The ABCs of marketing and leadership for charities

As donations fall and expectations rise, charities need to become more business-like, improving their skills in marketing and leadership, says Professor Ian Bruce

Charity income which has been earned is now dominant, rather than income from donations. As little as 15 years ago donations provided charities with half their income and only just over a third was earned from contracting and individual purchases. The position is now reversed with the typical charity earning over half their income (55%) and voluntary income (donations, grants and legacies) providing just over a third (39%). This has revolutionised how all but the smallest of charities have to be managed.

The ABC of marketing for charities
Quite apart from needing to be financially more savvy, the business method which best guides the new business-like behaviour is marketing. As it is a customer-centred approach, it is particularly appropriate for organisations focusing on people who need help or skills. This is one of the conclusions I have drawn from personal experience of charity work and listening to over 150 charity leaders over 25 years of Charity Talks at City University London’s Cass Business School.

I learned my marketing at Unilever and honed my skills through relaunching the National Old People’s Welfare Council as Age Concern and later running Volunteering England and RNIB.

The heart of marketing is the customer, whose ‘needs and wishes’ have to be met. So who are the customers? For charities, social enterprises and community groups there are four main categories:

• beneficiaries (called by all sorts of names eg clients, members, patients, tenants etc),
• supporters (donors purchasers etc),
• stakeholders (people who have power and legitimacy such as staff and trustees) and
• regulators (such as the Charity Commission).

Charities are different from most businesses because often the people who pay for goods and services such as donors, and commissioners are different from people who consume them, such as older people or disabled people. When the needs and wishes of the payers and the consumers differ, the voluntary organisation has a challenge which marketing can help them solve, giving primacy to consumers while keeping payers satisfied.

The things which marketers deliver to customers tend to be goods, services or ideas or a mixture of all three.

A rehabilitation service for example is ‘selling’ to the rehabilitee the idea that they can be independent again, the service of training them up with the necessary skills, and the goods required such as a wheel chair or white cane.

These are the basics, but then marketing has a whole raft of strategic analytical tools such as segmentation, marketing research, other player analysis and positioning. In addition it has the ‘marketing mix’ or the ingredients to ‘bake’ a good product, such as methods of fixing the price, how to promote the activity, the best methods of distributing the product, the kinds of people you need to deliver quality, and the processes that best suit you and your customers (eg telephone banking for blind customers). I have written quite a bit about the detail.

Rising expectations and rights of beneficiaries
Twenty five years ago beneficiaries were ‘ever so grateful’. Increasingly they expect to be part of the solution and to receive quality help. ‘Nothing about us without us’. RNIB’s constitution requires that more than 50% of the trustees are blind and elected from constituencies of blind people. Mutual aid and co-production are terms which are used increasingly. Asset Based Community Development ABCD) and Appreciative Enquiry are philosophies and techniques which reject deliverer superiority and build on people’s strengths (or assets) rather than concentrating on weaknesses

Better leadership for the charity sector
Rising beneficiary and societal expectations requires better leadership with styles suitable for the sector.

Staff and volunteers in my experience do not respond well to command and control leadership. They are mostly well motivated and building on strengths fits the bill. Kouzes and Posner have been ‘leaders on leadership’, researching among tens of thousands of managers, asking what were the best qualities of the leaders who had got the best out of them.

Here are their conclusions: that good leaders are good at

• Inspiring a shared vision (through envisioning the future and enlisting others help)
• Challenging the process (through searching for opportunities and experimenting and taking risks)
• Modelling the way (through finding your voice and setting the example)
• Enabling others to act (through fostering collaboration and strengthening others)
• Encouraging the heart (through recognising contributions and celebrating your values and victories)

It is easy to criticise people who try and do good as ‘do-gooders’. I have worked in business, government and academia as well as extensively in charities at all levels. Charity leadership compares well, but we can improve. Above are some of the ways we can do this.