This article was written in collaboration with gender and human rights specialist Fernanda Vanegas.
For-profit and non-profit organizations have a clear and fundamental difference related to the very reason of their existence: the goal of profit-driven organizations is to generate income and profits –redundancy intended- for their stakeholders, whereas non-profits are focused in serving a humanitarian, social or environmental cause, that is, without profit.
Depending on the countries and legal systems through the world, non-profit organizations might have different forms: political associations, fraternities, sports leagues, charities, hospitals, universities, museums, NGOs, international organizations…
The concepts of “investment” and “return of investment” are a part of a profitable organizations’ DNA. ROI function as a sort of stimulus for companies, pushing them to a permanent quest for efficiency and productivity. That’s why one of the four strategical areas of any company is its Marketing or Commercial area. This is naturally unlikely to occur in a non-profit organizational chart, where the primary goals are measured in terms of impact and non in profit or revenue.
Over the time, NGOs -specially the larger ones- have taken into account that introducing administrative processes inherent to profitable companies into their structures may allow them to be more sustainable and resources-efficient in the long run. For example, we can see that several non-profits have developed strong communications skills –PR, Public Affairs, advertising campaigns produced by the most prestigious advertising agencies worldwide- in order to stimulate fundraising initiatives or to raise awareness in regards to a specific mission.
NGO’s are indeed often dependent of fundraising or sponsorship, ant they are actually the most “popular” type of organization when we think about non-profits. However there are some other non-profit structures that have a tradition of selling services or products in order to maintain an independence and sustainability over the time via self-financing systems.
Traditionally, marketing is associated to commercial purposes in a negative way and there is much confusion about the difference between marketing, advertising, sales, PR, and communications… But if we talk about structures manufacturing and producing services or products in order to self-finance their social activities, we are clearly talking about marketing-dependent organizations. Just let’s think of universities –yes, Harvard is a non-profit- or of the Christmas postcards produced by UNICEF: independently of the mission statement of the organization, in the operation we are clearly talking about a commercial transaction.
So marketing has an important role to play within non-profits: it is a fundamental tool to fund a whole, and it allows to plan the development and growing over the time of the organization. It is clear that the limits between profits and non-profits organizations, in the practice, are becoming more and more blurry. This also reminds us the importance of marketing as a motor within structures: marketing fuels the organization, and if we stop reducing it as a “sales department”, we will be able to understand that marketing can respond to a social purpose and that has in common a mission inherent to non-profits: to satisfy the need of someone.
However, bringing “marketing” is not just hiring a marketing manager, but it implies a deep cultural transformation within an organization: it means i. being able to identify your audiences strategically, ii. to listen, study and understand them, and iii. Assuming the idea that you will not only have to meet your mission’s goals, but that these will depend of your capacity to meet your customers’ expectations.