In The Not-For-Profit World
has earned its place in the not-for-profit world. But marketing and development
are not the same. Marketing is about exchanging
goods and services for money. Development is about relationships
it is not about money.
organizations have taken to emulating the moneymaking practices of corporations.
These days, for example, most charitable institutions market themselves,
a practice that once was anathema. This powerful trend has three primary
causes: the decrease in funding from the public sector, the increase in
competition for funds among an expanding number of not-for-profit organizations,
and the rise in funder pressure for not-for-profits to operate in a "businesslike"
Immersed in a capitalistic
and materialistic society, development professionals were able to effect
a huge change in outlook and behavior after a relatively brief and easy
transition. We now are accustomed to calling our constituents "clients"
and "customers." We segment our "target market" and develop strategic
marketing plans. We focus on the exchange of goods or services for money.
In all these efforts, we are aided by board members and other volunteers
from the for-profit world who are eager to embrace activities that to
them are comfortable and familiar.
The effects of the
rise of marketing on the attitudes and practices of development professionals
have not always been for the better. We have refined to a science the
execution of direct mail, telemarketing and special events, making them
predictable and rote. Unfortunately, the way we imagine, plan and carry
out these activities can lead us to think of our donors as numbers and
objects. Too often, we aim our communications at the masses rather than
at individuals. In our sophistication, we risk depersonalizing and devaluing
our donor relationships.
In this article,
I will attempt to make clear what I believe is a key distinction between
development and marketing. They are not the same thing, and ought not
be confused. Also, I will describe what I believe has been the impact
of marketing on donor relations. Finally, I will outline both the pitfalls
and the proper role of marketing for not-for-profit organizations, in
the realms of social entrepreneurship, cause-related marketing, special
events and telemarketing.
IS IT MARKETING
It is important for
fund raisers to keep in mind that, while marketing can generate substantial
funds for charities, it is significantly different from development. Let
us begin by defining what we mean by the two terms.
the promotion of the exchange of goods or services at a mutually agreeable
price. It involves a tangible, reciprocal transaction between a seller
and a buyer.
is the process not-for-profit organizations use to secure financial support
and advance their missions. It involves a transaction between a donor
and an institution that is based on intangibles, like faith and trust.
By contributing to organizations, donors hope to sustain their personal
values and advance their future hopes.
VISION AND MISSION
In Jeopardy the
answer would be, "vision and mission." Any veteran development professional
will know the correct question: "What motivates donors to give to charity?"
The fund raiser's
ability to express with clarity and passion an organization's vision and
mission lies at the heart of the development process. We design and present
our message to appeal to the hearts and minds of prospective donors, and
the strength of our appeal determines our success.
With the rise of
marketing in the not-for-profit world, development professionals have
come under increasing pressure to move beyond the traditional confines
of development work. The practice of marketing increases the time and
attention fund raisers must give to the various methods of fund raising,
and has decreased the time and attention we can focus on cultivating donors
and attending to their needs. The task of connecting our organization's
mission with our donors' interests has become more difficult and complex.
Marketing tends to force us to keep foremost in mind the result of our
efforts money. In the process, we sometimes forget that our donors
care more about what we propose to accomplish with money.
In the development
process, an exchange occurs between an organization and a donor, but the
exchange is difficult to value and quantify. Ultimately, it is grounded
in the organization's vision and mission, and in the ways these things
resonate with the donors' values and goals.
The donor's response
relates directly to the development professional's ability to express
an organization's vision and mission in a compelling way. The medium of
exchange is the donor's belief that, by helping to finance an organization's
programs, the donor's values will be given shape and voice. The quality
of communication necessary to effect a significant level of trust, belief
and investment becomes difficult to achieve without meaningful personal
encounters. Such encounters are difficult to achieve when the time of
development professionals is consumed by marketing activities.
