brandchannel.com | Brand Value | Non Profit Organizations

Corporate, or for-profit, brand valuation identifies the profits generated by a brand. This figure can then be used to achieve a wide range of business goals including investor relations, strategic decision-making, portfolio tracking and management, M&A and JV negotiations, and royalty rate frameworks.

Not-for-profit brands, on the other hand, do not have an identifiable profit stream, although they do generate money for their cause. Therefore a more relevant methodology would be in establishing the value that the brand creates for the cause which it supports.

Jeffrey Parkhurst, managing director of brand valuation at Interbrand, acknowledges that nonprofits are not necessarily visible when it comes to thinking about brands with value. "The marketplace doesn't appear to think of not-for-profits as brands with significant brand value," he says. But, he goes on to speculate that some of the larger organizations would actually quantify over a billion dollars if one were to figure out their brand's value.

Why would a nonprofit go through the trouble of valuing its brand? Establishing the value of a nonprofit brand can open the door to co-branding, licensing, and partnering opportunities. Additionally, it allows one to determine reasonable spend on marketing and offers a point from which to explain the power of the brand.

Interbrand's brand valuation for nonprofits considers factors such as the public's level of trust that the donation will be used effectively, the public's perception of the organization's financial stability, the public's personal experience with the cause, the organization's level of contact with the donor, and the ease of transaction for the donor.

The idea of valuing a nonprofit brand is still quite new to the charitable community. However, some organizations have started to establish a monetary figure for their brand with a view of helping them grow the value further.

Habitat for Humanity International's brand placed at nearly US$ 2 billion in 2001 (brand value by Interbrand). The organization, which brings together volunteers and resources to help build affordable housing, appeared to appreciate the exercise of valuation as much for its internal effect as its external leveragability.

Dennis Bender, senior vice president of communications at Habitat for Humanity International, says that his strategy for determining the brand value was to "establish the brand in the context of corporate America and consumer products companies and then to show both leadership and membership what is at stake. [This will allow us] to win support for branding efforts because of the high perceived value of the brand we've developed." