Not-for profit organizations (NFP's) have three main sources of revenue -
grants, individual donations, and corporate sponsorships - and they need to
know all of them to maximize their return. Over the last year and a half as
the economy has dwindled as the unemployment rate increases, individual
donations have decreased due to less discretionary income being available.
This has led to tremendous competition in the grant making world, thus
making it very hard and cumbersome for NFP's to secure funding. And, if they
are so lucky to, the grants are often very restricted and have lots of
reporting standards.
Yet, as the economy has gotten worse, one marketing category pertaining to the
corporate industry has increased - cause marketing (CM). In 2009, CM was
one of the few marketing areas to actually increase in overall spending by
3% (Cause Marketing Forum), and it's fully expected to increase more in
2010. These recent articles provide further justification for the trend -
click here
& here .
Why are companies gravitating towards cause marketing? One reason is
economic. As traditional advertising and sponsorship budgets are
decreasing, cause marketing presents a very efficient way to spend a
company's marketing dollar. Through cause marketing (CM), brands are able
to create value marketing benefits, just like in any other marketing
program, event, or promotion. Yet, cause marketing presents two additional
benefits that aren't typically available through traditional marketing. CM
presents enormous consumer benefits to brands as 87% of consumers will
choose a socially conscious brand over a non-socially conscious brand,
assuming price and quality are constant (IEG Sponsorship Report).
Additionally, brands are able to get tax benefits through cause marketing if
they are dealing with a 501(c)(3) organization. Thus, cause marketing
presents companies with an opportunity to get marketing, consumer, and tax
benefits under one spend. Efficiency.
Timing is the other reason for this trend. As consumers, we are very
conscious these days about brands they buy and we often go out of our way to
do so. Consumers want to know how brands are giving back and how the
companies they support are relating back to their communities. Companies
are realizing this and as evidence of consumer trends, brands can be seen
spending more locally as opposed to nationally based sponsorships or
partnerships. Brands are spending locally because it presents an authentic
and direct way to communicate and impact their consumers. A very different
rationale than 10 years ago.
Regardless of size, all organizations can tap into this trend and create
innovative funding models. Here are some simple tips:
- Leverage your on the ground activities, programs, databases, and direct
communication to people to your advantage and tap into the cause marketing
budgets.
- Package your non profit organization as a valuable socially conscious
platform.
- Spread out your sources of revenue; go after all three sources but know
the rationale and difference of them all
- Market your non profit like a brand
So, it is very important for NFP's to be aware of these trends and to
leverage it in order to increase revenue potential for your organization.
Cause marketing presents a great way for your organization to innovate and
create sustainability for your sources of revenue.
Harrie Bakst
Harrie Bakst is the president & founder of Carnegie Sports & Entertainment,
Inc., a leading agency specializing in cause marketing & corporate social
responsibility. For more information, visit www.carnegieSE.com
The organization that I run (the Lower East Side Harm Reduction Center) has been around for over 15 years. We provide much needed services to the HIV/AIDS population in our City, many of whom are current or former substance users. We started out as purely syringe exchange program and have grown not only in size, but in capacity to provide many needed services. I read your article, but began to wonder 1)how cost marketing might benefit an organization such as ours and 2) are there any examples of how cost marketing may have played a role in supporting what may be considered an organization that provides successful, and what some may judge as controversial work.
Comments
Not-for profit organizations (NFP's) have three main sources of revenue -
grants, individual donations, and corporate sponsorships - and they need to
know all of them to maximize their return. Over the last year and a half as
the economy has dwindled as the unemployment rate increases, individual
donations have decreased due to less discretionary income being available.
This has led to tremendous competition in the grant making world, thus
making it very hard and cumbersome for NFP's to secure funding. And, if they
are so lucky to, the grants are often very restricted and have lots of
reporting standards.
Yet, as the economy has gotten worse, one marketing category pertaining to the
corporate industry has increased - cause marketing (CM). In 2009, CM was
one of the few marketing areas to actually increase in overall spending by
3% (Cause Marketing Forum), and it's fully expected to increase more in
2010. These recent articles provide further justification for the trend -
click here
& here .
Why are companies gravitating towards cause marketing? One reason is
economic. As traditional advertising and sponsorship budgets are
decreasing, cause marketing presents a very efficient way to spend a
company's marketing dollar. Through cause marketing (CM), brands are able
to create value marketing benefits, just like in any other marketing
program, event, or promotion. Yet, cause marketing presents two additional
benefits that aren't typically available through traditional marketing. CM
presents enormous consumer benefits to brands as 87% of consumers will
choose a socially conscious brand over a non-socially conscious brand,
assuming price and quality are constant (IEG Sponsorship Report).
Additionally, brands are able to get tax benefits through cause marketing if
they are dealing with a 501(c)(3) organization. Thus, cause marketing
presents companies with an opportunity to get marketing, consumer, and tax
benefits under one spend. Efficiency.
Timing is the other reason for this trend. As consumers, we are very
conscious these days about brands they buy and we often go out of our way to
do so. Consumers want to know how brands are giving back and how the
companies they support are relating back to their communities. Companies
are realizing this and as evidence of consumer trends, brands can be seen
spending more locally as opposed to nationally based sponsorships or
partnerships. Brands are spending locally because it presents an authentic
and direct way to communicate and impact their consumers. A very different
rationale than 10 years ago.
Regardless of size, all organizations can tap into this trend and create
innovative funding models. Here are some simple tips:
- Leverage your on the ground activities, programs, databases, and direct
communication to people to your advantage and tap into the cause marketing
budgets.
- Package your non profit organization as a valuable socially conscious
platform.
- Spread out your sources of revenue; go after all three sources but know
the rationale and difference of them all
- Market your non profit like a brand
So, it is very important for NFP's to be aware of these trends and to
leverage it in order to increase revenue potential for your organization.
Cause marketing presents a great way for your organization to innovate and
create sustainability for your sources of revenue.
Harrie Bakst
Harrie Bakst is the president & founder of Carnegie Sports & Entertainment,
Inc., a leading agency specializing in cause marketing & corporate social
responsibility. For more information, visit www.carnegieSE.com
Hello Mr. Bakst...
The organization that I run (the Lower East Side Harm Reduction Center) has been around for over 15 years. We provide much needed services to the HIV/AIDS population in our City, many of whom are current or former substance users. We started out as purely syringe exchange program and have grown not only in size, but in capacity to provide many needed services. I read your article, but began to wonder 1)how cost marketing might benefit an organization such as ours and 2) are there any examples of how cost marketing may have played a role in supporting what may be considered an organization that provides successful, and what some may judge as controversial work.
Thank you
Rev Raquel Algarin www.leshrc.org
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