While working to
improve our business practices, not-for-profits need also to maintain
and emphasize our greatest strengths: vision and mission. "Not-for-profits
are generally stronger than for-profits in terms of the strength of their
vision," Joseph Quigley writes, in his book Vision. "All visions
and strategic plans are value-based and...values are the most fundamental
element of the vision."
Does marketing have
a legitimate role in the not-for-profit world? Of course it does. Many
practices are both distinct from development and legitimate sources of
additional revenue for organizations with goods or services to sell. Marketing
clearly is here to stay, and can do a considerable amount of good.
A growing realm of
marketing in the not-for-profit world is social entrepreneurship. It has
its own organization, The National Center for Social Entrepreneurs, which
helps not-for-profit groups to formulate strategic marketing plans for
business ventures with social purposes.
The National Center
for Social Entrepreneurs believes that not-for-profits need to become
less dependent upon government funds and charitable contributions as they
strive to achieve financial stability while meeting community needs. It
encourages organizations to build on their core competencies and earn
revenue through, among other things, service fees, product sales, consulting
contracts, and training and education courses.
In this context,
the center maintains, it is appropriate for a not-for-profit to speak
of customers and clients, to develop a marketing plan and, in general,
to act like a business. It points out, however, that not-for-profit marketing
efforts are driven by a dual purpose. They seek not only to tap the marketplace
but also to advance a charitable mission.
must make their customers aware that the funds they provide are critical
to programs that are not self-supporting. Likewise, organizations should
remind customers that it needs charitable contributions in addition to
earned revenue. The organization should, in fact, consider customers as
prime donor prospects.
marketing is another appropriate source of additional revenue for
not-for-profit organizations. Cause-related marketing links the causes
of a not-for-profit to the marketing approaches of a corporation, typically
one in the consumer-products industry. The practice connects charitable
partners directly to corporate promotions designed to enhance brand identity
and boost product sales.
A corporation chooses
a charitable partner based on the strength of the organization's name
identity and the size of its constituencies. Charities receive contributions
based on units of a product sold or a straight fee for the privilege of
using the organization's name. Occasionally, the organization's development
staff is encouraged or even required to call on retailers to promote the
joint marketing program, leading them to serve the corporation involved
as an extended sales staff.
can earn a significant financial return from such activities. The organizations
need to keep in mind, however, that cause-related marketing is strictly
marketing. It is not development. Corporations pay their "contributions"
from their marketing budgets, not their charitable budgets. In entering
into these agreements, charities must realize that they are essentially
allowing the use of their names for a fee.
should enable an organization to achieve an increase in public awareness
of its goals and mission. Before signing a marketing agreement, not-for-profit
organizations should stipulate that corporations include a tag line or
brief phrase that communicates its mission every time the organization's
name is printed, broadcast or otherwise used in promotions.
marketing programs involve television and radio broadcasts, public events,
press kits and the like. Organizations should obtain the right to include
information about their missions and programs in these venues.
The increases in
public awareness produced by cause-related marketing efforts do not always
translate into higher contributions to an organization. They do provide
fund raisers with an opportunity to make the most of follow-up development
between marketing and development are often blurred around special
special events are essentially consumers. An exchange occurs between sponsors
and attendees at such events, with a value that people can readily ascertain.
The Internal Revenue Service has specific regulations regarding the valuation
and deductibility of attendance at special events.
Special events create
visibility for an organization and enhance its image. Typically, however,
they do not increase the donor base. Post-event appeals by mail or telephone
generally are unproductive.
The reason is that
few people who attend special events are truly engaged with the sponsoring
organization's vision and mission. A runner enters a charity race because
she wants to stay fit. A consumer attends a hospital resale shop's "next-to-new
sale" because he wants to find bargains. The attendees are pursuing their
own interests, with little concern for the sponsoring organization's objectives.
further complicate the issue. Often the budget for such activities lies
within the domain not of a corporation's foundation but of its public
relations, community affairs or marketing departments. Even so, many corporations
view event sponsorships as gifts to charity, whatever their public relations
or marketing value.
