While ‘marketing’ may be a term reserved mainly for the private sector, we can all agree that your nonprofit can benefit from telling your story to a broader audience. While the pandemic, questions around funding, and stakeholder pressure also bring increased workloads and a need for nonprofit communications teams to respond faster than before, there are some silver linings.
In-person networking and fundraising events are still not as frequent as pre-pandemic events. Nonprofit leadership teams have had to develop a deeper understanding of how investing in marketing can help their organization attract potential partners, raise awareness, measurably impact fundraising, attract volunteers, or reach stakeholders needing services.
Nonprofit Communications Trends
According to the 2021 Nonprofit Communications Trends Report, most nonprofit marketing and communications teams reported the following forward-looking communications trends as outcomes due to the pandemic.1
- Appreciation by leadership for investment in digital communications strategies
- Willingness to test and implement creative new ideas without fear of failure
- Increased participation of program staff to contribute content, including video
- A strong show of support from newly-engaged audiences via online communications
- These positive effects have paved the way for nonprofit communication teams to lobby for additional marketing budgets for their organizations successfully.
It is also critical to keep in mind that communications efforts are more than just about raising funds and awareness. Marketing can create emotional connections by allowing your organization to put its ‘stake in the ground.’ Establishing a strong viewpoint, voice, and your ‘why’ is essential in a crowded landscape. It’s no longer just nice to have; it’s a necessity — particularly when nonprofits’ target audiences actively seek ways to become more involved and connected. Your brand and your story are crucial.
The Old Way: Communications Budget Status Quos
And now comes the tricky part: deciding how much to spend on marketing versus programs that fulfill your mission. How much time and resources should go to marketing tactics such as digital marketing, direct mail, a website redesign, or a logo or brand refresh?
A general rule of thumb says to allocate between 5-15% of your operating budget to marketing. It is somewhat surprising to note that almost 20% of nonprofits have no firm budget and ‘find’ a budget when needed. But treating marketing needs as ‘emergencies’ turns them into just that.
One major issue that has kept nonprofits from investing more in marketing is the controversial measure often used to gauge the effectiveness of nonprofits by charity rating sites — the question of how much of the operating budget goes to overhead expenses. The old wisdom was that the lower the number, the better the nonprofit ran.
But is that really true? Low overhead leads to a practice of not investing in the nonprofit’s future. How can nonprofits be effective using outdated technology, paying sub-market wages, and not investing in impactful marketing and communications to help tell your story to a broader audience, attracting talent, funds, and partners? How can overstretched communications teams effectively manage all facets of various communications channels without support from a creative agency with the right expertise?
Looking historically at the current operating budget and taking a straight percentage of that figure for marketing, communications, and fundraising is a potential trap. What if the organization’s budget has decreased? A blanket 10 percent for marketing (for example) of a shrinking budget is a shrinking marketing budget.
Using that old rule of thumb, decreasing your marketing budget could be the exact opposite of what is needed at that time! A ‘death spiral’ could ensue if budgets continue to decline and communications budgets are cut, resulting in lower fundraising and further budget cuts. Switch the marketing budget from following the organization’s growth (or decline) to a driver of growth!
The New Way: Goal-Driven Nonprofit Budgets
So, instead of allocating a blanket percentage to marketing, we advocate for the budget to adapt based on your organization’s goals and various tactics’ return on investment. We believe that taking a page out of the private sector playbook is essential — set goals and targets for your communications spend. Have your marketing staff set realistic but firm goals at the outset of the budget period, and spend what it takes to achieve those goals.
Some examples could be measuring your digital or direct marketing response rate, actual dollars raised per dollar spent, or press contacts made per media placement. A digital fundraising campaign, for example, is much easier to quantify results than media placements, but both are important.
Your marketing goals and KPIs should directly tie into the organization’s goals. For example, an annual goal of ‘raising public awareness’ could directly tie to a measurable digital marketing campaign. If your organization doesn’t have goals, that’s the first issue to solve. Marketing efforts will ladder in and support those goals.
Marketing goals should also be fluid and ‘living.’ Adjusting to ensure they are realistic is OK. Depending on your team’s experience, goals may need to be tweaked as learnings come in to ensure your budget is as accurate as possible. As time passes, the marketing spend will become a dialed-in machine, with much better ROI projections before starting.
Nonprofit Communication Channel Strategy
In addition to establishing goals, examining which communication channels will best support them is essential. In 2020, nonprofit organizations reported that email has become their top communication channel (up from 3rd place behind website and social media about 5 years ago).1
However, these same organizations recognize that focusing only on speaking to the subscribers on their email list limits the opportunity for growth and awareness among new audiences. While leveraging an email list for communications can be low cost, it does require a team to produce and distribute the content and a portion of the marketing budget dedicated to sustaining email list growth over time.
With a limited communications budget, nonprofits can use grants to fund their campaigns. Eligible nonprofits can apply for a $10,000 Google Grant to fund their Paid Search marketing efforts, which can help bolster their email growth effort and raise awareness for the organization’s work. Learn more about the steps needed to register for Google Nonprofits program and the Google Paid Search Grant.
Through Vermilion’s work with the Milbank Memorial Fund, our Digital Marketing team considered their budgets and goals to recommend a marketing plan, which included leveraging a Google Paid Search Grant. With an opportunity to measure results and report to leadership on campaign performance, “we have our organization’s support to try to meet people where they are but also have to work within a fairly tight budget,” relayed Milbank’s Communications Director, Christine Haran. Her team’s goals are to gain and retain email subscribers, gain Twitter followers, and increase traffic to the website. “I think all three are essential to getting our population health messages to our target audiences, including state policymakers, health policy, and public health researchers.”
Considering the communications team needed to support these channels is a key element to the recipe for achieving set goals. Approximately a third of nonprofits report having a single staff member responsible for their organization’s communications, but studies have shown that having three full-time communicators is the sweet spot for efficiency and effectiveness in managing cross-channel communications strategies.1
With renewed faith that marketing and communications investment is a necessity, and by setting firm goals against that spend, your nonprofit’s budget should be positioned to be more defensible. But most importantly, the benefits of this investment will be more precise and should improve over time.
