Why Nonprofits Require Marketing Skillset and Mindset

(This is an investigative report titled Mission Possible: How NGOs use marketing principles to achieve their goals that I wrote and published in the Autumn 2012 issue of Marketing Excellence, the members' publication of the Hong Kong Institute of Marketing. I was convinced most of the discussed matter is still valid after six years, although some of them are not much so.)

The Non-Governmental Organization (NGO) sector has become a highly visible part of Hong Kong's marketing landscape. Fuelled by Hong Kong people's social awareness, the sector receives HK$80 billion in public donation, making our city the most generous givers on a per capita basis in the world. There are also more NGOs in Hong Kong. 27,000 are registered as non-governmental organizations while about 6,600 are registered charities.

How do NGOs incorporate marketing into their services? Do they talk about unique selling propositions, and positioning and other marketing terms in their communications? We spoke with six charities for their views on marketing: Irene Chan, Chief Executive of Hong Kong Committee of UNICEF, Irene Lam, Director of Marketing and Communications at Aids Concern; Kris Tong, Director of TREATS, Mary Lau, Director of Development of ORBIS, Pia Wong, Executive Director of Bring Me A Book; Ralph Leonard, Development Director of Child Development Centre.

The philanthropy market: Generous but cautious

Hong Kong people have always been generous to causes and disaster relief. Irene Lam describes the philanthropic market as "an ocean with treasures there". She continues, "In fact, people in town are generally kind-hearted and willing to donate, as long as you can be ‘seen' and ‘agreed to.' As international NGOs are usually more visible, they have an advantage over smaller local NGOs." Ralph Leonard notes that Hong Kong is second only to Singapore in wealth concentration, thus people have the ability to be generous. At the same time fundraising is also a platform for education and nurturing a giving culture.

Mary Lay says that the charity market is expanding. "There is an increasing social consciousness to give to the needy, and there is increasing calls for corporate social responsibility and an increasing number of corporate charity foundations to enter the market."

Irene Chan notes that "the public is being approached (or bombarded) by multi-dimensional marketing messages from various media every day, every minute, regardless whether they are from commercial or nonprofit organizations."

At the same time, people are more careful with their giving. "They are becoming more cautious in recent years due to several scams that have happened in the past few years," said Kris Tong.

Individual Donations Still Matters Most

Except for government-subvented charities, most NGOs report individual donation as the major component of their income. NGOs which provide service such as the Child Development Centre derive a significant portion of their income from programme or service provision.

Recently, corporate donation is growing in tandem with the emergence of corporate social responsibility as a business practice. Foundations and family trusts, such as Li Ka Shing Foundation's Love Idea, Love Hong Kong programme is helping many charities, especially the smaller and less known ones. Larger and more resourced NGOs also organize fundraising events, such as ORBIS' Moonwalker. While the cost of event fundraising may be higher, there is also the added value of brand building and communicating the organizational mission.

Fundraising challenges underlie another oft-mentioned attribute of NGOs: resources-starved.

Transparency, uniqueness, worthy mission key to marketing success

How do NGOs promote their causes and provide services within a limited, or in some cases, no budget? The NGO market can be as competitive as the commercial world. Just like commercial firms, NGOs are driven by public awareness. With their expanding numbers, it is easy for donors and stakeholders to get the mission, messages, service areas and even identities mixed up.

Thus most NGOs subscribe to the need for a clear positioning which demonstrates the type of work and service they provide, and how they can uniquely fulfil the role.

"How TREATS is different from other children NGOs is crucial and that's why we have launched the re-branding exercise and revamped our logo, vision and mission statements several years ago," said Kris Tong.

UNICEF takes an integrated approach, says Irene Chan. "Our marketing strategy is a holistic 360 degree one with a consistent message – UNICEF believe in Zero suffer from children worldwide and we will never stop until it becomes a reality." An astute approach is required for making the most out of the limited resources. "We must be smart in locating marketing media that are both affordable and effective."

Similarly, Ralph Leonard emphasizes a "key message and the Case for Support that is able to demonstrate a clear vision forms the backbone of any development strategies." He also added that it is important to "walk the talk to prove to supporters that its cause is worthy to support."

Bring Me A Book differentiates itself by quality. "Over the past six years, we have built our brand name to become synonymous with quality – whether it is our book selection, our training, our events or the speakers and authors we bring to Hong Kong – it is critical to maintaining that level of high quality," said Pia Wong.

