Nonprofit-Marketing Experts Outline Hot Trends, Discuss Challenges

By Holly Hall

In recent years, charities have grown more sophisticated in their marketing efforts, with many hiring marketing professionals from corporations, but they still have a long way to go, a Georgetown University marketing scholar said at a meeting held here last week by the American Marketing Association.

Alan R. Andreasen, who has written several books on both nonprofit and commercial marketing, told conference participants that he discovered a high degree of frustration in interviews with 40 nonprofit marketing directors who previously worked for companies.

He said that the directors missed the accountability standards they were held to in the corporate world, the fact that their work for companies was measured in the number of sales or customers rather than the less-tangible outcomes, such as behavior change, that are sought in the nonprofit world.

The marketing directors, Mr. Andreasen said, also complained about slow decision making in the nonprofit organizations where they work.

“In the private sector, it’s ready, aim, fire,” he said. “In the nonprofit sector, it’s ready, aim, aim, aim, aim, aim — oops, the grant ran out.”

Marketing professionals who move from business to the nonprofit world, said Mr. Andreasen, “need some sort of indoctrination about the complexities to help ease the transition on both sides,” but they rarely receive such instruction.

Complicating the issue, he said, is the fact that nonprofit marketing is much more difficult than corporate marketing. Charities usually do not have customers; instead, they have “target audiences,” a diffuse and more complicated group of people they need to reach, said Mr. Andreasen.

For example, in fighting childhood obesity, a nonprofit organization cannot simply focus on overweight children. It must also reach out to groups such as parents, school officials, fast-food companies, news directors, and government officials.

The results a charity wants to achieve, such as reducing obesity, he said, are harder to measure and take longer to realize than corporate sales. And nonprofit marketing directors are usually working with tiny budgets, compared with those at corporations, in their efforts to win donors, serve the needy, and encourage changes in public attitudes and behavior.

In addition to those challenges, Mr. Andreasen said, many nonprofit marketing executives also feel that they are looked down on in the marketing profession as people who “can’t hack it in the private sector,” or they are regarded as suspect by grant makers and others who think that charities should focus on good works without promoting themselves.

More and more charities are realizing the benefits of “word-of-mouth” marketing, in which employees, donors, volunteers, and other individuals become advocates who urge others to support a nonprofit cause, according to Brad Fay, chief operating officer at the Keller Fay Group, a New Brunswick, N.J., marketing consulting company.

Mr. Fay noted that the Word of Mouth Marketing Association created in 2004 now has more than 300 members, including many nonprofit groups.

He attributed the rising interest in word-of-mouth marketing to several trends, including consumers’ distrust of traditional advertising, growing competition among charities for donors, the increase in online peer-to-peer communications, and the use of word-of-mouth strategies in political campaigns.

For instance, he noted that President Bush’s 2004 campaign relied heavily on persuading influential people to show their support for his re-election by holding parties, writing to local news editors, posting campaign signs in their yards, and contacting radio talk-show hosts on his behalf.

Mr. Fay said that people are twice as likely to trust the advice of friends and family members as they are to act on paid advertising. He cited research showing that 53 percent of Americans are highly likely to believe in the credibility of recommendations from friends and family, 51 percent are highly likely to pass along to others what they have heard, and 48 percent are highly likely to make a purchase or donation based on such recommendations.

The same research, said Mr. Fay, has found that people tend to pass along positive comments about organizations or people, and make the recommendations in face-to-face conversations, rather than by telephone, e-mail, or other approaches.

While word-of-mouth marketing is cheaper than traditional advertising, Mr. Fay said, newspaper, television, radio, and other media still have a role to play. Nearly 40 percent of word-of-mouth recommendations, he said, occur in conversations that start with a reference to a newspaper article, television or radio show, or advertising.

Mr. Fay urged charities to create close bonds with people who have extensive social networks and create opportunities for them to encourage their friends and associates to do more than simply write a check. He said that charities should craft e-mail messages to donors and others that urge those people to forward the mailings to others. And he said that nonprofit groups should look for ways to reward supporters who recruit donors and volunteers to their cause.

Mr. Fay advised charities to make sure that their Web sites have an “action center” that tells people how to get involved in a cause through specific acts, such as telling others about it, contacting newspapers, and making speeches at local gatherings.

In marketing their organizations, nonprofit groups often make costly mistakes by failing to grasp the basics of copyright law, said Paula Cozzi Goedert, a Chicago lawyer who represents charities and nonprofit associations.

She warned that a lot of people pass along misinformation about copyright regulations.

One common misperception, she says, is that anything on the Internet is part of the public domain, and copyright rules do not apply — when in fact online materials must follow the same rules as information that appears in other formats.

Another common misunderstanding: Charities think that only works registered with the government and bearing the copyright seal are protected from use by others, said Ms. Goedert.

Ms. Goedert said that she has encountered dozens of cases in which nonprofit groups had to pay damages involving tens of thousands of dollars or destroy expensive marketing materials they produced — all because the groups used photographs, recordings, cartoons, or other materials without first obtaining written permission from the copyright holder.

The courts, she noted, have been strict in upholding copyright laws that give the person who created a written, visual, or audible work many valuable rights, including the right to copy his or her work. Those rights are held exclusively by the creator, unless they are sold or given away, Ms. Goedert said.

Many charities, she added, assume that they are granted copyright privileges when they pay for a work, but that is not necessarily the case. An organization that purchases an image from an artist to be used in a brochure, she said, does not have the right to use that image anywhere else.

Wherever possible, when using material created by another person or entity, Ms. Goedert said, charities should obtain a copyright assignment, which transfers all rights of ownership to their organizations, or get a licensing agreement, which allows for restricted use of material for a specific purpose or period of time.

She warned that not doing so could be costly.

In one case she worked on, a nonprofit organization printed 60,000 coloring books to encourage children to practice safe habits, and it collected several commercial coloring books to show the printer the type of product it wanted to create.

The printer, Ms. Goedert said, used an illustration that was very similar to one in the commercial coloring books and — after a few thousand copies of the nonprofit group’s book had been sold — the manufacturer of the original image demanded that the remaining copies be destroyed. Even though the charity offered to pay for the image, the manufacturer said it had done so too late.

In another case, Ms. Goedert said, a nonprofit group produced an educational videotape about health issues that was later aired on television. At the end of the video, the speaker held up a picture for about 10 seconds to make an inspirational closing point. The image, which was on the front of a greeting card, was owned by a card company that sued the nonprofit group after the broadcast. The group had to pay a five-figure fee for damages.

To avoid copyright problems, Ms. Goedert said, charities should keep a simple point in mind: “Everything belongs to somebody, usually somebody else,” she said. “If you didn’t create it, it doesn’t belong to you.”