Marketing in non-profit organisations
The not-for-profit sector in many developed countries is significant and large numbers are employed by organisations such as NGOs (non-governmental organisations/charities), government departments and religious organisations. The philosophy of the IB promotes study of non-profit organisations and there are likely to be a range of questions in examinations focused on this topic area.
Of course, it is quite likely that as a student you operate in a non-profit environment every day, since schools and colleges are often charitable institutions, even when fee paying. Consider whether your school actively markets and how? It would be surprising if they did not. Has your school got a logo or mission statement? Does it produce advertising materials and what is on its website? What incomes does it generate and how would this compare with profit making organisations in the local community?
At one time marketing by non-profit organisations was quite amateurish. Charities often used voluntary labour or employed those with little business knowledge. However, there has been a revolution in the last decade as requests for donations for 'good causes' have become ever more competitive. Part of the problem is competition for donations from National Lotteries, which promise to contribute a share of the takings to 'good causes'. As a result marketing experts have been employed within large NGOs and the services of external marketing consultants hired. For example, when you are stopped in the street for a donation to a charity it is likely that the collector works for a private fundraising organisation, which takes a commission for the arrangement.
Many charitable organisations have looked for additional ways of raising income. These may include the provision of services more commonly seen in the profit sector. Charities may run retail outlets, or sell newspapers to raise funds. Here the normal marketing approaches associated with selling products apply.
Ultimately, the difference between profit and non-profit organisations comes down to objectives and terminology. The creation of an appropriate image is important for any organisation, and so promotion needs to be effective. Firms in the private sector may have the objective to maximise revenues and profits. Charities may have the objective of maximising fund raising for their client groups. Profit or surplus may, in reality, be very similar. The more charitable organisations like UNICEF sell, the more they can fund their projects.
Often there are joint ventures between profit and not-for-profit organisations. Profit making firms may wish to support good causes as it helps promote a socially responsible image.
Not-for-profit organisations are also major employers meaning that HRM approaches will be similar to any other employer. They must recruit and train and good marketing may encourage better quality applicants to apply for vacancies. However, a major difference between profit and not-for-profit organisations is the way in which NGOs must raise awareness of the causes they represent, possibly more than raising awareness of the organisation itself. This may entail taking a political stance and lobbying important decision makers. Naturally, marketing techniques are used to increase pressures on these decision makers to listen and act.
