15.10.2015

PROFITING IN THE NOT FOR PROFIT SECTOR

Developments in technology, an improved level of awareness and a greater understanding within the sector has meant that our approach to fundraising and supporting not for profit (NFP) organisations has evolved. Society has adapted to the changes imposed by the growing world of digital and social media, big data and our incessant need for technology at our fingertips. As a result, charities and NFP organisations are unable to solely rely on collection pots or car washes to ensure financial stability and guarantee support is delivered to those who need it most. For the larger and perhaps more well-known charities the necessity to drive revenue greatly outweighs the capabilities of the one dimensional traditional fundraising model.

Advances in technology have not only forced a change in thinking but helped provide a solution. Digital and social media have allowed NFPs to increase their own brand awareness, broaden the reach of their campaigns and unearth new audiences to target, but perhaps most importantly, it has also provided a way for people to make instant donations. Simply, there has never been a time where it has been so easy to donate to a worthy cause.

I seem to have surrounded myself with family members, friends and colleagues who are keen to take on the elements and challenge themselves in ways that sometimes seem completely insane. Personally, this only seems to demonstrate the sheer appetite and demand for such challenges. Whether going Sober for October with Macmillan or embarking on an iron man there is an engaged audience of potential donors ready to put themselves to the test to show support for their chosen charity. The simplicity and ease associated with donating via text or online coupled with a readily engaged audience is vital, but it is only part of the story as advocates have to be aware of the charitable events available to them in order to get involved or pledge their support.  

There are similarities between sport/event rights holders and NFP organisations as both are immersed in a battle to differentiate themselves amid a world of clutter and fierce competition. Everyone is vying for the attention of the consumer (or potential donor).

In the corporate world, governing bodies and sports teams alike are judged on their ability to operate as a successful commercially minded business.  Corporate partnerships and sponsorships are not always viewed positively within the third sector. There is often an inner turmoil between the realisation that government funding is diminishing and the urgent need to find income whilst remaining humble and ‘non corporate’. Those tasked with identifying the most profitable revenue streams within the NFP sector must therefore possess creative and flexible minds to ensure the image and integrity of the charity is not affected by the need to bring in money.

The success of a partnership is often measured by the tangible assets on offer. Brands want to be able to offer clients or potential clients access to money-can’t-buy experiences whilst also being able to demonstrate that the partnership has had a positive impact on sales or product/service consideration.

If a brand were to align with a sports team, individual or event they would expect to receive considerable assets in return for their investment. Whilst perhaps the more cautious are swotting up on the possible compliance issues associated with the Bribery Act, there are still deals to be done that result in dinners with high profile sports stars, tickets to the best events or live performances from the most renowned musicians.  

The ‘charitable sponsorship sell’ is therefore increasingly difficult. It is hard to determine where you fit, for example, is the proposition sponsorship, patronage or purely CSR? In order to secure sponsorship income the proposal has to be a genuine sponsorship proposition that has the ability to deliver commercial benefits to both parties.

NFP propositions tend to be restricted in benefits, tangible and intangible value, and are typically focused on the retail sector. You may therefore forgive those who ask, why would I choose a charity partnership instead?

Like any sponsorship proposition, time needs to be spent determining and justifying why the two parties should be aligned. Typically, charities do present more of an interesting opportunity for brands beyond the obvious corporate social responsibility buffer, but you may need to work a little harder to determine the true worth of the proposition.

Whilst it may initially seem that a brand has more to offer a NFP than vice versa, it is important to remember that a NFP organisation has its own brand value and therefore a direct worth to a potential sponsor. By aligning with a NFP organisation, a brand has a credible way of sharing their brand story (providing the association is activated and executed appropriately) which is a truly and almost unquantifiable valuable asset.

Regardless of the type of association a brand is looking to create (e.g. cause related marketing, sponsorship, corporate donations or use of brand etc.), producing an emotive association between the consumer and the brand is the current pre-requisite of all successful sponsorships and activation campaigns. Time spent understanding why a fan is a fan or a donor is a donor is of paramount importance as it will help drive an authentic association and a solid platform to help communicate your brand story. Just in the same way as you would look to develop different communication strategies to suit different audiences within sport or entertainment industries, the same approach must be applied to the NFP sector. 

Like partnerships formed outside the third sector, the relationship must be mutually beneficial. NFPs need brands to help increase their own awareness and align with a desirable target audience; big brands for example regularly bring with them big marketing budgets, often in the form of TV or national print coverage. Conversely, brands look to NFP’s to meet some of their own objectives such as generating increased profit on products, enhancing brand equity and affinity whilst boosting CSR credentials and employee engagement.

NFPs offer brands an alternative way to help achieve internal objectives. Furthermore an affiliation with this sector is often cheaper than sport/event/ambassador focused partnerships meaning it may be the missing link to ensure a complete sponsorship portfolio.

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