Sorry Seth, but you don't understand the nuances of nonprofit marketing!

Seth Godin posted a blog entry yesterday claiming that charitable agencies need to place a greater focus on the community benefits that come from making a donation. His assertion is that nonprofits don't do a good job of promoting the personal reward that comes from supporting one's community, instead placing too much emphasis on providing tangible benefits in exchange for giving.

While his intentions are honorable, Seth's assessment and understanding of nonprofit marketing are surprisingly incomplete. 

I’m not suggesting that giving out a nifty tote bag will drive donations, but it may be enough to convince someone to give one organization their charitable dollars over another organization just as deserving. On the other hand, it may work against you, since many donors don’t want charities to spend their money on gifts. They want them to spend their money on the mission. But every donor is different.  And while many may claim they are donating to be philanthropic, just as many donors still take full advantage of the tax deduction they receive for their donation.  Does that make their gift any less honorable?  Of course not.  But they're still recieving a tangible benefit in exchange for their gift.  The only difference between the tote bag and the tax deduction is that the tax deduction is coming from the government, not the charity.

My point is that Godin's argument is overly simplified and doesn’t take into account the complexity of convincing a donor to choose one charitable organization over another.  We live in a very competitive environment, and every charity is fighting for its survival, just as corporations are.  There are a lot of good charities that fund great causes.  Which one should you support? A charitable agency can pitch the personal rewards of giving all day long, but if the message doesn't resonate with donors or prospects, a group sometimes has to shift gears and find another way to gain access to charitable dollars. If that happens to come in the form of a Persian rug discounted at a silent auction…so what? It’s bringing in money that at the end of the day is still helping an important cause.

Many businesses do not give to charity purely for the philanthropic rewards that come from doing so.  Corporate Social Responsibility is a strategic business decision to help position practitioners as good corporate citizens in order to convert their customers and prospects into brand advocates. In many cases the community benefits are secondary to the corporate reputation.  By allowing employees to take days off for service projects, many businesses aren't just trying to make a difference in the lives of others.  They're also seeking stronger employee loyalty in an effort to reduce turnover and improve productivity.  So what?  Does that make the corporate effort any less meaningful?  Of course not.  So why shouldn't a charitable agency promote the tangible benefits of supporting it, whether it be in the form of an improved bottom line or a tote bag?

There are many reasons why people give to charities. While the mission will always be (and should always be) the driving message, an organization cannot survive using a one size fits all strategy. It has to understand the motivations of the individual. Of all people, I would think Seth Godin should understand that.

Personally, I completely disagree with Seth's assessment that many nonprofits are ineffective in communicating the community benefits of giving.  I think that by and large, most charitable agencies do a very good job of it.  However, those subjective rewards are not always enough, especially in a challenging economy where every competitive advantage can make a difference.  It requires that nonprofit agencies diversify their sources of income by finding new and innovative ways to generate revenue. 

At Goodwill of Greater Washington, the community benefits continue to be the primary message used in its cash appeals, but they are a secondary message in its retail and donated goods appeals. The majority of Goodwill's retail customers aren’t shopping in its stores to benefit the charity or the community. They’re shopping to benefit themselves and their families.  They're trying to find quality, low cost goods that will allow them to stretch every dollar.  Many of Goodwill's household goods donors aren’t donating to help the community either.  They’re donating out of convenience because they don’t want to throw their items in the trash or because they want a tax deduction.  And that's fine with Goodwill!  So for a marketer to ignore the true motivations behind the reasons a donor gives is simply foolish.

I can tell you this with 100% certainty:  If congress were to eliminate the tax deduction for the donation of household goods, those donations would all but dry up, and our landfills would overflow.  Look at what happened after the tax laws on vehicle donations changed only a few years ago. Donations dropped by 40% virtually overnight.  Was that because charities did a poor job of promoting the community benefits of donating a car?  Of course not.  It was because the tangible benefit for making the gift disappeared.

So while I appreciate Seth's sentiment, he should give nonprofit marketers a little more credit for understanding the nuances of securing disposable funds in a very challenging economy.  The importance of the mission is critical, but it simply isn't enough anymore.

Nonprofits Need to Start Playing More in the Corporate Sandbox

Because I transitioned into the nonprofit sector from the corporate sector, perhaps I view this subject through a different lens than many of my peers; but I still see one major problem with nonprofit marketers:  They tend to spend too much time associating with other nonprofits.

