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Actual for You - How to Design an Effective Marketing and Communications Budget for Your Nonprofit Organization
If you’re an entrepreneur, you’ve undoubtedly encountered obstacles in your self-made business. Obstacles are commonly considered a nuisance, but did you know they are also an asset to your business?While obstacles do indeed emanate unavoidable frustration, they also force us to evaluate what works and what doesn’t. We are challenged to determine what doesn’t work, and turn it around to produce more effective strategies to better ensure our business’ success. Building a business requires a lot of trial and error, one of the key elements in generating a successful business.As entrepreneurs, we are faced with decisions each and every day that dictates whether our business will succeed or fail.
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field co
Special Lubrication is applied between two moving surfaces to reduce the friction and wear between them. The purpose of these special lubricants is to replace dry friction with either thin-film or fluid-film friction, depending on the load, speed, or intermittent action of the moving parts. Thin-film lubrication, in which there is some contact between the moving parts, usually is specified where heavy loads are a factor. In fluid, or thick-film, lubrication a pressure film is formed between moving surfaces and keeps them completely apart. This type of lubrication cannot easily be maintained in high-speed machinery and therefore is used where reciprocating or oscillating conditions are moderate. Efficient o
But, it's always a challenge to determine your nonprofit marketing and communications budget, and to justify it to the powers that be. On popular approach is to allocate a certain percentage of the organization's budget to marketing.
In the for-profit world, it's fairly standard to determine a marketing budget by allocating 10-20% of projected gross revenues to marketing and communications. However, things aren't so black and white in the nonprofit world with our dual bottom line of people and dollars. You can take the percentage approach OR the flat dollar approach.
What's most important is that you establish a detailed marketing and communications budget prior to the start of each fiscal year, and track costs (by strategy and program or project) and results AS YOU GO so that you can analyze cost vs. benefit. The budget should be integrated into your annual marketing and communications plan, with a dollar cost allotted to each strategy (direct mail, email, paid advertising, media relations, etc.) and program or project, each of which should be broken out by its various components (consulting, evaluation, printing, postage, etc.).
Each organization's plan (and budget) will cover a unique set of components. Don't forget to budget for the tasks - such as researching your audiences and evaluating outcomes - that give you the information to make your selected strategies as successful as possible.
The Percentage Approach
This approach is favored by those who believe that marketing and communications expenditures should directly reflect a nonprofit's evolution and the size of its budget. Personally, this is the approach I prefer. The advantage of developing a budget based on your organizational finances is that it's organic. Communications spending grows as does your organization. Of course exceptions are made for special needs such as the launch of a new program, introducing new leadership, or tackling an urgent advocacy campaign.
The average allocation is from 9-12% of your annual organizational budget (start with 10%). Advocacy organizations tend to allocate a higher percentage (12% or higher) of their organizational budgets to communications, since much of their advocacy work is communications based.
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field con
Having just come back from what was otherwise a delightful trip abroad, I started stewing about the lousy return flight I took.Why was this experience the absolute worst part of the trip, surpassing the bad plumbing and other inconveniences that I suffered?That flight is emblematic of the five reasons flying sucks:(1) Flying wastes time. Having to check in hours before a flight is unnecessary. When you calculate this lost time, along with what it takes to drive to an airport, park the car, and catch a shuttle, it makes driving to your destination, if it is within 300-400 miles, seem more convenient.(2) The airline made me wait 5 hours between connecting flights, although TWO ear
What's most important is that you establish a detailed marketing and communications budget prior to the start of each fiscal year, and track costs (by strategy and program or project) and results AS YOU GO so that you can analyze cost vs. benefit. The budget should be integrated into your annual marketing and communications plan, with a dollar cost allotted to each strategy (direct mail, email, paid advertising, media relations, etc.) and program or project, each of which should be broken out by its various components (consulting, evaluation, printing, postage, etc.).
Each organization's plan (and budget) will cover a unique set of components. Don't forget to budget for the tasks - such as researching your audiences and evaluating outcomes - that give you the information to make your selected strategies as successful as possible.
The Percentage Approach
This approach is favored by those who believe that marketing and communications expenditures should directly reflect a nonprofit's evolution and the size of its budget. Personally, this is the approach I prefer. The advantage of developing a budget based on your organizational finances is that it's organic. Communications spending grows as does your organization. Of course exceptions are made for special needs such as the launch of a new program, introducing new leadership, or tackling an urgent advocacy campaign.
The average allocation is from 9-12% of your annual organizational budget (start with 10%). Advocacy organizations tend to allocate a higher percentage (12% or higher) of their organizational budgets to communications, since much of their advocacy work is communications based.