Mary Lau agrees, that a clear positioning to stay focus on eye health, and the delivery of quality eye care service are their ways to stand out in a crowded space from a marketing perspective.

At the end of the day, transparency and accountability are the key elements. "I think NGOs are driven by mission and thrive on trust and reliability, and they also need to create strong emotional and social links to individuals and groups," says Kris Tong.

How does NGO execute their missions? "We see no difference between commercial marketing strategies/tactics versus nonprofit marketing strategies/tactics," says Mary Lau. "Creativity is the key and as an NGO we have to focus on effectiveness and efficiency. We have to calculate return on investments in fundraising events."

At the same time, collaboration and partnership are rising trends. "We are a strong believer in collaboration – as an organization, we understand our limitations, yet not afraid to be opportunistic and aim high," says Pia Wong. Irene Lam agrees. "Development of CSR in the private sector is a good chance for exploring collaboration with the corporate sector." Given the resources constraints of NGOs, such partnership ensures a win-win situation for all.

Social Media: Great for engagement, how about Donation?

NGOs' reaction to social media ranges from a tight embrace to a cautious testing of the water. "Announcing events and new products via social media has really helped to drive traffic to our website. For example, in 2010 we had about 1,080 hits per month but now it is close to 100,000 hits," says Pia Wong.

"The Facebook fan page is an important branding too," says Mary Lau. "It triggers more and more interactivity with fans to collect opinions. We enjoy the interactive process and love to test new technology, e.g. mobile marketing."

Irene Chan reckons that social media is a critically important channel for daily interaction. "We also work very actively and diligently in testing and optimizing our use of digital media, such as search engine marketing email marketing, social media marketing, and so on. We respect every ‘like', ‘share' and the comment was given to us on social media pages. We try to answer any questions our supporters may have within a 24-hour time frame."

Social media is not only a communication tool. "We have tried using social media for fundraising and we are now combining new and traditional media. It works even better," says Kris Tong. At ORBIS, Mary Lau believes that more fans lead to more advocates and ultimately more donors.

Ralph Leonard cautions against overstretching on social media. They are adopting a wait and see attitude. "While it is agreed on the social media trend in the years to come, tight resources mean that they are more careful and will begin using other media only if and when their resources allow and that they figured a particular social media platform adds values to its overall communication composition," says Ralph Leonard. "Charities can't afford to have an account and try all available social media and eventually withdraw from some of them, it will do more harm than good."

Challenges in the NGO world: Competition and Brand Awareness

The major challenge in the NGO sector, just as in the business world, is competition. "There are more and more good causes appearing in the market and attracting the attention of the crowd," says Mary Lau. Pia Wong highlights a related problem. "As a fundraising hub, one major challenge is to avoid ‘donor fatigue' – some donors, understandably, are not so willing to support the same organization year after year so it's important to seek new potential revenue streams."

Even for international NGOs such as UNICEF, limited resource is an ongoing issue. "Both online and offline media costs have sky-rocketed. We need to be more creative in finding new and effective ways to recruit and retain supporters," says Irene Chan.

Some NGOs serve a niche market. "HIV/AIDS is still a taboo in the Chinese community. It is stigmatized and involves moral judgements. Also, people and corporations in Hong Kong have less priority to the issues of HIV/AIDS compare to poverty, children or elderly, although HIV/AIDS is one of the hot global health issues." says Irene Lam.

Awareness too is an issue. "Hong Kong people tend to give to international NGOs, large organizations and big names," says Kris Tong. Ralph Leonard agrees that it is a challenge to "getting the NGO's message across and to convince donors why social welfare matters."

In 5 years: more transparency and more funding channels

The future looks to be more regulated, but also with more opportunities opening up. "There will be more requesting to become more transparent, more professional and accountable. Supporters might expect instantly available information. At the same time there will be an increase for professionalism in prospect research," says Ralph Leonard.

Mary Lau believes that online fundraising has become bigger and more donation channels will open up. "More organizations and corporations will get involved in community and charity works, and at the same time, young donors will become more active and dominant in the market."

Similarly, Irene Chan envisages that an increasing number of their supporters will come to them via mobile, web and instant messaging channels in the next 5 years. "These supporters are likely to be more loyal and offer us long-term support."

Irene Lam believes that in the next few years more local NGOs will be established as the sense of local identity become stronger. Many NGOs look forward to growing and expanding services, such as Bring Me A Book which hopes to set up a literacy centre. "It's a dream now, but like I said, we like to aim high!" says Pia Wong.