Marketing as a Nonprofit 501(c)3

Written by Dan Satterly, Edited by Matthew Carroll

There is no doubt about it: when operating as a 501(c)3, day to day operating tasks will differ from those of a for-profit firm. This is mostly due to the difference in the way cash flows into the business. Nonprofits typically rely on a high percentage of contributed income, while for-profits rely on earned income. Operating on mostly contributed income  allows nonprofits to focus on delivering a quality product. They can dial in on fulfilling their mission statement without having to worry as much about selling products or services. Along with a mission statement, many nonprofits have a vision statement. The vision statement is a statement of growth. It’s something for the future that the firm can work towards. In order for a business to grow and promote itself, it needs to employ marketing and creative advertising.

Eblast clients and social media sites are great tools for promotion, and they offer a very decent return on investment. But how does a firm decide how to use social media? This choice could help the firm grow or move closer to fulfilling their mission statement and vision statement, or hamper those efforts. In the for-profit world, a corporation would conduct market research to make sure that they are making the right decision. After all, the consumer is the most important part of all the decisions made, and consumers these days have choices. It is in the best interest of the firm to listen to the consumer. Market research can help ensure that time and money are being used in the right places.

When it comes to a nonprofit’s budget, sometimes there is a negative connotation around spending contributed income on advertising and marketing. Donors like to see their funds applied to tangible changes. Marketing research is an investment for the future and it is something that can’t always been seen up front, but rather down the road. The ability to spend money on advertising and marketing can grow and strengthen a 501(c)3 in the same way that it can grow and strengthen a for-profit corporation.

In order to develop a strategy the three following questions need to be asked,

  1. What is the target market?
  2. How can that market be segmented?
  3. What are the wants and needs of that segment?

Only after the answers to these questions have been established in depth can the market research begin. If there is room for growth in your firm, or there are any questions about what the next step is, chances are you should consider market research. Remember, nonprofits have customers just like for-profits, and both business models are alike in that they need to communicate with the consumer.  Given that information, it makes sense that they should both have similar considerations when planning for the future.

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