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field co
Secret Shoppers are people hired by companies to evaluate the quality of work and customer service in a particular industry. A secret shopper works freelance and anonymously, posing as a normal everyday shopper, and submit a report to the management at the end of the day. Secret Shoppers are usually employed by large retail, department stores, restaurants, manufacturers and theaters etc.The most important key to a successful business setup is customer satisfaction. The profit of a company that produces consumer goods significantly depends upon the type and quality of service it provides to customers. Studies have confirmed that only 5% of unsatisfied customers register complaints, while 95% simply s
Each organization's plan (and budget) will cover a unique set of components. Don't forget to budget for the tasks - such as researching your audiences and evaluating outcomes - that give you the information to make your selected strategies as successful as possible.
The Percentage Approach
This approach is favored by those who believe that marketing and communications expenditures should directly reflect a nonprofit's evolution and the size of its budget. Personally, this is the approach I prefer. The advantage of developing a budget based on your organizational finances is that it's organic. Communications spending grows as does your organization. Of course exceptions are made for special needs such as the launch of a new program, introducing new leadership, or tackling an urgent advocacy campaign.
The average allocation is from 9-12% of your annual organizational budget (start with 10%). Advocacy organizations tend to allocate a higher percentage (12% or higher) of their organizational budgets to communications, since much of their advocacy work is communications based.
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field co
Corporate Espionage is so great in America that competitors will go to lengths to find out what your company has that makes it so much better than everyone else’s. Often they will even go so far as to set up a dummy corporation or LLC and actually go thru the sales process to buy a franchise, sometimes even go thru the purchase process, just to get all the information they need to compete with you, using your proprietary methods.This is why I came up with a clause in our franchise agreements which helped us in knowing who we are dealing with up front and what their interests really are. Below is one of the clauses we use;7.16 Other PartiesIf Franchisee is a partnership, joint venture,
The average allocation is from 9-12% of your annual organizational budget (start with 10%). Advocacy organizations tend to allocate a higher percentage (12% or higher) of their organizational budgets to communications, since much of their advocacy work is communications based.
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field co
You have no doubt heard the saying that the customer is always right. When you are a customer you happy with this position, when you are the owner of a small business, sometimes you see this is like opening Pandora’s box. But for the sake of argument, let me add a caveat to that saying: “The customer is always right, even when they’re wrong and you know it.” After 27 years in the car wash and cleaning industry, I have heard it all. Here are some ways carwashes can mitigate upset customers.Handling ComplaintsWhen you handle a complaint, you need to treat the customer as though they are in the right for expressing their opinion, and since you are taking their money, they have every right to com
Here's a highly-simplified example of a budget shaped by the percentage approach:
2% Purchasing all advertising and promotion media, including newspaper, radio, TV, and direct mail (postage).
+
4% Producing (design, artwork) and printing all communications. This includes newsletters, brochures, web sites, press kits, etc.
+
1.5% Producing special events.
+
3.5% Salaries, consultants and freelancers.
= 11% Total percentage of the organizational budget going to marketing and communications.
The Dollar Approach
Others in the field consider a flat dollar approach to be more relevant (and safer) than the percentage approach since your total budget has to cover utilities, rent, taxes, health insurance, etc.
Defining the dollar figure is challenging the first time round but becomes much easier once you have records of several years' marketing expenditures to work from. Start out with a quick-and-dirty calculation based on last year's costs and revise it to reflect special campaigns, inflation, etc. Or, if this is your first year out, estimate the costs of what you think you'll be doing based on what you know today. Contact colleagues in the field and prospective vendors to get your projections as accurate as possible. Either way, you'll end up with a baseline budget.
Frankly, I've heard a lot about this method as a viable alternative to the percentage approach, but have never seen it put into practice.
What Budgeting Does for You
Whichever approach you take, you'll find that a formal budget is a great aid in decision making. To begin with, your marketing communications budget (and plan) will help you distinguish between needs and wants. You'll see clearly how much you have to spend to reach your goals and, via tracking results, will gain a sense of what strategies work best to achieve which goals. For example, based on your budget framework, you may decide to promote your advocacy campaigns via direct mail and email, media relations, and paid advertising in order to match legislative timeframes. However, you may decide to hold off on enhancing your already strong membership campaign with the launch of a members-only web site.
So start your budget process today, even if you're in the middle of your fiscal year. Make sure that you track costs by category and maintain a spreadsheet of actual vs. projected expenses. By next year, you'll have an accurate map of expenditures that will serve as a great foundation for next year's planning process and a sure means of ensuring you make the most of your marketing and communications budget.
Do keep in mind that your budget will have to be adjusted each year to reflect increasing costs and changes in your organization. For example, launching a new program requires an increased marketing budget for the first year or two so you'll need more dollars or do less on other fronts.
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