Marketing for Not-For-Profit Service Organisations

by smartamarketing

Brian Monger

The emergence of organised marketing efforts in not-for-profit organisations deserves special attention.  Marketing principles are applicable to both profit-seeking and not-for-profit organisations.

Not for profit institutions represent a significant part of our economy. The not for profit sector accounts for over 20 per cent of GDP in Australia. There are over 100 000 not for profit organisations in Australia.  Institutions such as universities, museums, charitable organisations, cultural centres and religious institutions are not motivated by profit-maximising goals in providing services to the public.

The nature of not-for-profit services

Types of not for profit organisations:

  • Cultural (for instance, museums, operas, and symphonies).
  • Knowledge oriented (universities and colleges, schools, research organisations).
  • Philanthropic (foundations, charities, welfare organisations).
  • Sporting and recreational organisations
  • Social causes (environmental, consumer, feminist groups).
  • Religious (churches and religious associations).
  • Public (city, state, federal services; quasi-governmental services such as Australia Post and the various state instrumentalities such as for electricity, gas and water).

Slow acceptance of marketing in NFP organisations?

The reality is that not-for-profit organisations (like everyone else) have used marketing for centuries.  Charities have sought donors and sponsors, politicians have tried to sell their ideas universities have actively tried to recruit students, and foundations have sought out appropriate causes. These activities differ from marketing only in the terminology used. Theatres might speak of “audience building” not “promotion to increase sales”.

There has been a tendency by many not-for-profit organisations to eschew “marketing” because of its traditional association with a “commercial” profit motive. In avoiding the use of marketing theory, these organisations also forgo the benefits they might gain – customer orientation, integrated strategies, long-term thinking, and better performance and funding.

The emergence of a marketing orientation

Many not for profit organisations have adopted marketing techniques and have employed marketing managers or business managers to both attract funds and sell their services. Charitable organisations such as the National Heart Foundation use advertising to create community awareness of the dangers of heart disease and the Royal Guide Dogs Association uses direct marketing techniques for revenue generation.

Difficulties in marketing not-for-profit services

Developing marketing strategies for not-for-profit services can be difficult because of several characteristics of such services.

First, non-profits market to multiple publics since they must attract resources from donors as well as allocate resources to clients. Marketing to donors is different from marketing to customers.

A second characteristic of non-profits is the use of multiple exchanges of resources in dealing with donors and clients. Charitable organisations must deal with individuals, corporate contributors, and government agencies in trying to attract funds. They then have to allocate funds to projects ranging from public education campaigns, research and patient welfare.

A third characteristic of not for profit companies is that they are more likely to he influenced by agencies such as governments, lobbyists and other publics than are organisations with a profit centred focus.

Another reason it is more difficult to market services in the not for profit sector is that many not for profit organisations are trying to change people’s behaviour by selling ideas, such as trying to influence people not to drink and drive (TAC), not to drop litter (‘Keep Australia Beautiful-). Such goals are beneficial to society, but represent either inconvenience or added cost to individual consumers. Trying to convince people of the dangers of smoking, drinking, or drug abuse is difficult because these actions are often habitual, and, a marketing strategy is more likely to be effective when it reinforces current behaviour than when it attempts to change it.

Finally it should be remembered that some NFP marketing strategy has meant cannibalisation of other NFP orgs. The problem in getting the consumer to choose “us” sometimes means others NFP’s loosing market share (OK in the commercial world but harder in the NFP sector?).

NFP support is created through understanding what the market wants and feels and being able to give it to them.

Still another difficulty in marketing not-for-profit services is that what they have to offer is often more vague than services for profit. The benefits of air travel, telecommunications, or bank services are easier to convey than the benefits of religion, culture, or knowledge. Often the level of awareness of the activities of not for profit organisations is often low.

Finally, marketers of not-for-profit services may find it harder to control their promotional campaigns. In many cases, not for profit organisations must use space and air time that is donated by media and thus have no say as to when their ads will be shown or heard.