Strange as it may sound, branding is more important in the nonprofit sector than in the for-profit world.
How can this be—isn’t the for-profit world where cutthroat competitors vie for customers, market share and profits? Well, the fact is that the nonprofit world is vastly more competitive. I have yet to encounter a nonprofit leader that disagrees with me on this point.
The simple fact is that in the nonprofit sector, the exchange of value between players is almost entirely intangible. Even more intangible than with businesses selling services; at least there you get something in exchange for your payment. Nonprofits have little to “sell” to donors beyond the good feeling of doing good. And that feel-good feels a lot better when the donor’s accomplishment is clear, concise and compelling.
Philander Smith College proved this more than a decade ago when it went through The Brand Navigator with us, discovering and defining anew its unique purpose in the world. After rebranding as a “crucible of thought, inquiry and action in social justice,” the struggling historically black college attracted the largest and smartest incoming freshmen class in decades and secured two million-dollar grants.
The Mid-America Arts Alliance proved the point in only the past couple of years, when after undergoing a rigorous definition and brand redevelopment process with our firm it experienced a massive unleashing of creative energy inside and a significant expansion of funds from outside. Within its new brand architecture, the organization was able to capture the synergy of dozens of discrete programs and harness the creativity of hundreds of staff, board members and partners behind a common sense of purpose.
As cutthroat as the business world is reputed to be, the world of nonprofits is even more competitive. That’s our view after more than 35 years of leading a marketing agency and leading numerous nonprofit boards.
A powerful trend working in favor of philanthropic organizations is that giving is growing, according to Giving USA: The Annual Report on Philanthropy, published for the past 60 years by The Giving Institute. Charitable giving in the United States reached a record $485 billion in 2021, though the increase did not keep pace with inflation, according to the latest report offering a comprehensive look at American philanthropy.
So giving keeps growing, but so are the number of opportunities and means to make charitable gifts — a mind-boggling array. Think about it: if you want to eat a hamburger, you might have 10 decent choices in town. Sure you’ve got your favorite, and your shortlist might be only two or three deep. But if you want to support a cause, hundreds of worthy ones are no farther than your web browser.
Of course, nonprofits don’t compete just for money but for every resource there is — volunteers, buzz, membership, board leadership, grants. That a clear, compelling value proposition — a great brand — is a useful business discipline is borne out by research.
Branding and nonprofits have even caught the attention of the Harvard Business Review. Authors Nathalie Kylander and Christopher Stone write that alignment in mission, values, identity and image supports clarity externally and cohesion internally. “When an organization’s employees and volunteers all embrace a common brand identity, it creates organizational cohesion, concentrates focus, and reinforces shared values,” they say.
In their extensive research for the article, the authors found that nonprofit executives commonly define brand concepts using language from the for-profit world. “Business language is spreading in part because … many of the people managing brands in the nonprofit sector have themselves come from for-profit businesses. Indeed, we were struck to find that the majority of the nonprofit brand managers we interviewed during our research had worked first in the commercial world.”
I often advocate that a brand is the emotional connective tissue between an organization and its customers. For nonprofits, where the emotional payoff is a key value driver, this concept is king. Let’s explore why brands are so important in creating this emotional connection between nonprofits and their stakeholders.
Brands create identity and differentiation
In the competition for philanthropic resources, it can be challenging to stand out and claim attention. Nonprofits’ brands create the unique identity that sets them apart and can draw supporters together.
Brands build trust and loyalty
Brands save mental real estate; they become a proxy for the organization itself. Volunteers and donors are more likely to develop trust and followership with a nonprofit brand that is clear, compelling and consistent. Nonprofits that demonstrate integrity, transparency, and social impact are more likely to build that trust and loyalty.
Brands communicate value–and values
Am I getting my money’s worth when I donate to your organization? The reputation, impact and mission of your nonprofit are all contained within its brand. Strong nonprofit brands create value through emotional appeal and shared values.
Brands drive engagement and advocacy
Donors and volunteers who connect emotionally with a brand are more likely to engage and become advocates. They are more likely to share their positive experiences with friends and family, provide feedback and suggestions, and participate in the brand’s community. This is the pinnacle of our brand equity hierarchy–brand loyalty–and the Holy Grail for every brand leader.
So nonprofits can definitely take branding lessons from their for-profit brethren. And in time, nonprofits will likely be teaching for-profits how best to develop and execute brand strategies. After all, if you can do it successfully when your philanthropic product is purely emotional, you can certainly do it with a more concrete product or professional service. Both sectors need what the other can teach, because the world is becoming noisier and noisier, no matter where you live on the business spectrum.