"When markets are in decline, the only way for a Company or Brand to maintain sales is to steal market share from its competitors."
This applies to Charities as well. They too have to operate on business principles even though their purpose is altruistic. And charities have been badly affected by our economic doldrums.
Some organisations have seen their income fall by 20%. This is true from both the individual private donor and Government sources.
The general public has concerns on the impact of the stagnant economy on their future finances. The elderly now feel the impact of inflation on the returns on their savings and on their pensions. Many now feel the need to help children and grand-children onto the housing ladder. Some may also be fearful about the rising cost of care. Many feel "compassion fatigue ".
When they do give, a re-prioritisation of causes takes place. The repertoire of charities that used to be supported are reduced. Most health charities will continue to feature in the list, with the possible exception of mental health causes and aid charities. Third world charities may move off the burner and service aid organisations could find their support dwindling as returning troops and fewer headlines reinforce the view that this is a job for the Government.
And Government cuts will not just affect those charities who used to benefit from their largesse. These organisations will seek to make up their losses from private donors and their problems have already been listed.
Advertising investment is now even more important. In 2012, £371 million was spent in the UK promoting charities. Two-thirds of this sum was defensively spent on direct mail with the emphasis on appeals to existing supporters.
According to the Charities Aid Foundation, the causes that continue to attract donors, other than disaster relief, do so because they have a good reputation, are believed to be likely to have an impact in this area and enjoy high levels of positive awareness.
The lessons are: Think clearly about your objectives and distinguish between business and communication objectives. Understand how best to integrate the need for building positive awareness and attracting regular donors. Invest in good creative work. Drayton Bird quotes Sr Silva, the current President of Brazil: "The pocket is the most sensitive part of the human body, so we must touch the heart and the mind first."
Macmillan nurses manage their advertising investment better than any other charity. Other institutions could learn from them.
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