Too often, only a
small portion of the cost of sponsorship accrues to the benefit of a not-for-profit
organization. In fact, the costs of an event on average consume between
35 and 50 percent of gross proceeds.
Special events are
popular with volunteers, for two reasons. First, the "fund-raising aspect"
of special events "legitimates the entertainments themselves," according
to Prince and File in The Seven Faces of Philanthropy. "The process
of putting on a large event provides [volunteers] with the means to develop
an extensive support and social network of like-minded people, which can
be tapped again and again to further philanthropic and social goals."
Many who attend special events do not have close relationships to the
organization's mission. They come to enjoy the dinner and the other trappings
of a gala, and to rub elbows with a select group of people.
consciously or unconsciously, advocate special events as a way to avoid
the hard work of fund raising. "We can raise money through a special event
without ever having to ask anyone for a gift" so the thinking goes.
When such thinking really takes over, an organization focuses on concessions,
ticket and T-shirt sales, exhibition fees, sponsorships and the like,
and neglects to develop donor relationships. Such an organization expends
tremendous effort on raising funds from many people who for the most part
have no relationship with the organization and no interest in its mission.
Fund raisers should
view most special events as marketing activities. As such, they have obvious
advantages. Through a special event related to its mission such
as a book sale benefiting a library or an art auction to endow a museum's
acquisition fund an organization makes new connections and broadens
its constituency. Many consumers at these affairs may already be donors;
all should be regarded as prospective donors.
With any special
event, we should take every opportunity to inform donors of the organization's
mission and programs. Every speaker, advertisement, printed program and
ancillary support of the event should promote the mission in a compelling
way, one that leaves a lasting impression that can have an impact on later
Special events also
can be used effectively to recognize people who have made major contributions,
financial and otherwise, to the organization. They also can present effective
opportunities to acquaint prospective donors with the organization's mission
and to cultivate personal relationships. In these contexts, the focus
is on developing donor relationships, with a secondary emphasis on raising
COULD WE HAVE
A MOMENT OF YOUR TIME?
professionals do not like to use the term telemarketing to describe raising
funds for organizations by telephone. It is the term donors use, however,
and we might as well use it, too.
Many volunteers hate
telemarketing. Personally, they do not appreciate receiving solicitation
calls at home; they view them almost as invasions of privacy. They have
no wish to become a caller themselves; it puts them uncomfortably close
to asking a real, live person for a gift. If they promote telemarketing
at all, they favor hiring students or professionals.
can be an effective tool for not-for-profit organizations. It often achieves
good results with current and lapsed donors, and with others who have
had experiences with an organization, such as university alumni or former
More personal than
a letter, a call gives a not-for-profit organization an opportunity to
initiate or strengthen donor relationships. A conversation also gives
constituents an opportunity to give responses.
especially well when the prospective donor is alerted to the impending
call, and when the caller is both personally involved with the not-for-profit
organization and enthusiastic about its programs.
be either a marketing technique or a development method. Three telemarketing
techniques place it firmly in the marketing arena: cold calling, rigid
conformance by the caller to a script, and offers of premiums. In contrast,
the telephone becomes an instrument of professional fund raising when
it is used to further relationships, to advance the organization's ideals
and programs, and to express a genuine interest in donors' evaluations
of the organization's services, image and mission.
DO WE NOW UNDERSTAND
Clearly, I believe
that marketing has earned its place in the not-for-profit arena. It can
be an effective tool in raising funds that are critical to our organizations
and their programs.
As far as possible,
however, we fund raisers need to keep the focus of our efforts on advancing
our organization's vision and mission among its donor constituencies
and that is the primary work of development.
For the last time,
let us not confuse marketing and development. Marketing is all about an
exchange process a quid pro quo goods or services for money.
Development is all about relationships. It is not about money.
Seven Major Marketing Pitfalls
Staff and volunteers
of not-for-profit organizations need to realize that special events, cause-related
marketing and telemarketing have several built-in pitfalls. These marketing
activities often create habits and attitudes that spill over into traditional
development functions, causing problems.
