Friday, January 01, 2010

Article Marketing Challenges for NPO's in the new Millenium


Marketing Challenges for NPO's in the new Millenium

By Peter Hanami

This millennium will see a number of rapid changes for individuals and businesses, especially for nonprofit organisations (NPO).

1 The changes facing NPO’s

There are a number of factors contributing to the growth of NPOs in the past ten years.

Firstly, a reduction in Government funding. NPO’s is an area that has not been well supported by commonwealth and state governments. NPO’s will be required to provide their services with less government support and will have to develop their own ways of financing their operations. The Fred Hollows Foundation has opened ophthalmology clinics in third world countries for people who are not able to pay a large amount of money necessary for the diagnosis and treatment of eye conditions. This foundation has grown, by the effort of individuals who have strong ambitions to succeed. The amazing motivation of the founder attracted much needed attention and support from other specialists and organisations, and drew upon their support to solve this ongoing problem. People offer a range of services including their personal time, equipment and money to help the foundation meet its goals.

Secondly, the restructuring of society will have an impact on the operation of NPO’s. (In this article, Charitable organizations are classified as NPO”S, organisation’s which provide services and support to the community without a profit focus and are largely self funded.) The introduction of technology, the reduction of jobs and the change to “user pays”, have caused this change. Commonwealth and state governments used to support charitable organisations, with direct funding and by exempting them form certain types of taxation. However, the government has over time been reducing funding and is becoming more selective as to who receives the money it has to offer. Part of this has been a goal of the government to balance the accounts. As a result, charitable organisations have been forced into a very vulnerable position. For instance, In Victoria there were once five organizations providing services to the visually impaired, now there are only two. By reducing funding the government has forced them to become self supporting, merge or stop providing service. This change has led to a streamlining of service and as a consequence, the amount of services on offer to clients has been reduced. It is becoming more difficult for the people who need support to obtain it.

Thirdly, a change in community based support is increasing and NPO’s are finding a new market for their services. This change has been due to local people determining their own needs and then creating the things they want instead of depending on the government providing the service. People have become fed up with long waiting lists for government services and the sheer hassle of dealing with faceless, heartless organizations. NPOs are being created by individuals who have a common interests, ambitions, willingness and a desire to help the community. For example, in Fitzroy, Victoria, local residents required a number of services, such as child- care, easy access to information about health and nutrition, and the ability to buy unprocessed natural organic food. Local residents started a Food-coop and opened a shop to the public providing the above mentioned services. Members pay an annual fee, which covers the running costs and they get sponsorship and donations from other organizations in the community.

There are many issues that will impact NPO’s this millennium. I have only briefly mentioned a few. The social structure is changing, the nature of work is changing, instability of the economy and decreasing government expenditure are a number that will effect NPO’s daily operations.

2 Things that an NPO should take notice of.

The issues that NPO’s should be aware of are:

(1) They should sharpen their ability to get to know more about their clients needs and government policy, this includes having good sources of information, which is vital for things like, marketing and fund-raising. Overall good communication skills are a vital skill. An NPO has to be a knowledgeable expert in its field, whether it is food production, child-care services, or the care of handicapped people. It should be aware of all the important key factors in its operating environment and have the passion to make a difference.

(2) An NPO should develop good marketing skills. New organisations open their doors daily. In the marketplace the ability of the NPO to attract attention, eg, be known, understood and listened to by the public is absolutely necessary. Unless their voice can reach and be heard by the right people its goals will not be reached.

(3) Accountability is important. NPO’s have to better managed and controlled financially than other organizations as they are on public display. The public already has a poor perception of small charities and can recite a large number of failed or mismanaged organisations . As the NPO’s rely on the public for funding they have to be totally transparent and show they are efficient in providing there objectives.

(4) Relationships are important. For the NPO to be successful, the skill to develop good relationship with members, customers and service providers, then be able to monitor and develop them, is critical. Long term relationships that benefit both parties are the key to long term success.

(5) Corporate fund-raising should be enough. NPO’s need to focus on where the best funding is. Companies, government and high net worth individuals who clearly understand the direction of the NPO’s goals are the key markets not tin shaking on street corners. An NPO has to really add value to the contributions of sponsors through continuous reports and good accounting practices. This will build respect and trust, and in return will lead to a better long-term relationship.

3 Experiences at NPO's

I worked for two NPOs. The first NPO The Royal Victorian Institute for the Blind” (RVIB) in Melbourne, Victoria, Australia. The second was The Central Council for Education and Training in Social Work” (CCETSW) in London, England, United Kingdom. RVIB is a charitable organisation for visually impaired people, and it has been in operation since the late 19th century by public contributions and government funding. In the late 1980s, RVIB had to adopt a commercial stance and become self funding as the state government cut its funding. It found itself having to provide services with less money than before. However, it developed a fund raising department whose job it was to develop new ways to gain funding.


My role was as a marketing advisor and I advised RVIB how it could attract sponsors and develop the marketability of its key event “Carols by Candleight”, which is held very year on Christmas eve. RVIB had an attractive logo, which was dark blue; and it incorporated ornamental writing, this was the organizations brand and was well known in public. “Carols by Candlelight”.is a variety show, held at the Myer music bowl in Melbourne and involves a professional trained choir, guest celebrity artists and a famous celebrity compare, it is broadcast nationally on television on Christmas Eve (24th of December), every year to an audience of over 6 million people. It is held for three hours at an outdoor venue called the “Myer Music Bowl” in Melbourne. You can buy a ticket to see the event or watch the event broadcast free on TV at home. The people who join the event bring a picnic basket and blanket, and light candles when the sun sets. Candles symbolise Christmas and people sing Christmas carols with the choir and wave their candles in support. The event is the largest yearly event for RVIB.