For the record, I'm not suggesting that they stop doing so.  As a matter of fact, I recently attended the AMA/AMAF Nonprofit Marketing Conference in Washington, DC which provided a great opportunity for nonprofit marketers to share best practices and learn from both peers and experts.  They were even kind enough to present me with a tremendous honor as the 2011 National Nonprofit Marketer of the Year!  It was a wonderful experience and I'm quite certain I'll be back.

So, I'm not recommending that nonprofit marketers stop associating with other nonprofit marketers.  However, I am recommending that they start spending more time associating with corporate marketers and business leaders. 

How many nonprofit marketers have attended regional business lunches or events and been seated at the "nonprofit table"?  When that happens, I feel like I'm being placed at the kiddie table at Thanksgiving dinner.  I've begun specifically requesting that I not be placed at the nonprofit table.  While I find great value in my nonprofit relationships, I'm not going to secure funding for my organization from other nonprofits, unless they are foundations whose goals happen to align with our mission.  The greater value to me as a nonprofit marketer is in developing relationships with the corporate sector; positioning my organization as an impactful regional business and community leader, not just a nonprofit leader.  I want to leverage the national power of the Goodwill brand to strengthen my organization's regional influence.

Strategic partnerships that will enhance our brand, while driving revenue and reputation will more frequently result from alignment with corporate partners who have deep pockets and tremendous reach.  Not with other community based organizations that have databases composed almost exclusively of individuals passionate about any cause other than our own.

Strong nonprofit marketers should be joining groups like the AMA, chambers of commerce, boards of trade and other regional business associations, giving them greater opportunities to network with decision-makers who can have a direct impact on their mission, reputation and revenue.  But taking on leadership roles is critical!  There is little value in joining for the sake of joining. You MUST get involved.

Working side by side with corporate leaders and proving your capable of achieving results will increase the likelihood of getting corporations to listen and respond positively to your "partnership" proposals when the time is right.  You'll also dispel the negative stereotypes associated with nonprofits simply looking for handouts.

Let's face it, businesses want to associate with other strong businesses, whether they are for-profit or nonprofit.  If powerful corporations (with good brand reputations) see it as a benefit to align themselves with you, then you've already achieved a major victory.  The stronger your reputation, the louder your voice becomes.  The louder your voice becomes, the more people will hear you.  The more people that hear you, the greater the impact your message will have.  The greater the impact of your message has, the more people want to associate with you. The more people want to associate with you, the more revenue you are going to generate.  The circle never ends, it just gets bigger and perhaps a bit more complex as more corporate partners join the ranks.  However, the bigger the circle becomes the more leverage you have as well. 

Komen is a case study in how successful this type of strategy can become. They have done such an amazing job building brand equity that they are dictating sponsorship terms, not the other way around. I know...I worked with them when I was on the corporate side, and I understood the value the brand association with Komen would have on our reputation.

However, that brand strength didn't result organically. It took a great deal of work on Komen's part to position themselves as a change agent who could make things happen. They didn't do that by aligning themselves exclusively with other nonprofits. They did it by engaging the corporate sector, positioning themselves as a global leader in breast cancer research and then leveraging their brand reputation to further enhance their brand reputation, leading to critical corporate and foundation funding.  However, I think Komen is the exception, not the rule. 

Nonprofits need to have a better understanding of the power of their brands.  Unfortunately, few nonprofits place an emphasis on brand and reputation building.  In my opinion this is a result of few nonprofit leaders understanding the value and importance of a brand. 

The Millward Brown 2010 Value D Study found that 81% of consumers make purchasing decisions based on brand, while only 7% make purchasing decisions based on price.  What this tells me is that donors and corporations aren't afraid to give money to good nonprofits.  They're afraid to give money to good nonprofits they don't know or trust.  And that's what brand building is all about!

In today's economic climate businesses are placing a greater emphasis on corporate social responsibility not just to build brand loyalty, but to protect their brand reputations.  They need to align themselves with strong nonprofits because they want to convert nonprofit constituents into brand advocates. There is tremendous opportunity here for innovative nonprofit marketers who can find a way to get themselves "a seat at the corporate table". One of the best ways to do that is to start playing more in the corporate sandbox.  Go where they go, read what they read, find ways to lead corporate leaders rather than waiting for them to lead you.  Building your nonprofit brand starts with building your personal brand.  If you're a strong regional leader, your organiztion will be perceived similarly.

So if you want to make a real and measurable impact on your organization, don't stop networking with other nonprofits.  Just be sure to place as much emphasis on networking with your corporate peers.  Your seat at the table awaits you.