Nonprofits: Needy For brand

Editor’s note: Martin Thoma is an author, speaker and blogger on how to live your brand. Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.
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Strange as it may sound, branding is vastly more important in the nonprofit sector than in the for-profit world.

How can this be? Isn’t the for-profit world where cutthroat competitors vie for customers, market share and profits? Isn’t for-profit the dog-eat-dog business environment where every small advantage can accrue to market dominance?

Yes, all true. But after working on numerous nonprofit boards and consulting with many more charitable organizations over the past several decades, I’ve come to the conclusion that their business environment is far more punishing, unforgiving and competitive. My nonprofit associates with a foot in both camps agree with that assertion.

There’s one simple fact underlying this truth about nonprofits and for-profits: in the nonprofit sector, the exchange of value between players is almost completely intangible. When a donor or volunteer or corporate sponsor invests time or money in a nonprofit, he or she has nothing to hold, touch or taste to show for it. Nonprofits have little to “sell” to donors beyond the good feeling of doing good.

When all you’re offering is an intangible, emotional payoff of somehow making the world a better place, you’ve got a challenging sale. One that’s made much easier when the payoff is made absolutely clear, concise and compelling. That’s the role of good brand work, and the reason nonprofits need it so desperately.

The Twentieth Century Club found this to be true during a period of great transition. Started by women wrapping bandages during World War II, the nonprofit evolved into an aid society offering free housing to cancer patients and their families visiting a world-class treatment facility. The club sold its historic Victorian mansion and was anticipating a major capital campaign to build a new lodge. Its leadership recognized that it had to clarify its identity, mission and vision to be successful.

A rebranding program delivered a crisp new logo, a name that skirted a trademark infringement risk, the positioning tagline, “Hope Away From Home,” and new fundraising messages and materials. In its first year with the new focus, the organization tripled its corporate sponsorship and set a record at its annual fundraising gala; it has continued to grow in impact, opening a new home away from home for families and patients undergoing cancer treatment in Little Rock and establishing its own “gala and girls” program to rival those of Arkansas Children’s Hospital and the American Heart Association.

A powerful trend working in favor of philanthropic organizations is that giving is growing. The 2016 edition of “Giving USA: The Annual Report on Philanthropy” states that giving by individuals, corporations, and foundations reached record highs in both 2014 and 2015. But so are the number of opportunities and means to make charitable gifts — a mind-boggling array. Think about it: if you want to eat a hamburger, you might have 10 decent choices in town. Sure you’ve got your favorite, and your shortlist might be only two or three deep. But if you want to support a cause, there are hundreds or thousands of worthy ones no farther than your web browser.

Of course, nonprofits don’t compete just for money but for every resource there is — volunteers, buzz, membership, board leadership, grants. That a clear, compelling value proposition — a great brand — is a useful business discipline is borne out by research.

BigDuck NYC, a branding and communications firm focused solely on nonprofits, commissioned an independent study of nonprofit executives to explore the impact of branding on their businesses. By investigating “before and after” results with significant rebranding efforts, BigDuck sought to measure the impact of multiple communications disciplines it lumped together as rebrands.

Its findings showed that more than half of the nonprofit execs surveyed said their organization’s revenue increased following branding and communications changes, while another 21% reported it was too soon to tell. Some respondents who noticed a decline in their organization’s revenue post-rebrand cited other factors such as the loss of major grants, or changes in their external landscape. The study underscored what we’ve seen repeatedly in the private sector: a rebrand that is driven or complemented by a new strategic plan, refocusing of the business or leadership changes produces much more substantive results.

Great branding involves substance as well as form.

Branding and nonprofits has even caught the attention of the Harvard Business Review. Authors Nathalie Kylander and Christopher Stone write that alignment in mission, values, identity and image supports clarity externally and cohesion internally.

“When an organization’s employees and volunteers all embrace a common brand identity, it creates organizational cohesion, concentrates focus, and reinforces shared values,” they said.

In their extensive research for the article, the authors found that nonprofit executives commonly define brand concepts using language from the for-profit world.

“Business language is spreading in part because … many of the people managing brands in the nonprofit sector have themselves come from for-profit businesses. Indeed, we were struck to find that the majority of the nonprofit brand managers we interviewed during our research had worked first in the commercial world.”

Nonprofits can definitely take branding lessons from their for-profit brethren. And in time, nonprofits will likely be teaching for-profits how best to develop and execute brand strategies. After all, if you can do it successfully when your philanthropic product is purely emotional, you can certainly do it with a more concrete product or professional service.

Both sectors need what the other can teach, because the world is becoming noisier and noisier, no matter where you live on the business spectrum.