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The rise of non-profit Marketing has been profound in recent years. Some estimates place the size of the non-profit business sector at one-fifth of the total US economy.

But what is a non-profit organization? The phrase itself refers to any firm which is recognized by the government as not having a profit motive underlying their business efforts, and thereby avoids taxation. By definition, an NP company does not seek to redistribute profits to owners or shareholders. This is confusing, however, for "non-profit" organizations still function much the same way as for-profit organizations, and in fact are often indistinguishable.

Critics may view non-profit Marketing as merely a clever way to dodge the tax man. This is not entirely true, though, as non-profits have an extra layer of accountability that for-profits do not have. But just because an organization enjoys non-profit status does not mean that it cannot, or should not, use the same Marketing techniques that for-profits rely on.

The purpose of this lecture is to take a closer look at the various types of non-profit organizations and firms, and to discuss the unique Marketing characteristics they face. Finally, appropriate Marketing strategies for non-profits will be presented.

Non-profit organizations and firms run the gamut, encompassing a wide variety of "business" formats. On the Internet, non-profits generally are those sites with any of the following domain extensions: ".edu," ".gov," or ".org." (For-profit firms have the ".com" extension instead, although there are some non-profits who use the extension.)

The following list illustrates the many varied forms of non-profit Marketing:

1. Educational Institutions. This includes all levels of education, from elementary schools all the way to college and professional schools. It also includes public and private institutions of learning. While both types function as non-profits, they differ significantly in their funding. Public institutions are recipients of tax dollars collected from all citizens in a particular taxing area, while private schools are funded directly by its students, as well as sponsoring organizations (e.g., church denominations), individuals, and corporations. Public institutions are accountable to their various governments, while private institutions are accountable primarily to their supporters.


Regardless of accountability, the product is essentially the same: education. Furthermore, it is marketed much the same way. Compare the educational offerings of West Texas A&M University and Dallas Baptist University.

Educational institutions are all competing for students. They try to distinguish themselves by the programs they offer, their friendliness and personal service, as well as religious orientation, quality, innovativeness, and convenience to students.
 
 

2. Religious Organizations. The United States is fairly liberal in its recognition of religious groups, as well as in granting non-profit status to them. In the absence of a state religion, virtually any group is free to organize themselves as a religious entity, and enjoy the same rights and privileges as any other religious group. Religious groups may even have very "profitable" enterprises under their non-profit umbrella, such as publishing and even banking (at the denominational level).


Much criticism is levied against religious organizations, for they are in a position to push the envelope of non-profit status to the limit. While most religious organizations are not guilty of this, very visible religious figures (e.g., TV evangelists) and even local congregations with inflated payrolls and elaborate campuses begin to look more like corporate America than the tax-sheltered local church the laws were set up to protect.

These religious organizations engage in a wide variety of Marketing efforts. In addition to trying to attract converts to their faith and their congregation, these groups frequently offer daycare and educational services.

Marketing for religious organizations ranges from subtle and professional, to shameless and tacky. Paid religious programming on TV and radio (paid for by local and or national religious groups) is essentially a program-length advertisement. Other less prosperous groups will engage in shenanigans that will see a preacher eating dinner on the church roof if attendance tops a certain mark.

There are national religious publishing houses that prepare somewhat generic newsletters that local congregations can buy. For a fee, the publisher will print the name of the local church on the stock newsletter, and even mail them to a database provided by the church. This allows small churches the ability to market themselves with professionally-prepared materials that have a localized look and feel to them. Content is usually pretty basic, being careful to not cross too many doctrinal lines.

Churches are rapidly beginning to see the value of promoting themselves via the Internet. Many churches are developing their own websites. For example, Paramount Terrace Christian Church in Amarillo has a nice website that promotes all of the various ministries and activities of that congregation.

3. Professional Associations. Nearly every profession and trade has its own regional and/or national association. These associations serve to authenticate the work of, and promote the interests of, its members. These groups also help set standards for professional conduct. For example, the American Marketing Association promotes Marketing as a discipline and profession, but also establishes guidelines for ethical behavior.


The balance between the various activities will differ by group. For example, beef and dairy associations are most interested in promoting consumption of those products (which will benefit its members ultimately), but the American Medical Association is centered on maintaining professional standards for the practice of medicine.

Trade unions are another example. The United Auto Workers (UAW), for example, conducts large-scale Marketing efforts trying to convince people to buy only American-made products which will ultimately support the workers they organize.

4. Advocacy Groups. There are untold thousands of advocacy groups in the US. By definition, an advocacy group is an organization whose mission is to effect a change in people's beliefs and/or actions. They may be lobbying groups; they may be activists. In any regard, advocacy groups are a very visible type of organization, and it is not uncommon to see two different advocacy groups on either side of an issue.


Advocacy groups are wide-ranging in their scope. PETA (People for the Ethical Treatment of Animals) is an activist group that is strictly opposed to any unethical use of animals, including food, clothing, and research. Earth First! is primarily an environmental group opposed to pollution, the clear-cutting of forests, and commercial development of environmentally sensitive lands. Earth Save promotes environmental issues as well as animal-free diets. The Sierra Club and Greenpeace are examples of others advocating environmentalism and pacifism, respectively. You are all well aware of these types of groups following your mid-term exam!

