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Nonprofit MarketingNonprofit Nonprofit MarketingMarketing

Dr. ChunDr. Chun--Tuan Debbie ChangTuan Debbie Chang

Introduction• Nonprofit marketing => the use of

marketing tactics to further the goals and objectives of nonprofit organizations

• Nonprofit marketing tactics (narrow)=> advertising, public relations, and fund-raising, etc.

• Nonprofit marketing activities (broad) => gathering and processing information for decision-making, government relations, board member, donor, and volunteer relations, etc.

Introduction (Cont.)

• Nonprofit marketing (broader) => a management orientation which helps a nonprofit look beyond its internal operations and programs to the external world that affects the organization.

Introduction (Cont.)

Chief Executive or General Manager

Operations

Marketing

Government Relations

Management Control

Finance

Purchasing

Human Resources

Development (Fundraising)

Dimensions of Nonprofit Marketing

• Resource Attraction => need to attract donations of time, funds and gifts-in-kind.

Vo lun tee rs

Tim e

D on o rsO rg an ization a l

D on o rsInd iv idu al

Fu nd s

A ttra c tionR eso urce

Re so urc e Attr ac tion F un ction

Dimensions of Nonprofit Marketing

• Resource Attraction => need to attract donations of time, funds and gifts-in-kind.– Donations of time (recruitment and

retention of volunteers).

– Donations of funds (contributions from organizations and individuals).

– In-kind donations

Dimensions of Nonprofit Marketing

• Important because:

– it provides services that are not performed by the business sector.

Importance of the Nonprofit Sector • Important because:

– it provides services that are not performed by the business sector.

• Boys and Girls Clubs of Americawww.bgca.org

• Nonprofit universities

• Charities

• Hospitals

• Etc

Importance of the Nonprofit Sector• Important because:

– it allows for citizens to participate in their communities collectively.

Importance of the Nonprofit Sector

• Important because:

– the number of nonprofit organizations is growing

• in the U.S. the number of nonprofits grew by 312,366 from 1997 to 1,397,263 in 2004

Importance of the Nonprofit Sector• Important because:

– it involves a lot of money.• U.S. individuals, estates,

foundations and corporations gave an estimated $240.72 billion to charitable causes in 2003.

Importance of the Nonprofit Sector

Table 1.1U.S. Charitable Giving in 2003

Segment Giving Level($ billions) % Change From 2002 % of Total

Individuals 179.36 +2.5 74.5Bequests 21.60 +12.8 8.2Foundations 26.30 -2.5 10.9Corporations 13.46 +4.2 5.6

$240.72 99.2%

Importance of the Nonprofit Sector• Important because:

– It is an international phenomenon• Canada = 161,000 nonprofits and Canadians

donated $8 billion to its nonprofit sector.• 2004 - England and Wales = 166,129

charities in with revenues of £34.567 billion.

• Scotland = 27,000 charities• Northern Ireland = 7,500 charities • Australia (2000) about 380,000 nonprofits

Key Concept: Exchange

FirmClient

Fees, donations, time

Services, tax benefits,“warm glow,” prestige,fulfillment of duty, etc.

Marketing focus

Nonprofit Marketing• Marketing: Plan, price, promote, and

distribute an NPO’s programs and products

• Marketing tasks– Define target markets

• Who should our clients (or donors) be?– Link to these clients

• How do we reach them?• What “price” attracts them?• How do we communicate with them?

Market Segmentation• Segmenting:

– Grouping with needs, wants, motivations, values, behavior, lifestyles

Charity giving personality traits, incomeage, donation frequency

25-34 Below 24

60-70

Target market

45-60

Targeting Messages to Demographic Groups

DEMOGRA PHICS TO TARGET

FUNDRAISING FOCUS

SENSE OF COM-MUNITY

CHARITIES ARE MORE EFFECTIVE THAN GOV’T

SENSE OF DUTY

HELPED YOU IN TIMES OF NEED

TAX BENEFITS

RELIGIOUS REASONS

LOW INCOME

X X

YOUNGER

X

PRACTICING FAITH

X X

MARRIED

X

SINGLE

NONWHITE

X X

WOMEN

X X X X

CONSERVATIVES

X

VOLUNTEER X X X X X

Ref.: Van Slyke 2002

Why Is NPO Marketing Difficult?

• NPO “culture” (i.e. attitudes about efficiency, credibility, commercialization, etc.)

• Unrealistic goals• Unreliability of resources (I.e. volatile

donations)• HR issues (staff vs. volunteers)

Competition• Competition for what?

