Nonprofits compete in a marketplace of ideas, attitudes, and beliefs, where marketing serves the mission and supports both the programs (value proposition) and the organization itself. Marketing encourages a member of the target audience to take action, it influences behavior. Marketing begins with defining the target audience and gaining understanding of its members’ values, needs, and wants; it acknowledges the environment, including the presence of direct and generic competition; it focuses on defining an exchange, honing and delivering the message (communication); and it ends with action by members of the target audience.
There are four broad classes of management decisions for which an understanding of the target audience is especially crucial.
1) How to group total target audiences into similar groupings for purposes of marketing planning ( a descriptive understanding of characteristics of the market at a given point in time).
2) Which segments to choose as target markets and how many resources to allocate to each (understanding of associations between market characteristics and behaviors).
3) How to position the desired behavior or behaviors as a desirable value proposition ( understanding of causation).
4) How to translate the value proposition into specific elements of the offer, its costs, how it will be delivered, and how it will be communicated (ability to explain causation).
The nonprofit marketing manager must study target audiences to learn
1) whether the recommended behavior is in the segment’s awareness, consideration and choice sets, and
2) if the behavior is in the various sets, who the competitors are.
Philanthropists enlist capitalists to change the way operating funds are acquired and capacity is increased. Philanthropy is taking its cues from Wall Street and Silicon Valley. The language of finance is so common that it is sometimes hard to tell the difference between an investment conference and a fund-raiser. Grants are referred to as investments and public-private partnerships as innovations. Funds used to buy vans, computers, and buildings are called growth capital.
“It’s not just the language that is changing,” said Antony Bugg-Levine, chief executive of the Nonprofit Finance Fund. “The actual distinction between the two sectors, for-profit and nonprofit, is starting to collapse.”
The shift stems from a new generation of philanthropists, like Bill and Melinda Gates, Pierre and Pam Omidyar and Steve and Jean Case, hoping to stretch their dollars. As they see it, the pool of philanthropic assets – even at a whopping $4 trillion-plus – is too small to make a dent in seemingly intractable social problems like malnutrition, chronic homelessness, water quality and sanitation. So they are trying to find ways to reuse existing financing and to attract new types of capital.
“If we really want to produce transformational change, change in a disruptive, exponential kind of way, there is going to have to be more than philanthropic dollars involved,” said Steve Goldberg, a social investment adviser at Caffeinated Capital, which advises investors, governments and nonprofit’s.
Giving Tuesday is an excellent marketing strategy to make overall gains for the nonprofit sector. There is still competition among nonprofit’s for this days donations, but the idea of setting aside a day to support charitable organizations is a sector-wide benefit.
Among the most closely watched efforts was Baltimore’s, as the city rallied to raise the most of any metropolitan area. The city reported that it surpassed its $5-million goal by about $500,000 for its inaugural “Bmore Gives More” campaign. More than 200 nonprofit’s, businesses, and individuals took part. The Associated: Jewish Community Federation of Baltimore, which was the most successful charity in the country last year on Giving Tuesday, raised $1.3-million yesterday, up from last year’s $1-million.
The Corcoran Gallery of Art is now an example of the effects of a competitive environment and how the decisions of boards are altering that environment, in this case not for the better of the institution. Sad, and somewhat surprising.
To conclude this discussion I would like you to review a trend that threatens to alter the nonprofit landscape and that is social entrepreneurs who they are and how they are changing the ways nonprofit missions and outcomes need to be evaluated and invested in with expectations for returns, similar to investing in a publicly traded company.
Cause marketing – a marketing strategy where a portion of sales is donated to a charitable organization. However, unlike philanthropy money spent in a cause-related marketing scenario is considered an expense and is expected to show a return.
Social responsibility – how an organization manages its social and environmental impacts. Both for-profits and nonprofit’s have a social responsibility. There are several good examples here of corporate social responsibility: Yahoo Small Business Corporate Social Responsibility
For the response to this conference I would like you to discuss the competitive environment of a chosen nonprofit using the information found on this topic, specifically:
1) a list of five competitors – you may be surprised to find yourself listing nonprofit’s with unrelated missions and for-profit entities
2) how philanthropy (the act of giving financial or physical assets to charity) and other sources of funding might be used by your nonprofit
3) what communication medium your nonprofit might use to reach target audiences for Giving Tuesday
4) would your nonprofit benefit from a partnership with other nonprofit’s or would their mission and identity be compromised, such as is happening to the Corcoran Gallery of Art?