How Much Should a Nonprofit Spend on Marketing?
5- 15%. That's the quick answer. But like the answer to most "how much should I....?" questions, the answer to how much a corporation should spend on marketing is, "it depends."
We have talked about four reasons nonprofits need marketing which can be quickly summarized by the idea that nonprofits, just like their commercial counterparts, are in a competition for their audience's attention and limited resources AND they (should) use the same techniques and strategies as for-profit companies to earn the attention of their audiences.
Nonprofits, even though they're not trying to turn a profit, are still in the business of survival. Survival means getting donations, and getting donations means turning awareness and interest in your organization's mission into action by your donors. Most commercial companies spend between 5 and 15% of their operating budget on marketing and we think this is a decent, if not very helpful, figure for planning purposes.
Why 5-15% Isn't Helpful for Nonprofit Marketing Budgets
This average window isn't very helpful because it hides a few things. Specifically, what if you're running a nonprofit that is steadily losing donations? If your donations are dwindling that means your operating budget is shrinking too. Should you stick with this 5 - 15% figure knowing that as your receipts shrink so too does your marketing budget? Without giving a firm answer, we would say focus on the types of communication that get the biggest bang for your buck:
Nonprofithub.org also suggests giving away free stuff. As much as everyone likes free stuff, we don't think it's the best use of your dwindling donation dollars in this hypothetical scenario.
Shrinking donations are a canary in the coalmine for your organization. Something about your mission is not resonating with your audiences when your donations begin to steadily decrease. Rather than ride the wave down, when you find yourself having to work with a shrinking operating budget take the opportunity to ask why is this happening?
Your Story Matters
When your donations are shrinking, there's a good chance that something about your storytelling has stopped resonating with your audiences. For instance, you may not be sharing your story in places that your audience can find you. Maybe your donor pool is younger and using a different social media channel than you normally target for outreach. You may have mis-messaged. If you're trying to get geriatric dogs adopted, you won't find them good homes if you're telling your story to families looking to save abandoned Australian cattle dog puppies.
Take a look at the Google Analytics on your website to see your audience pays attention to. We can help if you're having trouble deciding where to start.
Be Generous in Your Marketing Budget
Unlike commercial companies, nonprofits are corporations organized for the public good and their annual financial reports are publicly available. This may make you wonder...can you trust a nonprofit with a generous marketing budget to be a good steward of donated funds? It sounds glib, but we would argue that charities can't afford NOT to have a generous marketing budget.
A purpose driven organization is in the business of telling stories. Even if your budget is small, be generous to your organization and its mission. Prioritize your story and prioritize delivering your story in a way that grows a dedicated audience. You can survive a shrinking donor pool if those donors give more, and more often, to your organization. You can't survive losing donor dollars because your content is missing its mark.
If you need some help with nonprofit budgeting, Capterra has a really helpful post with
13 Free Nonprofit Budget Templates You Should Try. These templates can help you figure out how much you should spend on marketing, among other things, to realize your organization's vision.