Friday, October 1, 2010

"How much should you spend" Follow-up

My last Blog on budgeting for your Non-Profit Marketing budget has provoked a great deal of response. There’s a lot of debate about how much is too much and how much is too little. I thought I’d keep the fire at our feet burning by asking two experts what they thought.

Alain
Alain Thys has spent 20 years of experience in Europe as an international strategist, retailer and venture capitalist. Today, he heads up Futurelab in Belgium, a strategic marketing agency.

Alain says the place to start is thinking about what “marketing” really is. If it means advertising, then he says spend as little as possible. The exception would be obtaining “free” or earned ads from media outlets.

“If you count marketing as ‘growing fundraising by building a strong relationship with funders and building word of mouth’, I would say you should spend ‘every penny you can spare’ and I mean that,” he says.

“If asked for a fixed percentage, I would say anything between 6-10% sounds fair as a rule of thumb.”

Alain notes that for larger non-profits it is possible to build models to estimate the impact of additional marketing investments. For smaller Non-Profits, he advises keeping track of two things.
  • Building a personalized relationship with your donors. “ You’d be amazed how much extra you can get out of people already giving you money,” he says. 
  • 
  • Activating your promoters in the community of donors. “People are proud to be contributing to your cause, so give them stories and angles to actually talk about this and bring in others.”
Jonathon Grapsas is Regional Director North America for Pareto Fundraising, an international company that has worked with charities like Sick Kids Hospital Foundation and the Canadian Red Cross.


Jonathon

Jonathon says most Non-Profits don’t give marketing its due. “Usually because of an unnecessary fear about the need to keep costs low. In my experience there is typically a direct correlation between those who spend the most and those who generate the most net income. More net income means more benefactors helped,” he says.

He says Non-Profits must look beyond a simple percentage for their marketing budget. The budget question has no simple answer. It depends on where you want to go.

“Investment should be determined by growth objectives (particularly, how quickly they want to grow), and how comfortable the organization is with various levels of risk.”

What’s your opinion? Send in your comments below.

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