In 2013, activist and fundraiser Dan Pallotta gave a TED talk about the fundamental way we think about charities and their operation. He surmised that there is a double standard by which nonprofits have been measured. Most nonprofits have been rewarded for how little they spend rather than how much impact they have. In essence, Pallotta posed this question: “By investing in its staff and devoting more to marketing and operation, the overhead, could a nonprofit grow in size to tackle bigger problems with greater success and impact?”
Unfortunately, the enduring belief has been that nonprofits should operate with as little overhead as possible, meaning that nonprofit salaries have been much smaller than their for-profit counterparts. Because of this, nonprofits are at a competitive disadvantage and have had a much harder time acquiring the talent and brain power necessary to respond to the big problems facing us today.
Furthermore, nonprofits have only been able to focus a small percentage of their budget on marketing and fundraising, which has ultimately stymied their growth, if not killed them off all together. If no one knows you exist because you can’t afford to market your mission, how can you make an impact as a nonprofit? Clients won’t know how you can help them, and donors won’t understand why you're asking them for money.
Pallotta’s TED talk, viewed over 3-million times online, may have been the catalyst for the three largest charity-rating organizations to write an open letter to American donors. This letter reversed what had been a long-held belief that nonprofits must operate on fumes and instead emphasized that a nonprofit's overall impact—regardless of how much they spend on overhead—is the most important aspect to consider when planning to contribute those donor dollars.
We usually rely on nonprofits' passion to help us deal with mega problems facing our society today: hunger, natural disasters, child trafficking, environmental concerns. In addition, nonprofit organizations inspire us through their arts and cultural programs. All this works together to make us a better people. Nonprofits do this day in and day out, but because we don't see results first-hand, we usually have no idea of the larger impact these nonprofits are making on the world around us.
Perhaps with more investment in marketing and communications, as well as in staff resources, nonprofits will become as well-known and respected as Apple(R) and Whole Foods(R). Maybe then we'll have a better understanding of how nonprofits play a role in our daily lives.
When it comes to increasing revenue and building brand awareness, nonprofits have something that some for-profit companies do not: compelling stories of hope, heroes and change. These stories resonate with all of us who hear them, see them and read them. They inspire and challenge us to promote necessary change to become better. Unfortunately, with nonprofit marketing and communication budgets tightened by old thinking, these stories are lost on deaf ears.
At this time of year, as nonprofit budgets are being considered in board rooms around the country, it's time to realize that an investment in overhead will pay dividends in the future. Investing in staff and marketing is essential for growing. And with growth comes promise.