But not all advocacy organizations are concerned with the physical environment. The National Rifle Association (NRA) lobbies for the rights of citizens to bear arms. Adbusters criticizes the prevalence of Marketing in American society, and even instructs malcontents on how they can sabotage market research efforts and stand up to large corporate Marketing efforts. And the Ad Council tries to educate people on the dangers of drug use, among other things.

5. Hospitals. The medical industry is currently undergoing a transformation from primarily non-profit to for-profit. Whereas hospitals were almost exclusively the domain of either local governments (e.g., Amarillo's Northwest Texas Hospital, prior to its sales) or church groups (e.g., Amarillo's Baptist St. Anthony's Hospital and the Veteran's Hospital), the trend is toward corporate ownership. For example, Northwest Hospital was sold to Universal, a nationwide corporate chain of hospitals. Columbia/HCA, with 340 units, is another chain of hospitals that has been expanding by either buying existing units, or building new ones (they recently suspended plans to build in Amarillo, though).


The trend toward for-profit health care has raised much controversy among a citizenry that thinks health care is a public "good" that should not earn a profit. Fears over indigent health care cause many to rally against corporate ownership of hospitals. On the other hand, supporters claim that for-profit hospitals will be run more efficiently, and furthermore that municipalities and churches should not be in the health care business to begin with.

6. Government Agencies. There are numerous government agencies that are run like businesses, but lack the profit motive. Perhaps the most visible of these is the US Postal Service, which has a monopoly on all first class mail, but competes with private couriers for parcels and overnight document transport. Other examples would be the Department of Energy, NASA, and the Jet Propulsion Laboratory.


 On the local level, it can include mass transit authorities, which would include buses and commuter rail lines. In the case of commuter trains, they operate in places where private companies would often have great difficulty operating. For example, many commuter lines have been built in the medians of major freeways.

Parks and recreation are an area frequently in the NP realm. These can be municipal parks and swimming pools, as well as state and national parks, like Palo Duro Canyon State Park, or Yosemite National Park. These facilities charge admission fees, but these seldom cover administrative costs. Their main form of support comes from their governing agency.

A final aspect would be the marketing of municipal, regional, state, and even national areas in an effort to lure tourists and industries. The Amarillo Economic Decelopment Corporation is a tax-supported entity that seeks to attract industry to locate in Amarillo, and uses part of their funding to allocate subsidies to prospective companies.

7. Politicians/Political Groups. While it may be argued that individual and collective political interests are ultimately for-profit (winning an election is far more profitable than losing), these entities are still viewed as non-profit. Their sole purpose is to promote an ideology. While groups and individuals can often amass impressive war chests from donors (as evidenced by the current controversy with President Clinton), it is still viewed as a NP endeavor.
8. Miscellaneous Societies and Groups. These generally take the form of social adn activity-based clubs. For example, the Skeptics Society is a non-profit organization dedicated to promoting free thinking and skepticism. These organizations often serve as clearinghouses for information, as well as governing agencies for a particular activity. The Beer Can Collectors of America serves as the official organization for beer can and brewery memorabilia collectors, and publishes a magazine and hosts an annual "Canvention" for its members.


It is quite common for the many varied kinds of clubs to seek non-profit status. It shelters them from taxation, but more importantly often shelters the members and officers from legal liability.

In sports, the national governing body (NGB) is usually a NP entity. Each sport usually has at least one sanctioning body which oversees and authenticates athletic efforts.

9. Fund-Raising Organizations. There are two broad categories of fund-raising organizations: research-based, and distribution-based. The former solicits contributions for the purpose of conducting research, usually in search of a cure for a particular disease. Examples include the American Lung Association, the American Cancer Society, and the Muscular Dystrophy Association.


The latter is concerned with distributing its revenues (cash, material, and otherwise) to people it deems needy. For example, the Salvation Army distributes clothing and food to those lacking these essential items. The Red Cross helps disaster victims. The Maverick Club provides activities and facilities for urban children.

10. Miscellaneous Institutes and Foundations. This includes a wide variety of "think-tanks" and charitable organizations that conduct agenda-based research, and/or fund special projects or individuals. In Amarillo, the Harrington family has funded many local groups and projects, ranging from the Discovery Center to the string quartet bearing their name.
11. Museums and the Arts. Not all museums and arts groups (drama, symphony, ballet, opera, etc.) are NP, but many are. Their purposes are to serve as repositories of information and culture, and for the appreciation of art forms, respectively. WTAMU's Panhandle Plains Historical Museum, The Smithsonian, and Chicago's Shedd Aquarium are all examples of NP institutions, as are the Lone Star Ballet, the Amarillo Symphony, and even the Harrington String Quartet. These entities depend on a variety of funding sources, ranging from state and national governments, to corporate and individual donations. The availability of these services is considered a cultural "good," and is supported widely across all walks of life.
12. Public Radio and TV. The Public Broadcast System (PBS) and National Public Radio (NPR) are unique among the media in that they provide non-commercial programming, surviving strictly by corporate and individual contributions. They also depend greatly on volunteers to help in fundraising efforts.

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