How to Market Your Nonprofit’s Earned Income Streams

Today I’m interviewing the fabulous Julia Davidson on how to market your nonprofit’s earned income streams.

What’s your background in nonprofit fundraising?
Three years ago I started a grad program in Public Administration at Portland State. My intent was to be an Education Director at a museum or public park – I started my career as an Urban Park Ranger in NYC and had a handful of interpretive education jobs. About a year into the program, I took a fundraising class and completely fell in love with the idea of using my passion and people skills to generate resources for the causes that are important to me. I’ve done fundraising work with several Portland nonprofits since then.

What’s your background in nonprofit marketing?
This spring I took a course that’s new to the program, “Effective Marketing for Nonprofits and Public Agencies.” It was taught by Dr. Billie Sandburg, a professor who has a great mix of theoretical knowledge, practical experience in the field, and enthusiasm for the subject matter.

When many people hear the word “marketing,” they think of promotion or advertising. Promotion is actually just one piece of the “marketing mix,” which includes the 4 Ps of product, price, promotion, and place. Here’s the definition of marketing that we learned in class: “Marketing is a set of functions for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”

How did you come to make a marketing plan for this earned income stream for this nonprofit?
The final project for my Marketing course was to make a detailed marketing plan with a team. Our team focused on an earned income stream for a local nonprofit focused on ending homelessness. The other team created a marketing plan for a new play at a local theater company.

What led this nonprofit to make this earned income stream?
Diverse income streams are important to any nonprofit. I think that becomes even more important for large nonprofits that get a substantial amount of revenue from government grants and contracts – if any of those go away, it’s essential to have other areas to rely on. This particular organization launched an income stream related to furniture a few years ago, and more recently launched a coffee roasting enterprise.

What were their goals with the marketing plan?
The organizational goals were to increase the revenue generated by the earned income stream in order to fund other programs to fight homelessness.

How did you start making this marketing plan?
The basis for the marketing plan was outlined in an excellent book that I would recommend to anyone interested in public/nonprofit marketing, “Marketing in the Public Sector: A Roadmap for Improved Performance,” by Philip Kotler and Nancy Lee. While it purports to be written exclusively for public agencies, most chapters translate very well for nonprofits. We started by collecting as much information as possible from the organization, researching target markets, and analyzing this information in the outline detailed below.

What were your goals with the plan?
In addition to the general goal identified by the organization, our team identified further goals of the marketing plan as 1) formulating a strategy for identifying potential customers across the country, and 2) contacting those agencies to create and improve awareness of the program in an effort to increase product sales.

What was the format of the plan?

We followed the format recommended by “Marketing in the Public Sector.”
1. Situation Analysis
2. SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis
3. Competitive Analysis
4. Review of Past or Similar Efforts
5. Marketing Objectives and Goals
6. Target Markets
7. Positioning
8. Marketing Mix: the 4 Ps
1. Product
2. Price
3. Place
4. Promotion
9. Evaluation Plan
10. Budget
11. Implementation Plan

What are some different ways this nonprofit is getting the word out about this new earned income stream?
Since this earned income stream is specifically targeted towards other homelessness nonprofits rather than the general public, promotion is a bit different than, say, the coffee program. We identified three main areas of promotion:
1) Customers as messengers – customers are encouraged and rewarded for referring the product
2) Organization as the messenger – materials such as the website and brochures, sending letters and then calling prospective customers, and bringing the product to conferences and trade shows
3) Third parties as messengers – newspapers, online news sources, and improving online search results

Did the nonprofit do market research around the need for this product?
In this case, the need for the product was already clear. The success of the product prior to the marketing plan could be attributed to the strong need locally and the strong relationship the organization has with the multitude of similar agencies in the area. It’s also known from anecdotal evidence that there is a need throughout the country. I know market research is important but I don’t have much experience in this area!

What do they hope to achieve with this product? More revenue? Awareness? Selling to other homelessness nonprofits?
The main goal is increased revenue, which could be achieved by greater awareness of the product among the target audience – homelessness nonprofits.

What would you recommend for other nonprofits who want to develop earned income streams around products, for their marketing plans?

Definitely pick up “Marketing in the Public Sector: A Roadmap for Improved Performance.” It’s clearly organized with lots of interesting real-world examples, and as I mentioned, the majority of it translates well for nonprofits.

Of course, I recommend putting in the time and effort to plan ahead before launching something – it may be tempting to see results sooner, but with strategic thinking you’ll see better results. I recommend developing an earned income stream that’s highly related to the mission of the organization – not just that the income will support the mission, but that the product itself will invoke the mission in people’s minds.

My personal favorite inspiration when it comes to earned income streams is The Rebuilding Center / Our United Villages.

http://www.ourunitedvillages.org/
http://rebuildingcenter.org/

Thank you so much for this informative interview Julia!

Julia Davidson is the marketing and outreach manager for NAMI in the greater Portland area, and a cavalier for social justice. She’s currently finishing her Master of Public Administration at Portland State University, for which she’s doing her thesis project with the National Alliance on Mental Illness – Clackamas County (NAMI-CC). Through volunteering and small-scale philanthropy she supports organizations focused on mental healthcare, women’s rights, LGBTQ rights, animal rights, and generally fighting oppression in all its forms. She also enjoys rollerskating and eating seaweed.

Does your nonprofit have earned income streams? How are you marketing them?