Among the first questions the managers of many nonprofit organizations ask when considering marketing is, “Where is the money to pay for this going to come from?”
After all, overhead, the percentage of revenue spent on administration and fundraising, has been a core metric in measuring nonprofit efficiency for generations. Marketing has long been considered a drain on resources, money that’s not going into supporting “the mission”.
Donors, both individual and institutional, have used overhead as a shorthand way to assess how well potential recipients are being managed. Low overhead, meaning little or no spending on marketing and administration, was seen as admirable stewardship of donations. That view is changing though. Current thinking is more in line with for-profit business models, where marketing and administration are seen as essential investments in a company’s future.
Investing in fundraising efforts increase a nonprofit’s revenue and, therefore, its capacity to serve its constituents, just as the same investment in a for-profit business increase its ability to serve its customers. Funds allocated to staff support and volunteer recruitment have the same impact. By increasing the number and efficiency of people serving an organization’s mission, its ability to serve a larger community with better outcomes grows.
Instead of being seen as necessary evils, administration and marketing are gaining ground as the keys to nonprofit sustainability.