The Tricky Business of Nonprofit Brands
Coca-Cola, move over. Many of the world's best-known brands belong to nonprofits, but the brand management issues these organizations face can be quite different. A conversation with professor John A. Quelch and collaborator Nathalie Laidler-Kylander.
Are brand management issues faced by a powerful for-profit company such as Toyota the same as those navigated by an international non-government organization (NGO) such as the Red Cross?
Yes and no. In their new book, The New Global Brands: Managing Non-Government Organizations in the 21st Century, authors John A. Quelch and Nathalie Laidler-Kylander see branding issues that are shared by many international entities, but also recognize that NGOs have missions and constituencies that add to the complexity of brand management.
They look at twelve in-depth case studies of NGOs including the International Red Cross, UNICEF, Médecins Sans Frontières, Oxfam, and Amnesty International. Topics include managing growth, performance assessment, mission and strategy development, and most of all, understanding, developing, and communicating the brand.
As the authors put it, "All of these organizations face a similar set of challenging questions as they enter the twenty-first century. How should they respond to the increasing number of complex emergencies? To what extent should they cooperate with national governments and the private sector if doing so will advance their missions? How should they balance operational activities and advocacy efforts? How can they better measure performance against their missions and improve accountability to stakeholders?"
The authors discuss their book in the following Q&A. Quelch is the Senior Associate Dean for International Development at Harvard Business School; Laidler-Kylander (HBS MBA '92) is a PhD candidate at the Fletcher School of Law and Diplomacy at Tufts University.
Manda Salls: Any organization—profit or nonprofit— faces challenges when it goes global. What are some of the unique challenges nonprofits face? Are there best practices that global nonprofits should adhere to when creating their international brand?
John Quelch and Nathalie Laidler-Kylander: Many of the same challenges and global brand management approaches apply equally to for-profit and nonprofit brands.
One of the additional challenges nonprofit brands face is that they must appeal to a broader array of stakeholders. Nonprofit brands have a dual objective: to enhance fundraising and to ensure the implementation of the organization's mission. In addition, nonprofit organizations tend to be more decentralized, with little formal hierarchy. This can mean that implementing activities that protect the brand or attempting to update or modify the brand often meets with resistance internally. In some cases, highly decentralized organizations such as Médecins Sans Frontièrs [also known as Doctors without Borders] depend on their brand to provide organization cohesion. The brand is the glue holding the components of the global organization together.
Q: Some NGO brands, such as the Red Cross, are recognized worldwide. When a humanitarian crisis such as the recent Asian tsunami strikes, donors know almost automatically to send money. How do brands establish this incredible level of trust?
A: Trust is essential for nonprofits. The purchasers or donors are not the ones receiving or benefiting from the nonprofit organization's services and programs. Since the purchasers cannot directly evaluate the quality of these services and programs, they rely on the reputation of the nonprofit and the belief they have that the organization is doing, and will continue to do, good work.
Edelman PR tracks consumer trust in global brands and has found that many global NGOs such as Amnesty International and the WWF score higher than major global corporations such as Microsoft or Coca-Cola, particularly in Europe. Many NGOs, by the very nature of the work they do and the dedication of their staff and volunteers, attract the respect and admiration of many individuals. Nonprofits are effective at creating emotional connections with consumers because of the very nature of their mission and objectives. People feel good about contributing to and participating in helping those in need. Nonprofits provide a channel for them to do so.
Q: Is there a downside to such widespread recognition?
A: The downside to the importance of trust for NGOs is that it only takes one or two mistakes to cast doubt on a nonprofit organization. It takes many years and a lot of hard work to reestablish the credibility of nonprofit organizations and rebuild consumer trust.
Nonprofits run the risk of not extracting the full financial value from partnerships and co-branding opportunities that they deserve.
