Peter Drucker tells us that, “Napoleon said there were three things needed to fight a war. The first is money. The second is money. And the third is money. That may be true for war, but it’s not true for non-profit organizations. There you need four things. You need a plan. You need marketing. You need people. Any then you need money.” Let’s start by considering marketing. If your non-profit is funded by an endowment or a wealth donor, this may not be of much interest. For most of us it is an issue which must be addressed in order to sustain our activities.
So many think that they don’t need marketing. In fact, they consider the term unsavory. We are doing good in the world not selling soap suds. But marketing is more than advertising. Marketing is how you establish a relationship with all your stakeholders including clients, the community, and your sponsors.
In the commercial business market, revenue is generated by selling a product or service to a consumer. The marketing effect develops around determining a customer’s need, developing a product or service to satisfy that need and delivering it at a price affordable to the consumer. It starts with market research to understand the specifics of the need and the size of the market segments involved. The product or service is then developed in a way that it can be provided at a reasonable cost and yield a profit for the firm. The final step is to determine the means of delivery to the potential customer. Those means vary widely from in-store retailing to shipping through the internet.
Nonprofit marketing uses a very different model. Let’s start with a person who has an illness. We might refer to this person as a client. The client needs very little motivation to seek medical advice from a physician. The physician, depending on the nature of the illness, may decide to admit the client to a hospital. Although the hospital may be a non-profit, that has little to do with the process being considered. At this point, the non-profit becomes involved. They provide support needed by the physician and hospital to treat the patient or client. That might include providing financial support for the service or the purchase of equipment and facilities.
In the commercial business, the customer is the person who receives and pays for the product or service. In the non-profit world, the customer does not completely pay, a third party now gets involved. That third party is a donor. The donor is not the beneficiary of the product or service but is the source of income. That third party may be an individual, a group of individuals as in a foundation), or a governmental agency. In the case of a hospital, donors may fund the construction of the facility, purchase equipment or supplement the cost of service.
The marketing effort is, therefore, to reach the donors and convince them on the worth of the cause. The potential donors need to be identified and a means found to reach their hearts. Income in the commercial world comes from the sale of a product or service. It comes from the individual who directly benefits. In the nonprofit, the source of income is the donor. That donor does not benefit economically but must benefit emotionally.
Let’s take as an example the Alzheimer’s Association. Many of us are aware of a family member, friend or associate who has seen stricken with this horrible decease. We have watched helplessly as these people have slipped aware from us mentally. Beyond supplying loving support, there is an option of contribution to the medical research which will help understand, prevent and cure the disease. The personal benefit to us as a donor is the satisfaction of knowing we are helping.
In our planning process we need to know:
- Who are our potential donors and sources of support?
- What psychological needs are satisfied by providing the support?
- Where are these potential donors located?
- What is the best way to reach them?
- How do we effectively tell them our story?