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What’s with the rub between fundraising and marketing?

August 28, 2010

For years we have dispensed the advice that nonprofit organizations are “real businesses” too and should, in many ways, be run the same way as for-profit businesses. While this makes for a good attention getter with clients who are seeking direction in getting on track and making progress with an org that has lost its way, we have to admit that it’s a fundamentally flawed hypothesis as it relates to the underpinnings of why each type of business exists.

Legally speaking, it’s true that nonprofits with a 501″x” designation are just businesses that are exempt from certain taxes. A closer look at why businesses are started, whom they serve, and their motivations for continued operations is where the two models diverge rapidly.

While there are some exceptions, it can be put simply that for-profit companies provide units of value for the purpose of raising money, while nonprofit companies raise money for the purpose of providing units of value.

Despite these contrasting archetypes, there are common elements that apply similarly to both. We’ve posted previously about competitive compensation and will continue to argue that nonprofit organizations must compete with for-profits when it comes to hiring and retaining the best talent that society has to offer.

The latest area of focus is on fundraising and marketing, and their relation to one another within nonprofit organizations. This is a surprisingly contentious issue amongst many of our fundraising peers, and is one we intend to continue exploring here and in our day-to-day interactions.

Having worked in marketing for nearly 20 years, I’m accustomed to conflicts between marketing and sales, marketing and manufacturing, and marketing and [insert any production label here]. So it was no surprise to me when I entered the nonprofit sector that there would be a rub between marketing and some function. However experience had taught me that the conflict would be with the programming function, not fundraising. After all, the two are very similar in many ways. So what is to blame for the discord?

Typically, the classic conflict catalyst for marketing and its counterpart functions has been poor communication and coordination between the two functions. This is no doubt as true for nonprofits as any other business. In some cases, there’s also a mutual lack of respect between functions and their relative levels of professionalism or expertise.

What other possibilities exist for the poor relations between marketing and fundraising in NPOs?

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One Comment leave one →
  1. Andrea John-Smith permalink
    September 4, 2010 12:53 am

    Hey Lance –
    One other reason? Fundraising is misunderstood by nonprofit Boards and executive staff as purely “transactional,” i.e. “Fundraising=getting the gift this fiscal year. Hence marketing (the communications strategy of the organization) and fundraising get siloed. Especially in larger organizations with sufficient resources to have both a marketing and a fundraising department, one or the other is put in the role of unwanted step-child role; So we fight for mom or dad’s attention and work at cross-purposes. Fundraising, in this scenario, is often the step child.

    Why does mom or dad love marketing best? Perhaps because as a fundraiser, the context for everything we do, all our strategic persuasion, is powering a social mission. We are true believers. Conversely, marketers try not to lead with all that hopey/changy stuff. It kind of scares people.

    But a great fundraiser knows how to get above the nonprofit blah blah blah and talk about stories, and people and real change. And that’s why marketing and fundraising need to be close siblings and get mom and dad to put their missions out there in the world with everything they have.

    Hoping this was sufficiently provocative to get a little back and forth going.

    Andrea John-Smith
    Andrea John-Smith Consulting

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