Tag Archives: nonprofit branding

  • 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

  • 22 August 2012
Brand Your Nonprofit (Not Your Cattle)

Brand Your Nonprofit (Not Your Cattle)

via SSIReview

Branding is a dirty word in the Nonprofit sector. Nonprofit leaders are often skeptical of the For-profit associations that branding evokes - pursuit of monetary gain, corporate vanity or a tool for competitive differentiation. The rules of For-profit business don’t apply to Nonprofits so why should the branding not be different also? Nathalie Kylander and Christopher Stone of the Stanford Social Innovation Review want to re-brand Nonprofit branding in their report, The Role of Brand in the Nonprofit Sector.

Kylander and Stone suggest a new framework, the Nonprofit Brand IDEA - Integrity, Democracy, Ethics and Affinity. These original branding priorities are representative of Nonprofit organizations in a way that the For-profit branding model fails to understand. Research by Kylander and Stone revealed four sources of pride within the Nonprofit sector; “pride in the mission of an organization, pride in participatory planning, pride in the values that define organizational culture, and pride in supportive partnerships.” The IDEA framework is built on these characteristics. Integrity - Brand integrity is all about the Nonprofit’s mission; getting your internal identity and external image aligned so that both are serving the mission. It’s about ensuring that the branding strategy is synchronised with the organization’s goals going forward. When your brand matches your mission, your mission is reinforced by every instance of branding. When your house is in order, you can fully focus your efforts on your cause.

Democracy - Brand democracy is trusting your members in their portrayal of your organization’s identity. Social media makes it impossible to police every mention of your organization. Instead of attempting to single-handedly control your brand, empower your members by representing your brand with a clear and consistent identity. For large organizations, setting templates and parameters can be a useful guide for encouraging members to get involved. If your branding strategy is well formulated, your members will be able promote it with confidence, resulting in a consistent message.

Ethics - Brand ethics is about ensuring your internal identity and external image are in sync with your values and culture. Ethics is about branding representing your organization in a way that reinforces your inherent values and does not undermine them. It is about maintaining dignity in your branding and not resorting to underhanded tactics in an effort to boost short-term gains ahead of long-term relationships. Kylander and Stone provide an explanatory example:

We heard many stories of lapses in brand ethics, such as using pitiful photographs of an organization’s beneficiaries to motivate donors. Yasmina Zaidman, communication director at Acumen Fund, contrasts these exploitive images with Acumen’s tagline “Seeing a world beyond poverty.” Acumen avoids “images of poverty that … dehumanize the people whom we want to actually help,” she says, instead promoting images of “pride and dignity.”

Affinity - Brand affinity is working alongside other brands and celebrating the collective effort ahead of individual interests. Affinity is about collaboration and the promotion of partner brands alongside your own. Organizations that encourage and participate in brand affinity will be more likely to receive offers for partnerships in the future, benefiting their cause from the increased exposure that collaboration brings to all involved.

The IDEA framework shines light on the differences between For-profit and Nonprofit branding. Branding is incentivised within For-profit organizations to increase profits, whereas Nonprofits’ pride in their cause leads them to branding. While there remains considerable crossover in the tools for branding utilized by both For-profits and Nonprofits, the emphasis should not be on differentiation, but instead on the benefits of a recognisable brand. Branding will ultimately be what you make of it and organizations that take the time to plan a cohesive strategy and apply effective branding will see the rewards in increased exposure and recognition for their organization. The easier you make it for people to understand, remember and connect with your Nonprofit, the more your cause will grow. Branding is one of your greatest assets toward this end.

 

Peter