Tuesday, July 13, 2010

Brand and Reputation are Critical for Non-Profits

Brand and reputation management are often focused on corporations, but there is tremendous upside for non-profits to focus on their brand and reputation.

Non-profits exist on the basis of support of their donors. Without public support, the non-profit ceases to exist. In the current economic downturn, non-profits have had particularly trouble in two areas: 1) fewer dollars from donors; and 2) fewer dollars from corporation. The two are interrelated. The latter--support from corporations--is more problematic for many non-profits since the dollars were larger and there was an expectation of continuing support, which has dwindled, if not gone away entirely.

Let's start with the idea that people have less disposable income. That means that there are fewer dollars for them to give to their favorite organizations, including universities, religious institutions, hospitals, etc. The "pie" is shrinking, but the same number of organizations are looking for support. Add to this, the added pressure that has come from disasters, including the Gulf Coast, Haiti, and others that have sought public and corporate donations. So, the market has become more competitive.

Whether or not they like to admit it, non-profits have historically operated on a principle of "noblesse oblige". That is, that those with wealth will feel an obligation to help those less fortunate. That underlying motivation may still be there, but people must choose more carefully than ever where the money should go. And, there have been a lot of abuses by non-profits of the money they have received and a lot of scams. So, trust is eroding as well, leading to some people simply unwilling to give for fear that their money will not reach its intended objective.

When competition heats up, brands predominate. Brands create the attributes and associations that cause people to see differentiation. If the pie is shrinking, non-profits need to get very serious about differentiating from other organizations and having a compelling value proposition for the donor, whether it be a person or a company.

The brand and reputation also are important for companies. Donations are changing from philanthropy to strategic social responsibility programs at many companies. This means that a non-profit needs to be very attuned to the objectives of corporations around them and match themselves to the strategy of the company. Gone are the days when they can simply expect a company to give them money with no expectations. Social responsibility programs should be tied to the company's strategy and toward the interests of the company's stakeholders. Non-profits need to understand the goals of the company and match themselves appropriately.

My last few consulting engagements have been with non-profits. They have been the most successful projects I have done in some time because we have enabled the organization to think more broadly and become more "corporate" in their thinking, which has benefited them in the way they have approached their sources of revenue and made themselves more competitive in the market.

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