Is a commercial brand strategy necessary for non-profit organisations to achieve the social good they strive for? It certainly throws up many ethical questions, including concerns about the over-commercialisation of the sector, and the misappropriation of techniques that were developed specifically for a commercial environment. Can these issues be overcome?
Ave Creative Director Ellie Thompson explores the advantages and value that brand strategy can bring to the NFP sector, whilst considering the risks and controversies.
With the increasing number of not-for-profit organisations, and the transfer of more and more social responsibility from the state to charity since the instatement of the Conservative government, it has never been more important for NFPs to engage effectively with multiple audiences. Amid the competition, it is simply a matter of survival to recognise, define and build their brand. However, it is widely acknowledged that public opinion tends to view any kind of commercial activity by such organisations with suspicion.
It is true that commercial objectives connected directly with social good are potentially problematic, and can dramatically affect the way an organisation is perceived not just externally, but internally. Research into NFP organisational structures within the voluntary sector has found that, while these structures can be advantageous to resourcing, maximising efficiency, and improving internal and external communications lines, they can also contradict and compromise an organisation’s values. Maintaining a brand or rebranding can also be controversial among volunteers, stakeholders and employees who work with an organisation because of their pure commitment to the brand’s values and mission. In the same way they may be sceptical about the employment of staff with private sector business experience, and sceptical of the adoption of managerial terminology, they could be concerned that there will have to be a reorientation their values along with the brand. Another issue is the notion that the organisation may be reallocating resources from active campaign to embark on commercially motivated initiatives.
Meanwhile, in terms of public perception, ‘co-creation’, collaborations in the form of celebrity endorsements and commercial partnerships, can enable charities to promote and increase the volume of a campaign’s voice at an international level. The backing of a high-profile celebrity can drive considerable awareness for particular campaign, as long as there is a correct alignment of values and a unified dialogue is adhered to.
However, some partnerships, especially with commercial enterprises, have received criticism for being exploitative, and have raised questions of ethics and morality. Large corporations, which are under political pressure to accept growing social responsibility, are frustrated by the governmental movement towards strategic philanthropy, and as a result can view the financial contributions they make more a form of business transaction than an act of altruism. These relationships can therefore be detrimental to a charity’s brand image, as increasingly socially-aware consumers voice concerns about corporate business practices. A high degree of scepticism has developed about the private company’s involvement in these ventures and the general sentiment is that their motivations are driven by profit, not philanthropy.
Despite these issues, it is my opinion that charities must create an appealing brand and brand strategy to align with their internal and external organisation, as a way of attracting and maximising resources. This is of particular relevance today when we see in the news that many charities are being forced to close due to diminishing availability of funds, and a reduction in the amount of charitable giving post-recession.
Since the 1980s NFPs have become increasingly aware of the value a cohesive brand strategy can add to their organisation, and more are beginning to embrace commercially driven marketing techniques. Brands have since taken on a new economic resonance by being able to communicate many immaterial values, and therefore can be seen as a new form of information capital. With the increasing number of jobs that fulfil intermediary roles between producer and consumer, such as market researchers, consumer data analysts and brand strategists, we see that branding has moved away from its commoditised origin and is now a tool for organising the internal and external perceptions of an organisation by means of analysis and patterning of information.
Using the brand personality to emote traits such as heroism or innovation, and employing a distinctive philosophy or style of management, are all strategies that can differentiate a charity. Simply having a brand isn’t enough – it needs to be actively managed in order to create the most value. Brand strategies and management techniques exist to extract that value. Successful brand differentiation, and use of brand strategy, leads to brand awareness, and internal and external alignment, which creates a clearer path to the attainment of financial and human resources. Furthermore, the development of a brand personality allows an NPO to strategically position itself in a marketplace and begin transference of information between the intellectual or symbolic projection of a NPO’s identity and the interpretation of this by consumers to develop into a coherent image.
When analysing brand strategy theories, it is critical to note that while values in the private sector are instrumental and therefore flexible and able to be changed according to consumer perception, values in a NPO are intrinsic, and they cannot be compromised. They relate purely to a charity’s quest to improve society, and a charity’s core beliefs generally encompass traits such as being caring, challenging, as well as engaging with a disadvantaged and disenfranchised minority. This is generally inflexible. This contrasts with brand values seen in private sector organisations, which are self-defined, analysed and reshaped by organisations, and as such they have a perceived temporality by the public.
There are also key motivational differences between the two sectors that are a result of differing structures of their market place. In a commercial market there is a linear exchange between producer and consumer, however in the non-profit marketplace there is a third step: we see key funders/donors exchanging with charities, which then in turn exchange with their beneficiaries. Therefore charities have to be aware of commercial and non-commercial concerns simultaneously. It is sometimes considered that commercial brand management theories are inappropriate for use within the non-profit sector because the market they operate in and the organisations themselves differ on fundamental levels, but it is the shared aim of wanting (in the private sector), or needing (in the non-profit sector) to attract money that makes me believe it is in fact totally appropriate for NPOs to adopt brand management and brand strategies. It is just that in the case of the NFPs, capital is reinvested for the benefit of society.
Successfully applied, brand strategy allows organisations to attract more volunteers (and better quality ones, at that), increase its donation stream, create bonds of trust with stakeholders and interested parties, and attract more attention to its educational initiatives and campaigns. As a result of this we have seen the many positive results that are of direct benefit to society, such as increased availability of charity services and policy changes. With charities developing a voice that really resonates with the public, we’ve also seen significant benefit to society being made through various co-creation efforts, discussed earlier, which have led to large corporate organisations taking responsibility for their ethics and production processes. While some of these brand strategies can be seen as controversial and potentially damaging to a charity’s brand, I believe that the benefits of using these strategies successfully outweigh any risks. Implemented successfully, they can reap rewards for society, and not just a commercial organisation’s pockets.
On a wider perspective, my observation is that there is a growing convergence of the non-profit sector and the private sector, whereby private sector businesses are focussing more on projecting themselves as ‘values oriented’ organisations, and NPOs are focussing more on professionalism and efficiency. Furthermore, this is leading towards the marketization of the non-profit sector and is, I believe, a direct result of the changes in how funding is obtained by NPOs over the past 40 years.
These strategies are vital for the long-term sustainability of an NFP if it’s to keep up with consumer trends and gain the resourcing it needs to continue to operate. NFPs have to be able to talk to potential donors in a language that is relevant and resonates, and use techniques and mechanisms that help the consumer relate to them better.
The only problem I see for NFP brands is less a moral issue, and more of a strategic one. They have to be more savvy and selective in how they adopt and manipulate strategies – they have to do it their way, the ethical way, and take the time to assure staff, stakeholders and the public that branding exercises do not have to mean a shift or compromise in values. And that an increase in resources, both human and financial, can only ever be a good thing.