise, know-how and can-do-attitude to build brands, websites, marketing solutions and offer a whole range of web services to non-profits, start-ups and up-starts. We use our Internet savviness to offer clients a complete and effective online identity. Our clients are numerous and each is unique in their needs. Our understanding of the Web enables us to serve clients with the online resources they need to empower their organization.   That’s what WebServes does but what does this blog do? That’s a good question and one that, for now, eludes total understanding. This blog is a living thing and will evolve over time. For now, we hope that it will be a resource for visitors to learn about exciting new developments in the greater Internet domain, the nonprofit landscape as well as here at WebServes. So far our team are working on topics under the following headings:
  • Insights into the uses of Internet technology
  • Best practices among nonprofit technology leaders
  • Reflections on emergent technology developments
  • Why sneezing panda will outlast charlie bit my finger
We will also be using this blog as an opportunity to share stories and videos from outside sources that we consider deserving of endorsement (if you can’t beat ‘em, link ‘em). We’re 96% sure that’s what this blog will be. Maybe 4% is more realistic. We hope that you will come back often and tell us how we’re doing. Peter