Notes

Outline

New Integrated Communications and Market Research on Foundations and Nonprofits What every nonprofit organization should know

Agenda Why conduct market research? What should I research? Should I engage a specialist? What’s happening now among nonprofit organizations? What’s happening now among community foundations? Conclusions and closing remarks.

Why Conduct Market Research?

Why Conduct Market Research? Conventional wisdom We know who we need to reach. We know what they think of us. We know what’s important to them.

Why Conduct Market Research? How do you “know”? “Our staff hears it all the time.” “People write and call us.” “Other nonprofits have said …”

Why Conduct Market Research? Pitfalls of the conventional approach Sample sizes Non-representative respondents Filtering and targeting Social acceptance (I want you to think well of me.) Likeability (I like you and your organization.) Hidden agendas (I want you to …) Interviewer bias

Conclusions If you do what you’ve always done, you’ll get the results you’ve always gotten. Research does not mean just talking to some people. Sometimes you don’t know what you think you know. What you don’t know can hurt or help you.

What Should I Research? What is research? Research is a studious inquiry or examination, especially investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories in the light of new facts, or practical application of such new or revised theories. Research is identifying and acquiring information relevant to current or proposed activities.

So, What Should I Research? You can research almost anything. You should research those factors that drive the success of your organization.

One Last Time, What Should I Research? Market potential Awareness and perceptions among all key audiences Audience motivations and needs Communications The “buying” process

Should I Engage a Specialist? It depends. How much money do you have? What resources and skills exist in-house? What if I have little of either?

Should I Engage a Specialist? Cutting costs Pay the experts for their expertise, not the things you can do yourself Expert elements Research design Analysis and interpretation Non-expert elements Recruitment and screening Data collection (?) Report writing

Should I Engage a Specialist? What to look for: Firms with experience getting the type of answers you need Firms with lots of tools in the toolbox What to beware of: Recycled methodologies Statistical analysis

What’s Happening Among Nonprofit Organizations?

What’s Happening Now? The Cleveland Foundation and Marcus Thomas conducted an online study of brand and marketing activity among nonprofits. 452 individuals responded. A wide variety of vocations participated.

What’s Happening Now? Most participants represent small organizations.

What’s Happening Now? Primary responsibility for marketing and/or branding activity is allocated to an executive director, a communications department or a team. Marketing and/or branding activities are likely to be conducted in-house. Outside resources are only used sporadically.

What’s Happening Now? 78.3 percent reported that their nonprofit organizations are currently allocating an annual budget for marketing communications expenditures. Almost half of respondents reported annual spending of $25,000 or less last year. 10 percent spent more than $250,000. Not surprisingly, larger NPOs spent more. Most nonprofits are optimistic that communications spending levels will stay the same or increase next year. Almost 30 percent reported receiving less than $5,000 in gratis communications.

What’s Happening Now? Half of charities and community organizations reported not allocating an annual budget for marketing communications. The majority of respondents not allocating an annual budget indicated other departments covered the costs. There is no funding available. Costs are covered through program services, i.e., newsletters, conference brochures, workshop flyers, service brochures and,of course, free publicity where possible. Expenses, when incurred, are worked into other parts of the budget or are accomplished on a pro bono basis. They are covered under development costs or under costs for advertising on a project basis.

What’s Happening Now? E-mail and media relations are the most common communications activities, followed by collateral (e.g., brochures, direct mail). Special events are seen as  the most valuable activity. As are communications that are used most frequently. Visual communications techniques, such as online, television and outdoor advertising, are infrequently used.

What’s Happening Now? 83 percent of respondents say it takes more than just business success to earn editorial exposure.

What’s Happening Now? Other perceptions 96 percent of respondents agreed that prospecting and developing new relationships is as important as receiving donations. 93 percent agreed that one follow-up communications effort is not sufficient for converting a prospect to a donor/ customer. 75 percent disagreed that you should reduce your marketing expenditures in a recession. 72 percent agreed that the Web makes it easy for prospects to find organizations.

What’s Happening Now? NPOs with <$25 million in assets Executive director handles marketing communications. 54 percent spend less than $25K on marketing communications. Few use an outside ad or public relations agency. One-half or fewer use any marketing communications regularly. (Brochures, media relations and direct mail are most likely to be used regularly.)

What’s Happening Now? NPOs with $25-$75 million in assets One-third have an executive director that handles marketing communications; one-fifth use an internal communication department; remainder use team from communications, gift planning and/or donor relations. One-half spend less than $50K on marketing communications; 20 percent spend between $100K-$250K. Few use an advertising or public relations agency. Two-thirds use e-mail and media relations regularly; approximately half use Web development, brochures and special events.

What’s Happening Now? NPOs with $76-$150 million in assets One-half use a communications department for marketing communications; the remainder use other internal resources. 30 percent spend $100K-250K on marketing communications. Few use an advertising or public relations agency on retainer, but nearly 40 percent use an advertising agency on a project-by-project basis. Approximately one-half use direct mail, brochures and media relations regularly.