Here are seven of
the most common marketing pitfalls discussed in terms of their
root causes, resulting effects and potential solutions.
1: We focus on our organization's short-term needs, giving short shrift
to its long-term vision.
A concentration of effort on marketing mechanics without appropriate regard
for organizational or donor interests.
By failing to develop sustained relationships with donors, we lose opportunities
for significant financial contributions the kind that can have
a major, lasting impact on our organization and the people it serves.
Volunteers and staff never get off the marketing merry-go-round. Often,
they end up "burning out."
When planning events and other marketing activities, keep your decision-making
focused on your organization's mission and vision. Educate volunteers
to understand the potential of securing significant financial support
by developing authentic donor relationships.
2: In our zeal for special events, cause-related marketing
and telemarketing, we lost sight of our mission.
The sheer size of our marketing efforts overshadows and ultimately preempts
Our message and mission are muddled.
Take steps to keep message and mission foremost in the minds of volunteers.
Hold a retreat to review them. Use them as the basis for creating an annual
development plan. Start each meeting with the mission statement. Include
the statement in all communications with donors and volunteers.
3: We apply the principles of mass marketing to our development efforts.
Thinking of fund raising as a democratic process usually as a result
We buy into the commonly believed fallacy, "To reach a goal of $100,000,
just get 1,000 people to give $100.
Analyze your donor and constituent base. Determine the potential to raise
funds through development methods only. Explain to volunteers that effective
development efforts invariably produce about 90 percent of contributions
from about 10 percent of donors. In short, reeducate your staff, volunteers
and other constituencies on the primacy of development.
4: Our staff and board "experience a disconnect" over marketing.
Staff pressures on the board to volunteer for marketing labors.
Board members resent the pressure, seeing marketing work as an inappropriate
use of their talents. In time, the board allows the staff to take over
development work as well as marketing tasks.
Once board members relinquish personal responsibility for fund raising,
changing their attitudes and practices is immensely difficult. You will
need to do whatever it takes to make the change. Begin by assessing each
board member's individual attributes, time availability and access to
potential donors. Use an outside expert to facilitate a board retreat.
Before the retreat, conduct a confidential survey of board members. (It
will often reveal dissatisfaction with current roles and results.) Work
continuously with board members to build on their fund-raising strengths.
5: We raise the bulk of our funds through marketing activities.
Too much time and attention devoted to marketing, leaving insufficient
resources for traditional development functions.
Our development program stalls, never progressing to major giving and
planned giving. Donations from board members and other volunteers drop.
The organization is shortchanged; and the staff, board and donors never
experience the real reward of giving the satisfaction experienced
by both giver and recipient.
Get back to the development basics. Work with the board to establish a
major gifts committee. Select new board members who can inspire and contribute
major gifts. Help board members to identify a handful of major-gift prospects.
Develop and communicate cultivation strategies. Arrange for an outside
consultant to explain to the board its fiduciary responsibility to secure
financial support for the organization at an appropriate expense-to-benefit
6: We spend too much money on marketing.
Marketing is expensive. Effective marketing efforts commonly consume 35
to 50 percent of gross proceeds (a percentage that balloons without rigorous
The organization's overall fund-raising costs escalate. In time, we put
our credibility with our constituencies at risk.
Establish (or reestablish) strict expense and revenue budgets for the
fund-raising operation. Budget expenses at 25 percent or less of contributions.
Apply these standards to marketing as well as traditional development
7: The effort to manage volunteers overwhelms staff resources.
Marketing efforts are "volunteer intensive."
Our staff spends the bulk of its time recruiting, training and supporting
volunteers, diverting resources that might have been invested more productively
in traditional development endeavors.
your volunteers to the annual fund and other customary fund-raising activities.
Not all marketing volunteers will be interested in or suited for development
work, but the volunteers you successfully retrain will produce greater
results and a more committed donor base.
Michael R. Maude,
Partners In Philanthropy