We Can Put Our Money Where Our Mouth Is
This is a guest post by Doug Weinbrenner.
Granted, that phrase is synonymously ushered as a challenge to financially invest in proportion to the gravity of a statement. The more unbelievable the proclamation, the higher the stakes. We all know these scenarios rarely end well and usually end up on YouTube.
But what if nonprofits operated on this same premise?
Think about it.
Mission statements are some pretty audacious proclamations filled with weighty words such as “curing,” “ending,” “stopping,” “solving,” “changing,” and the list goes on. You could say donations are a wager from people who would “like to see you try.” Now obviously donations are not (usually) wagers in disbelief, but rather they are (usually) investments in a deep belief.
As a nonprofit communications lifer, I have longed to see the sector assume a posture of taking this statement very literally and start to put more money towards what an organizations “mouth” does—communicate.
The Missing Link?
This longing for increased investment in a nonprofits voice that I carried around my entire career was finally echoed and legitimized after hearing Dan Pallotta, Harvard Business Review contributor and the author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, speak at a conference.
In his presentation and his blog, Dan explains:
“Total annual U.S. marketing expenditures for all purposes are estimated to be about $730 billion. A rough estimate of annual nonprofit sector marketing spending puts it at $7.6 billion. Take away nonprofit universities, museums, and other quasi-businesses, and a liberal estimate of annual health and human service nonprofit marketing spending is $1.9 billion.”
That means for every $1 spent on marketing by nonprofit organizations, their private sector counterparts spend $384.
That is too disproportionate to ignore and even causes one to wonder if it is at least a or possibly the contributing factor to the perpetual financial perils that plague the vast majority of nonprofits, limiting innovation and even causing extinction.
Dan goes on to add:
“Donors consider paid advertising wasteful . . . The donor prejudice is that advertising spending steals from ‘the cause,’ so charities loath to do it, for fear of donor reprisal. Meanwhile, Coca-Cola, which understands the power of advertising, is spending to indoctrinate us for life.”
One of a kind research done by Lipman Hearn and the American Marketing Association (AMA) surveyed 125,000 members of the nonprofit marketing community to quantify nonprofit marketing spending.
The research found that a total of 56% of nonprofits have a marketing budget less than $100,000, 44% have a marketing budget under $50,000, and 42% of the marketing departments were overseen by just one individual.
Overall, marketing budgets are typically 2% to 3% of the organization’s overall operating budget.
What Do We Have To Lose?
The needs of our communities and our world cannot wait for us to figure out how to raise more money on Facebook. The lives of people with too little hope and too much hunger cannot wait while we continue to do what we’ve always done and slice the budget pie in a way that leaves the same small marketing slice every year.
The numbers can no longer be ignored if we plan on “curing,” “ending,” “stopping,” “solving,” or “changing” anything. Marketing is the hand that feeds business. Let’s stop cutting it off and instead use it to plant regenerating seeds that will keep our organizations, our sector and communities thriving, and make them stronger than ever.