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No matter how you define it, philanthropy continues to be a part of our culture and our heritage. Some would even say it is part of our DNA. In an economy that has stretched too many people to the limits of what they can afford, nonprofits continue to thrive on the generosity of those who can contribute. In 2011, individuals contributed $217.79 billion to nonprofits, while foundations pitched in another $46.9 billion.
And it’s not all about money; scores of people also volunteer their time to make a difference. In 2012, one in four people volunteered in some form or fashion, fervently contributing 7.9 billion hours of service valued at $171 billion in 2011, according to the National Center for Charitable Statistics. Meanwhile, many employers struggle to find ways to engage and motivate employees being well compensated for their time. So what makes nonprofits tick? How do they succeed where traditional businesses with more resources fail?
The ABCs of nonprofits – three elements essential to the success of these organizations:
Here’s how they work:
The fundamental difference between for-profits and nonprofits is that the mission of nonprofits usually is altruistic. Nonprofits are focused on service to others as opposed to making a profit. “In the nonprofit world, passionate people are focused on filling an unmet need in society while the private sector is focused on selling a product or service and making a profit,” says Robert Thompson, VP, resource evelopment, at Save the Children, a global humanitarian agency. Not only do nonprofits serve a need and have a higher purpose – such as helping to feed hungry children or saving the whales – by their very nature they provide an avenue for individuals to engage their passions and satisfy their own inherent need to make a difference. As Daniel Pink wrote in his bestseller, “Drive,” “Carrots and sticks are so last century.” Pink believes that for 21st century work, we must upgrade to autonomy, mastery and purpose. “Most people desire the reward of knowing that they are making a difference – doing something that is helping someone else. It speaks to our altruistic nature and fills a void that working in the private sector often can’t,” Thompson adds. “Having that sense of purpose is very empowering. That is the source of a lot of energy and creativity in nonprofits.” Thompson says this need to serve a purpose particularly is important to the 20-somethings entering the work force now. Frequently referred to as the Millennials, this generation increasingly prefers making a difference to making more money. “I think this is fascinating. I recently heard a report indicating that 80 percent of Millennials put mission ahead of compensation in the workplace. This is significantly different from previous generations.” Companies trying to build their work force are taking note, flaunting their corporate consciousness and emphasizing their altruistic endeavors with their mission statements. For example, State Farm is “helping people manage the risks of everyday life, recover from the unexpected, and realize their dreams.” Starbucks’ mission is “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” While it may appear that Coca Cola’s mission is to ensure that everyone in the world drinks gallons of their products regularly, their stated mission actually is “to refresh the world…to inspire moments of optimism and happiness, and to create value and make a difference.” “The perspective that you are able to help others is very impowering and gives people that sense of purpose that is essential to our being,” Thompson says.
Relationships with employees, donors, advocates, volunteers and benefactors are at the heart of the non-profit dynamic. Thompson based his 30-year career in the nonprofit industry around two words – relationship building. “Quite simply, sustainable, authentic relationships with donors, volunteers, board members and staff are critical to the success of nonprofits – more so than in the for-profit world,” Thompson says. “Being able to develop a unique engagement opportunity to bond and build a loyal following that is sustainable and scalable starts with good interpersonal skills.” Kathy Keeley believes bonding is more important than ever. And as nonprofits struggle to do more with less and the demand for services increases, Keeley says margins are tight and there is rarely money in the budget for financial rewards for staff or volunteers. “So, connecting with them and facilitating connections among them is even more important,” says Keeley, the executive director for All About Development Disabilities, a 57-year-old Atlanta nonprofit. Keeley has spent the last 25 years working with profit, nonprofits and government organizations in every state and more than 20 countries. “We try to include opportunities and activities to connect and build relationships – go bowling or go on a picnic,” Keeley says. “We make it a priority to show our appreciation and make sure our staff and volunteers see how they are helping to make a difference. The ongoing challenges create cohesiveness and spur creativity.” Likewise, Keeley says relationships within the community are essential to the success of her organization and to the overall health of the community. “Relationships that we have with businesses and government organizations within our community form the foundation of a healthy community. We need each other – I fill a gap in services that they can’t provide. Together we make a healthy, vibrant community.” Long-established nonprofits frequently nurture and enjoy multi-generational relationships with devoted families. “We have many donors today whose families have been involved since the charity was first started more than 125 years ago as an orphanage,” says Alexandra Reardon, vice president of resource development for Thompson Child and Family Focus, a nonprofit headquartered in Matthews, N.C., that focuses on aiding children and families. “We make it a priority to keep our donors involved and let them know what a difference they are making by constantly sharing results, which are, after all, due to their investment in our mission.”
Nonprofits recognize that donors, volunteers and advocates all enjoy knowing their gifts of time and money are making a difference. Unlike for-profit companies, whose marketing strategies involve convincing targeted audiences they should buy their products, nonprofits targeting current and potential donors, advocates and volunteers frequently engage their audience with stories and anecdotes that illustrate and
celebrate their organization’s successes. In these real-life chronicles – with the help of patrons, donors, advocates and volunteers – a young boy in Haiti gets regular meals, a village in Africa gets a well for drinking water, an underprivileged high school student in Mississippi gets a college scholarship – lives are improved. “Nonprofits focus their marketing on the impact they are making on their beneficiaries – people and institutions,” Thompson says. “That’s why storytelling is very important. The marketing differentiates them from other nonprofits and highlights the positive outcome they are having on others as opposed to marketing in the private sector that usually maximizes the appeal of a product or service.” Thompson, who has 30 years of experience leading nonprofits, says that both compete for impressions in the marketplace. “They both want to be top-of-mind or tip-of-tongue, but nonprofits tend to speak to our hearts rather than our wallets.” Many for-profits are discovering the marketing value of storytelling as well. As marketing enters the post-advertising age where people choose which messages they see and hear, engaging and entertaining stories have a greater chance of not being TiVoed out, clicked away from or banished to the spam folder. The best stories are becoming internet sensations. In March, Pepsi MAX’s Jeff Gordon spot logged 33 million views – about 13 million more than 2012’s most-watched spot had for the entire year. In April, two viral ads did even better than the Pepsi MAX video. The first was a video from Ogilvy Brazil, uploaded to YouTube on April 14. Five days later, Evian posted its latest Babies commercial from BETC Paris. Both spots stormed past the Pepsi MAX view count to become 2013’s most-watched YouTube ad to date. Interestingly, like nonprofit pitches, these video chronicles tugged at hearts rather than wallets and spotlighted the altruistic rather than the egoistic. Perhaps there are other lessons we can learn from nonprofits as well.