What’s Happening Now? NPOs with $151-$300 million in assets All use an internal communications department for marketing communications activities. Variable spending; more than 20 percent spend $50K-100K on marketing communications. Few work with an advertising or public relations agency. More than three-quarters use media relations, print advertising and brochures most regularly. Three-quarters regularly evaluate special events, employee satisfaction studies and direct mail.

What’s Happening Now? NPOs with $301-$500 million in assets More than half have internal communications staff to handle marketing communications; others use interdepartmental teams. Half spend $50K-$100K on marketing communications; the other half spend $100K-$250K. Approximately half use an advertising agency on both retainer and piecemeal basis. Media relations (100%), public affairs (85.7%) and employee newsletter/print advertising/e-mail communication (71.4%) are used most regularly. 75 percent regularly evaluate direct mail.

What’s Happening Now? NPOs with $501-$750 million in assets All utilize an internal team to handle marketing communications. All spend $500K-$1M on marketing communications. 50 percent have used a public relations agency. A variety of marketing communications are used regularly. Regularly evaluate a variety of marketing communications activities.

What’s Happening Now? NPOs with >$750 million in assets All utilize an interdepartmental team to handle marketing communications. Half spend $250K-$500K on marketing communications; the other half spend more than $1 million. Half use an advertising agency on a retainer basis. All regularly use brochures, direct mail, print advertising, employee newsletters and public affairs. Do not regularly evaluate marketing activities.

In Summary Branding/marketing communications are described as important, but nonprofits do not prioritize resources against these activities. Non-paid media with broad reach are most popular communications vehicles. Most activities are handled in-house. Budgets are small. Evaluation also is thought of as important, but performance lags behind perception.

What’s Happening Among Community Foundations?

What’s Happening Now? The Cleveland Foundation and Marcus Thomas conducted an online study of brand and marketing activity among community foundations. 221 individuals responded. Most participants represented small foundations.

What’s Happening Now? Consistent with nonprofit findings: Primary responsibility for marketing and/or branding activity is allocated to an executive director or a communications department. Marketing and/or branding activities are likely to be conducted in-house. Outside resources are used sporadically.

What’s Happening Now? 92 percent are allocating an annual budget for marketing communications expenditures. Almost half of respondents reported annual spending of $25,000 or less during the last fiscal year. 35 percent expect budgets to increase; 39 percent expect to maintain current spending levels. Slightly over 40 percent reported receiving $5,001 to $10,000 of gratis communications. 76 percent said foundations should not reduce marketing communications spending in a recession.

What’s Happening Now? E-mail, Web and media relations are the most commonly used marketing communications. Seminars for advisors are considered most valuable. Measurement/evaluation is spotty and often qualitative.

What’s Happening Now? Other interesting facts 74 percent believe the Web helps prospects find their foundation. 60 percent believe advertising takes a long time to produce results. 39 percent believe advertising’s primary purpose is to generate prospects. 39 percent say their board doesn’t see the value of marketing communications. Pro-bono communications are not being used.

In Summary Everyone is active, but there is little consistency in activity. Marketing communications is seen as an important priority. There’s minimal use/partnership for pro-bono communications. There’s a lot of evaluation but comparatively little measurement.

In Closing ¾ A Word About Branding and Marketing

Branding and Marketing in the Nonprofit Sector Our audiences are changing. There is more competition in the nonprofit sector. Money and time are scarce. The marketplace of ideas is crowded — more media, more messages.

Branding and Marketing in the Nonprofit Sector What can branding and marketing do for you? Find and attract new donors and volunteers Leverage the influence of existing relationships Create a clear, attractive image among various audiences Create predisposition and preference Bring efficiency to marketing and communications programs and activities Help justify additional resources for marketing and communications

Conclusions and Closing Remarks It’s not an option — it’s essential. Don’t be afraid to borrow from business. Don’t rely on what you think you know. Initiate and follow through.

Questions

Slide 43

How Do I Conduct the Research? First Determine what your organization wants to accomplish. What are the decisions to be made? Know what information you’re looking for and how it will be used to effect specific changes. Find out what research has already been done on these issues.

How Do I Conduct the Research? Second Identify the audiences you need to study. Determine the most effective methodology for getting the information you need. One-on-one interviews Focus groups Telephone surveys Mail surveys Online surveys

How Do I Conduct the Research? Third Determine who will: Design the survey instrument Recruit and screen Collect data Analyze and interpret Develop implications and recommendations

How Do I Conduct the Research? Fourth Design the survey instrument. Check for clear interviewer instructions Look for ambiguous language Match up against research objectives Recruit and screen. Ensure adequate sample size and representative profile Eliminate outliers Collect the data.

How Do I Conduct the Research? Fifth Analyze and interpret. Perform statistical analysis as appropriate. Don’t rely on statistics alone. (There are three kinds of lies: lies, damn lies, and statistics. - Mark Twain) Perform a cause-and-effect analysis. Remember: research without interpretation is just data. Develop implications and recommendations. Apply results to the organizational goals — what should we do because of these findings? Get buy-in at all levels, not just senior management.