Marketing Management in Nonprofit Sector…
When we think of Marketing we relate it to words and actions such as; selling, creating demand, making profits or similar words. I had always assumed that a dedicated volunteer working in the non-profit sector, with the noble objective of serving disadvantaged communities, healing wounds of war victims, rushing to rescue flood victims and similar humanitarian works would distance themselves to anything related to such words . Dr Philip Kotler, an American marketing author, consultant and Professor, defines Marketing as a process of creating, communicating and delivering value to customers in order to make profits. It is basically a two party exchange. So frankly speaking transferring the concept of Commercial Marketing to the nonprofit sector may not be very smooth, for obvious reasons.
Let’s compare both sectors (Enterprise and Nonprofit) superficially looking through lenses of marketing. There are two major components of enterprise one of them is “Business” which has tangible products , services or value. The other component is ”the Customer “ who has needs and potential to purchase these products. Businesses want to make profits and Customers want to meet their needs with the best options available within reach. Unlike enterprise, Nonprofit involves multiple party exchanges eg Donor, NGOs, NGO Implementing partners, Beneficiaries etc. The donor carries out its specific development objective through nonprofit organization to benefit constituents. Here the nonprofit is expected to give reports , feedback (and now even impact report as per guide line of SDGs). There are many other factors that play a significant role in a donor’s decision to select a particular nonprofit for its development work in an area , country or region . Few of the external factor are local and regional Government recommendation, current priorities of the relevant ministry, policy makers, political and social environment and internal factor like credibility of an NGO , capability, reach to communities and work experience, relationship management etc.
In last few years, globalization, the advent of newer technology, mushrooming of large number of NGOs competing with each other, rising demand of donors for seeking control and accountability for work, reducing loyalty of donors therefore poor donor retention, change in regulatory requirements and public policies, sudden change in political environment , regional and local government priorities and their influence on donors and many more has put some serious question on sustainability of NGOs. There are many NGOs with track record of significant contribution to economic and social development are finding difficult to sustain due to shortage of funds. Although some nonprofit organizations are responding to such changing dynamics and have adapted popular methods of marketing due to need or as a compulsion.
Dr. Philip Kotler explains scope of marketing in NGOs sectors; he writes that
“Marketing is the function of a nonprofit whose goal is to plan, price, promote and distribute the organization’s programs and products by keeping in constant touch with the organization’s various constituencies(communities and donor) ,uncovering their need and expectations for organizations and themselves and building a program of communications to not only express the organization’s purpose and goals ,but also their mutually beneficial want –satisfying products”.
There is a great scope for nonprofits to utilize some core principles of marketing to not only improving fund raising but also to implement their programs in delivering best impact on beneficiaries and satisfaction for donors.
Some of these principles include; segmentation, positioning, market research, creating and communicating value, and customer relationship management.
In addition there is a huge scope for nonprofits to capitalize on its reach, impact data , varied data base and experiences and innovations to create products and commercialize in form of strategic partnerships or as social enterprise to generate own income to answers questions arising on sustainability for long run.