The New Non-Profit

Building a strong relationship with not-for-profits may be just as important as meeting the ordering needs for this evolving group.
April 8, 2008

By Dawn McMullan

Clear your mind of everything you’ve known about working with not-for-profit agencies. Well, almost everything. Now, fill that blank slate with these two basic premises:

1. Non-profits are a diverse group, with some focusing on a local 5K run to help abused animals to others such as urban hospitals with a multi-million-dollar budget.
2. Non-profits involve relationships as much or more than they involve signing on the dotted line.
   
Traditional Not-For-Profits
Lawrence, Kan.-based Absorbent, Ink. has more than 5,000 items on its Web site, so the requests from non-profits run the gamut. Last year, one organization ordered plastic steins for a benefit concert, while a local chapter of Mothers Against Drunk Drivers ordered auto kits. Bruce Jolesch, president of Dallas-based Schroepfer Wessels Jolesch, finds T-shirts, caps, fleece and jackets popular non-profit items.

An item’s usefulness — to both the non-profit and the end consumer — is key in this market. “Something to consider in this industry is the feel-good factor,” says Kristin Eldridge, vice president of Absorbent, Ink. “Everybody wants a custom item that’s useful, but the recipient also will feel good about using it if it’s used more often.”

Getting beyond specific items a non-profit orders and looking at the big picture, however, is the best way to keep a non-profit’s business, according to Darrell Marriott, president of Purple Elephant Promotions in Salt Lake City. He suggests promotional products companies think through how they will work with non-profits before the process begins. “You have to realize what you’re gaining or not gaining in working with not-for-profits,” he says.

Marriott started hearing something different from non-profits several years ago. While they used to ask, “What kind of discount can you give me?” the question is now, “What kind of partnering opportunities are you interested in?”

Marriott worked with a non-profit that was organizing a race to benefit child abuse prevention that had $500 top-level sponsors. He became a sponsor — garnering all sorts of publicity at the race — and the non-profit ordered $16,000 in promotional products (almost $15,000 more than planned). If Marriott had offered the standard 10% discount, he would’ve paid $1,600 for the same result.

Marriott outlines three levels of involvement with non-profits:
    1. Standard: Give a percentage off their order or a gift to a charity auction.
    2. Mid-Level (often more creative): Provide spec samples and offer information about co-op marketing programs.
    3. In-Depth: Be a major sponsor or participate on a charity’s board of directors.
“Look for a win-win-win,” he says. “You’re looking for a win for the distributor, the non-profit and the clientele the non-profit services.”

Jolesch echoes Marriott’s push toward relationships being just as or more important than the business deal. “Sometimes we work with a non-profit not because we want to sell to that non-profit, but because we want to use that relationship to meet other contacts, other board members,” Jolesch says. “And then there are times when you do want to work with the non-profit directly. I may not be able to do business with the American Heart Association, for example, but could be on their board to meet other people that could become clients.”



Non-Traditional Not-For-Profits
What you may not realize is most health care organizations, schools and government institutions also are non-profits — non-profits that often have stable funding. John Hood is president of Sweet Springs, Mo.-based MCH, which specializes in business-to-institution marketing. Hood remembers reading a story about a virus that infected the Florida citrus crop, possibly wiping out $1.3 billion in citrus. He later read about one hospital in Kansas City, Kan., with revenues of  $1.6 billion. Surprisingly, one hospital in Kansas City brings in more than the entire Florida citrus crop. “A lot of people don’t get that,” Hood says.

These entities have a feel somewhere in between a traditional non-profit and a corporation. One unique feature is who does the ordering. Many people who could become your customers are at the bottom wrung of the organizational chart, like doctors and teachers. These people often have a lot of autonomy — and their own budgets.

“You have a lot of first-, second- third-grade teachers, buying stickers and little things to give students to keep them motivated,” Hood says. “When you add up all of the elementary school teachers doing that, there are close to a million of them.”

These industries are more insulated from the economy than traditional non-profits, where giving is more directly reactive to the economy. If a lackluster economy lasted for years, they might feel the effect down the road; but Hood describes them, for the most part, as “islands of stability in a recessionary environment.”

Hood passes on this marketing tip: Non-profits must spend their budget by the end of their fiscal (not calendar) year or lose it. And not spending it means whoever gave them the money may not be so inclined to give them as much the next year.

“Promotional products are great things to buy at the end of the fiscal year,” Hood says. “The tricky part is fiscal years are all over the place. [Aim for] a mail-out two to three months before [fiscal year end]. [This spending philosophy] does not exist in the business world, where if you save money, the business is more profitable.”

Another marketing tip: The relationship side of this sector is important, whether the non-profit you’re working with is institutional or more traditional. “These non-profits are not after profit,” Hood says. “They’re not after sales. It has much more to do with motivation and recognition and furthering the purpose of the institution. Hospitals are interested in preventing illnesses. That’s what their mission is, what their doctors are concerned about.”
   
Dawn McMullan is an award-winning freelance writer based in Dallas. She has written for national, regional and local magazines, as well as provided commentary for Dallas newspapers and radio stations. She can be reached at dmcmullan@sbcglobal.net.

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