Two examples come to mind, the American Red Cross's use of 9/11 funds and the United Way executive scandals. Both of these events eroded consumer trust in these organizations and had a direct impact on their ability to raise funds and implement their missions. In the case of the Red Cross, the negative impact extended to other Red Cross organizations located in Europe that registered a decline in donations even though they had been in no way implicated.
Q: You cite a study by Interbrand that found that Habitat for Humanity has the same brand value as Starbucks. How important is it for NGOs to know what their brand valuation is, and how should they use this information?
A: It is important for any organization, for-profit or nonprofit, to know the value of their brand so that they can allocate adequate resources to nurturing, building, and protecting it. For many nonprofit organizations and consumer goods companies, their brand is, along with their people, the most important asset they have. Tracking the value of that asset and understanding what activities increase or decrease asset value is key to managing it effectively. As traditional sources of funding erode for nonprofits, an increasing number are turning to the private sector for funding. Businesses are also increasingly searching for opportunities to form partnerships and co-branding programs with high-profile nonprofits. If nonprofits are unaware of the value of their brand, they run the risk of not extracting the full financial value from these partnerships and co-branding opportunities that they deserve.
Q: Do you have advice for aligning brand with mission? In particular, your case on Habitat for Humanity shows brand recognition is high, yet there seems to be some ambivalence about branding the organization with its Christian, Jesus-centered message. What can an NGO do when what resonates with potential donors or volunteers differs from what the organization's leaders believe?
A: Aligning the mission and brand is critical. However, as the needs in the world change, nonprofit activities and missions can and do evolve to meet these changing needs and challenges. When the mission and brand image (as perceived in the market) are no longer in synch, a re-branding process or revitalization may be needed.
It is important for nonprofits to clearly understand and target their donors and not attempt to be all things to all people. By aligning the current mission with their target donors, nonprofits can create a brand identity that both more accurately reflects the organization's activities and mission, and resonates with their target donors and or volunteers.
Q: Recent humanitarian crises—the Asian tsunami, conflicts in Afghanistan, and the war in Iraq—are high-profile opportunities for NGOs. Is this a time to capitalize on strengths, or just to pitch in and be seen? What pitfalls do these organizations face when the world is watching?
A: It is always good for NGOs to be seen working in the field, actively and effectively helping in the middle of a humanitarian crisis. In addition to the media coverage that results in increased donations, the NGO brand is strengthened and the needs of the individuals affected by the crisis are clarified.
In many humanitarian crises, however, there may be a lack of coordination between NGOs resulting in duplication and inefficiencies, which, if highlighted by the media, may backlash against the same NGOs. During the post-genocide period in Rwanda, many NGOs found that they were providing relief to the very perpetrators of the genocide now stationed in refugee camps and planning to return and continue the violence. This had a negative impact on the NGO community, and some NGOs chose to withdraw.
Another potential setback is that while a humanitarian crisis is newsworthy, the donations tend to flood in. As the media focus on another crisis, the donations tend to dry up even though, as has been noted in the case of the tsunami disaster, the long-term rehabilitation needs are vast and require a tremendous amount of funds.
Q: Many cases featured in The New Global Brands reveal the desire of leaders to move from relief and hands-on work to policy and advocacy roles. Why do you think we are seeing this trend?
A: The move towards advocacy is driven by two main themes, an increase in the importance of taking human rights into consideration generally, and a desire to address the root causes of many of the world's problems today. The past few decades have seen a shift in the development and relief industry to incorporate a rights-based approach to programs and services. In addition, the ability to solve hunger, for example, requires advocating for political change, access to markets, and the right to decent wages. Even strictly humanitarian organizations are now calling for changes in the underlying structures of the societies in which they operate.
This complicates things somewhat for nonprofit organizations since being an effective advocate requires different skills, and credibility implies the ability to remain financially independent of governments.
5. This section is based on an article by J. Stryker Meyer, "Bad News for the Red Cross," North County Times, April 28, 2002.
6. The number of National Societies was 179, 178 of which were members of the International Federation and one of which was awaiting admission at the next general assembly.
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