Marketing and Earned Income Revenue for Nonprofits

Q1. Describe the reasons why earned income is so important for the survival of today\\'s nonprofits. Give examples of opportunities that exist for developing these new revenue streams.

Nonprofits today are under increasing pressure to do more with fewer resources in the form of time and money. Many are also finding that donations are less profitable than in the past, as potential donors are inundated with new requests, thanks to the ubiquity of social media. Earned income is one potential way to bridge the gap. Perhaps the classic example of a nonprofit which makes use of earned income revenue is that of the Girl Scouts, whose famous cookies have functioned as both a positive marketing campaign as well as an important support for the organization’s activities (Lapowsky 2017). Many people become aware of the good that the Scouts do precisely because of the Scouts’ unique product.

The use of social media, of course, has also facilitated sales of the cookies and other nonprofit products and services. Furthermore, nonprofits can now sell their items much more cheaply, using a website or an online portal like eBay. Advertising online is also less expensive, and nonprofits can use these channels to disseminate information about their cause, to encourage regular and loyal donation. With less of a need to invest in advertising, organizations can justify selling less expensive items as well and capitalize upon donors with fewer available funds to contribute.

Some organizations have also been able to merge their functions with earned income potential. For example, Habitat for Humanity can train people in carpentry skills or a soup kitchen can teach people to cook. Some people are willing to patronize nonprofits because they feel good about doing so and supporting a charity but nonprofits can, by offering services at a lower cost, also fulfill important community needs in the form of education and other services.

Q2. Write a concise description of what a marketing plan is and what it is designed to do. Then give examples of how a valid marketing plan can help a nonprofit generate income.

If a nonprofit is selling a good or service, it must have a marketing plan. Even if its goal is not to be profitable, the plan must have a target consumer and a viable way to reach that consumer within specifically-defined marketing channels. It should also have viable strategies to retain customers. Customers may be segmented, and ideally a good marketing plan will identify several complementary targets. Above all, “Having a strong unique selling proposition (USP) is of critical importance as it distinguishes your company from competitors” (Lavinsky, 2013, p.1). This is also true of a nonprofit. For some products, the uniqueness may be tied to the product itself, such as, for example, the unique taste of Girl Scout cookies. For other organizations, the uniqueness may be the advertised feel-good factor of acquiring a product that also does appreciable good for others, thanks to the revenue that is being generated.

But ideally, the product should be good as well as merely be a way to raise revenue. Girl Scout cookies, after all, sell far better than cheap t-shirts with the logo of the organization printed upon them; a more marketable “sell” would be a shirt that is both attractive as well as revenue-generating for the nonprofit. The pricing and promotional strategy of the product should also be well-researched and feasible, given what is being sold. Distribution and marketing methods and costs must be factored in, to ensure that that the process of marketing of the product is cost-effective enough to justify the time and money generated by producing the item. In today’s social media-driven climate, having a component of the plan specifically devoted to social media-specific marketing, such as search engine optimization, paid online advertising, and social media customer interactions is often necessary (Lavinsky 2013). This may also assist the nonprofit in generating interest in its cause online, as well as selling goods and services.



References
Lapowsky, I. (2017). The social entrepreneurship spectrum: Nonprofits with earned income.
INC. Retrieved from: https://www.inc.com/magazine/20110501/the-social- entrepreneurship-spectrum-nonprofits-with-earned-income.html
Lavinsky, D. (2013). Marketing plan template: Exactly what to include. Forbes. Retrieved from:
https://www.forbes.com/sites/davelavinsky/2013/09/30/marketing-plan-template-exactly- what-to-include/#4e19b98e3503