There is no excuse for ignoring business marketing principles when it comes to your non-profit. Marketing is critical to sales and is included in every good business plan. While non profits are not trying to make money for products in a capitalist sense, they need to make money for their services to exist. Marketing your non-profit should be an important part of your overall business strategy.
First, view your work as what it really is – viable, value-added community services that stimulate economic growth and have a legitimate place in the American economy. It is difficult to sell social services for which there is no tangible product reward to the buyer as in a traditional business sense, which makes it even more critical to market your non-profit’s services as necessary community assets.
If you are in the process of revamping your non-profit’s fundraising strategy, you should allocate an appropriate portion of your budget to marketing and develop an integrated strategy to market your work based on your program goals and prospect base. You need to determine what your budget is, how to fund it, and how to frame your strategy based on marketing fundamentals.
1. Determining and funding your marketing budget
The Small Business Administration recommends that small businesses allocate at least 7-8% of their revenue to marketing, yet the average non profit spends no more than 3% on marketing.
You might be trying to diminish your overhead to look good to funders, and toward that end you made the mistake of erasing as many “overhead” dollars possible (Overhead myth anyone?). Scratch that thinking and make at least 8% of your revenue goal marketing, and then use these tips to fund this line item:
2. Recruit capacity funders
More and more funders understand the need for “capacity”, “development”, “overhead”, and “investment” and offer dollars toward those budget expenses. Try using these keywords in your prospect research if you do not have those funders on your development strategy list. Then ask them to fund your marketing budget.
3. Use smart wording
You can be even more creative about what you name your marketing line item for those more traditional thinking funders that focus intently on overhead costs. Specifically, call it ‘outreach and communications,’ put it in program expenses, and sell it in your proposals as critical to program success in that the public needs to be aware of your mission and work. It does!
4. Find corporate sponsors you align with
Get corporate sponsors to underwrite the costs of your marketing strategy. Since it is messaging that you are blasting to the public, you can find a few good corporate sponsors that are strategically aligned with your audience to market with you and pay for your efforts. Do not beg them for a charitable donation, but instead write them a business proposal selling your marketing strategy as a value-added component to theirs!
5. Mind your marketing basics: The 4 Ps for NPs
Marketing is very simple in theory – it is connecting the “market” for your services/product to the services/product. It only has four basic components to consider, known as the 4 “P”s: product, people, place, and price. Those four aspects should be considered in building your strategy, or “marketing mix”. Ask yourself these questions:
What are you selling? This can be very difficult for non profits to determine, but your products are simply the gaps you are filling in community need. For example, if you are a community arts organization, and you are fulfilling a community need to stimulate economic growth by providing trade programs to connect local artists to businesses, your product is your service of practical employment.
Who are you serving and who needs to know? This arts organization is serving three groups of people – the artists, the businesses, and the community at large by stimulating economic growth and discouraging unemployment. It needs to think about specific demographics of the local businesses that need artists, the artists themselves, as well as the general population demographics of the community.
Where is your work? This is not straightforward for most non profits. Really define your “target community” as a radius from your non profit base – a neighborhood, a city, a county, etc. In the case of the community arts organization, they would ask where the businesses are with which they work, and where do the artists that come to use their services live?
How much is your product worth? Non profit services can calculate a cost in two steps. First, divide your overall program budget by number of people directly and indirectly served, calculating a real cost for services. Second, calculate a real cost to society of not providing the services. How much unemployment are the artists collecting, for example? If one artist training costs the arts organization $400 a month, but that artist stops collecting $2000 in unemployment as a result of a job placement, as well as starts earning $3500 a month in her new job and can buy more in the local economy, the service is value-added to the community at up to $3100 for a $400 investment!
After you have considered how big your new marketing budget should be based on revenue goals and what your marketing mix is, you can focus on designing logistics for your marketing plan.
The articles that follow in this series will help you understand and identify the most effective strategies to market your non profit as a legitimate community business as opposed to a dollar-by-dollar begging charity, ultimately helping you raise more money as well as better share your message!