My responsibilities at the event were to: manage all offstage activities, including Ÿmanaging the venue Ÿgetting all local permits Ÿidentifying necessary equipment Ÿliased with the TV station, negotiating event sponsorship Ÿ donation of goods for running the event, eg, candles, food, emergency services support, accommodation for the artists, feeding staff, training over 300 volunteers Ÿdesigning the official program and selling advertising space in the program.

Another area of important fundraising was using RVIB’s existing facilities, eg, buildings and halls, as fund raising vehicles. For example, RVIB Hall was used for official social occasions and meetings. Eg, for new music artist record launches. The blue basalt head office was an ideal set location for TV shows. We arranged for the United States based TV program “Mission Impossible” to use the location as a back drop for an episode.

Carols by Candlelight was a great event, but had never been a great financial earner for RVIB. The aim of the event was to attract a wide audience to think of others in need at a special time, Christmas. All the key ingredients were in place for the event to work, the event was well recognised, the TV network gave the event national coverage. RVIB had to pay for hiring the venue and all other offstage fees, the TV station provided facilities and staff. Even with all these great things in place RVIB couldn’t get the commitment of the viewing audience to make donations. The event had lost its way and needed good management to be able to run as a profitable event. Redirecting the focus of the event was my key priority and contributed to the event to record its first profit in its 35 year history.

Loss of direction or focus is a problem common for NPO’s. They begin with a good intent; however, often the message and goal gets lost over time, this often happens when key staff are replaced at short intervals. The future of RVIB depends on the ability of RVIB to manage and control the event and make it relevant to the public.


At CCETSW, the focus was on improving the professional skills of social workers in the United Kingdom. The organization set a range of guidelines, and then created a range of publications that helped and supported social workers in the front line. CCETSW like RVIB had realised that it had to generate its own income by its own activities. Like many NPOs, its past history was linked to government funding support. Having a commercial focus was not a bad thing, however, it was unnatural, because most NPO’s were not originally established to make a profit from their operations therefore, when the change in focus occurs there is a lot of internal resistance to overcome. People often feel that the “noble” part of the organization fundamentally purpose is challenged. Charities are expected to be run, not for the purpose of profit, but to provide a service that is necessary to the community.

My role was to advise in marketing, part of my job was to introduce and promote our range of publications (over 200 titles) to the relevant organizations throughout Europe. To do this we sent flyers and inserts to leading social workers in each segment of the market, related organizations, the media and libraries. We followed up the mail out with a personal phone call, this helped jog the targets memory, it was good to make personal contact and helped us to explain and to confirm the organizations role and the importance of our publications. It was also important to speak to the people who were the key decision-makers and try to discover feedback about our publications. We kept detailed records on each customer and built up a profile over time of their needs, likes and dislikes.

We promoted our publications through stands at major industry trade shows. For example, we joined Carex exhibition held in Wembley, London. We acted out role plays, linked to our publications, eg, alcohol and its effects, at trade shows which drew the attention of passing foot traffic. We created individual marketing plans for each topic and then worked at promoting different angles to get the media to highlight how our publications would help solve certain problems, eg, drug use.

The understanding of what is meant by the term “charity” has changed in recent years. The accountability of government and how government uses public funds has strongly impacted on NPOs. A gap began to form between NPOs and the public’s perception of their role. People started to attack the activities of NPOS’s, as they were given large sums of money but showed no return. This was a large fundamental change in public thinking.

In the past CCETSW relied on governmental funding, and at that time, it was controlled and given direction by government policy, it has had to redesign itself for the changes required in funding and public perception.

5 Observations

During my time at NPO’s, I made a number of observations. As organizations change from one source of funding to another they need to restructure their whole decision making processes. When NPO’S relied on government funding their was often strict guidelines on how they had to use the money. Internal communication was slow as everybody had to agree on how to implement ideas and plans. That has changed with a change in funding, but most organizations still operate on the old model. Also becoming commercially oriented also means peoples jobs change and they often find that their jobs expand, because the job grows in responsibility everyday. On the other hand, the role of people at private companies is clearly defined. At private companies, communication is direct, clear and defined, however at NPO’s this structure and focus is lacking. Everyone in the of NPO can answer what and how things are supposed to be achieved; however, people who are not in direct contact with a service often know little about it. Therefore, inter-department work often caused confusion and deadlock in a project, because many people opposed other people’s views and opinions.

NPO’s have to refocus their aims on the whole public, by bringing some kind of value to the market, they must communicate their aims effectively and promote goodwill in order to survive. NPO’s should really focus on core activities where they have experience and skill, not a range of activities, where they have little skill.

The new millennium is here and the success of NPO’s is dictated by the ability to understand the market and their role in the market. NPO’s need to have adequate resources to allow them to do their job. They need to constantly stay up to date, be relevant and focused. As the world is very competitive, NPOs always have to try to improve. The challenge of NPOs is to provide a needed service in a cost effective way that can attract continued support from the public.

Translated by Rika Ishii

”Marketing challenges Facing Non Profit Organizations in the New Millennium”, The Institute for Living and Co-operation Kyoto Co-op Institute, Kyoto, Japan.pp 10 -13 (Japanese) 2000.

Copyright Peter Hanami. 2000. All Rights Reserved

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