– Members/clients– Donors/volunteers/do

nations– Inventory (e.g. books,

art works, etc.)• Competition with

whom?– Other NPOs– For-profits– Governments

• Identifying competition– Similarity of prizes

(management perspective)

– Similarity of services (client/donor perspective)

– Common competitor: inaction (e.g. no medical care)

Strategy Evaluation

For-profit success measures– Profit– Customers

• Nonprofit success measures– Service level + quality

+ access– Clients + donors +

volunteers + trustees

Communication Tools• Explicit

communications– Annual reports– Newsletters– Press releases– Brochures– Direct mail– Media advertising– Telemarketing– Special events

• Implicit communications– Pricing– Products– Distribution

E-philanthropy• Harvard Business School’s Initiative on Social Enterprise:

By 2010, 1/3 of all philanthropy will take place over the internet…

• …but at present, only $10m is given in e-philanthropy each year ($1 for every $13,000 given)

• E-philanthropy firms (e.g. Charitableway) failing

Ref. Brooks 2002

How Web-Savvy Are Nonprofits?

Percentage of nonprofits Use email 87.9% Have web access 87.6% Have website 66.3% Accept donations through website 17.3% Plan to accept donations 38.2% Sell merchandise through website 14.6% Plan to sell merchandise 17.3%

• Large NPOs are not more likely to have email or web access, but are more likely to use the web for fundraising

Ref. Zimmer 2002

Maslow’s Pyramid

NPO Branding

What’s the first thing that comes to mind when I say ___?

•Helps children around world

•UN•Christmas

Cards•Celebrities

• First on scene• Assists in

Disaster The Red Cross Symbol

• Global• Blood Drives• Medical aid• On the News• War• Tents and

blankets

Dimensions of Nonprofit Marketing

BecomingKnown

FavorableImage

Differentiation

1st Step

2nd Step

3rd Step

Positioning Tasks

Dimensions of Nonprofit Marketing• Planning => nonprofit marketers develop

plans to help the nonprofit achieve its strategic goals and its mission.

• Positioning => implementing marketing activities aimed at influencing the public’s perception of the NPO; to develop a specific image of the NPO

• Brand => the name, logo, and symbols that uniquely identify an NPO and distinguish it from other organizations.

Marketing Mix• Product

– The programs or services provided• Price

– What it costs to participate• Place

– Where the products, programs, and services are available (distribution system)

• Promotion– Promotion of product, program, or service

Promotion: Messages Types

Promote Refute

Abstract “Giving is vital for society”

“Your gift might be small, but you’re doing your part”*

Concrete

“Giving makes you feel good”*

“Your gift can achieve X, even if it’s as small as Y”

*Found to be most effective

Ref.: Clary

Advertising Appeals of NPOs

• Rational appeals• Emotional appeals• Fear appeals• Humor appeals• Moral appeals

"Smoking isn't just suicide. It's murder ."

Foot-in-the-door Techniques

• Every little bit helps. – Even a penny will help.– Even a cent will help.– Even a dollar will help.

Marketing Research

• Define research objectives• Do preliminary research• Design the formal research• Do fieldwork• Analyze the data

Donation Behavior in Taiwan

0%

10%

20%

30%

40%

50%

60%

70%

80%

2004(n=806) 72.5% 71.7% 70.6% 74.9% 66.4% 78.6% 59.6% 78.4% 79.0%

2005(n=1008) 55.9% 61.0% 51.0% 50.0% 47.0% 64.0% 39.0% 59.0% 66.0%

Total North Middle South Male Female Age 20-29 Age 30-39 Age 40-55

Affiliation of Charitable Donation

0%

10%

20%

30%

40%

50%

60%

70%

80%

Lighted-up Future Perspective forLife (n=394)

55.8% 54.3% 53.6% 49.0% 45.9% 43.7% 41.9% 28.9% 27.9%

Hunger(n=941) 64.8% 60.5% 57.8% 61.5% 51.1% 57.6% 57.0% 34.8% 44.7%United Way (n=812) 51.4% 57.6% 51.7% 57.1% 48.6% 47.4% 55.5% 36.7% 21.8%

Feelwarm

Helppeoplein need

Helpchildre

n

Credible

activity

Makegooduse of

Stimulate

donatio

Easyaccess

financial

transpa

Generate

sympat

%=total of %=total of ””AgreeAgree””+Strongly +Strongly AgreeAgree””