Market Spotlight - Nonprofits
A Closer Look At Sales Opportunities In The Growing Sector
With more than half a million registered 501c3 organizations in the U.S., there is no shortage of potential nonprofit buyers of promotional products. And, it's a market that presents growing opportunities – and sales – for distributors. In 2011, according to Counselor's latest State of the Industry survey research, sales to nonprofits represented 6.5% of ad specialty industry revenues, rebounding from 5.6% a year earlier.
As evidence of more potential for growth, the late 2011 Nonprofit Fundraising Study found that 40% of not-for-profit organizations expected to increase their overall budgets in 2012, while 37% expected them to stay the same. Just 20% planned to decrease budgets, the lowest proportion since 2009.
"In my budget this year I've just been approved to buy some promotional products, so I'm very excited," says Beth Lacey Gill, director of marketing, communications and rentals for the nonprofit Irvine Nature Center based in Owings Mills, MD.
Gill began at the organization right as the economy began to turn down, and has had almost no budget for promotional products until this year. The Center had a bulk order of branded tote bags, water bottles and first-aid kits that staff had made stretch over the past three years, but they bought virtually no other promotional items.
"We used the bags for all kinds of things – we use them for media kits instead of folders, as well as in our giveaways and when we do silent auctions for schools," says Gill. Now that her organization has a larger budget, Gill expects she will be looking for new products, placing a premium on price, quantity and versatility.
Distributors looking to target the increasing opportunities within the nonprofit sector should know one fact about today's buying habits: Nothing is as important as proving the return on investment of purchases. Nonprofits are, indeed, increasing their promotional product purchasing activity, but they now have their eyes squarely set on ensuring a good ROI on their campaigns. With costs still a priority, it has become incumbent on distributors, experts say, to emphasize the ROI of promotional products if they are going to appeal to the boards, directors and other decision-makers at nonprofit organizations.
"Budgets are definitely tight, but I think the result of this squeezed economy has been much better decision-making on the part of the marketing spend," says Nancy Schwartz, founder of nonprofit marketing consultancy Getting Attention. "Before, perhaps, there was not as much strategy put in or as much analysis of what was working, and now there is a trend toward improving that."
This means it is more important for ad specialty distributors to speak about promotional products on a higher, more strategic level, according to Schwartz, discussing them in the context of a nonprofit's long-term branding goals.
Howard Brodwin, founder of SportsandSocialChange.org, a networking site for sports-oriented nonprofits, has seen a similar trend among the organizations he works with. He urges many of these nonprofits to put a greater emphasis on branding that goes beyond pure fundraising efforts. While many of these organizations have a clear mission and sense of what their group stands for, Brodwin believes they have had trouble with communicating this brand message through memorable and consistent visuals and logos. He thinks this is where promotional products can make an impact – and where distributors can find their opening to create relationships with nonprofits.
"Promotional products have always been such an integral part in the broader spectrum of marketing and branding for major companies, and it's no different in the nonprofit space if they choose to take advantage of it," Brodwin says.
Brodwin points to organizations like the Special Olympics as a model brand, which maintains a consistent image across 70 countries. On a smaller scale, he says, is the action sports organization Stoked Mentoring, which developed a memorable logo that it uses on every one of its marketing materials.
In addition to SportsandSocialChange.org, nonprofit networking sites like iWanna
Help.net and Young Nonprofit Professionals Network offer rich opportunities for sales leads. Websites like Guidestar.org, which allows visitors to view the tax forms of nonprofits, can help for more selective prospecting.
Nonprofits are increasingly trying to attract visitors to their websites, which presents an interesting sales and marketing opportunity to ad specialty distributors. According to the Convio Online Marketing Nonprofit Benchmark Index Study, online fundraising grew 15.8% in 2011, after rising 20% the year before.
Ideally, distributors should be helping nonprofit clients create campaigns that drive consumers to their websites – offline marketing (including promotional items) that drives online traffic.
In addition to online efforts, mobile technology has grown increasingly important to nonprofits' fundraising efforts. Text-to-donate technology and apps like the new GiveMobiley or Givabit have made giving to nonprofits simpler and more immediate. This has been seen most dramatically during times of disaster, like when the American Red Cross (ARC) raised $10 million in the four days after last year's Tohoku earthquake in Japan.
Allowing micro-donations through mobile phones presents rich opportunities for promotional products. The phrase "Text 90999 to Donate $10" for the ARC, or something similar for another charity, could be imprinted on a huge range of products, involving fewer steps and likely more of a return than a URL or phone number.
Proforma MaKay Printing and Promotions (asi/300179) services a number of nonprofits and has found that they are trying to get more creative with their use of technology and seeking promotional products that can help them do that.
"I sit on the board for a local juvenile diabetes chapter and one of the things that came up was to have a live message board at our annual gala allowing people to live tweet to get the word out," says Victor Mogell, owner of Proforma MaKay. "Whether it's a promotional product or a direct mail piece or a QR code, they're looking to do more aggressive marketing."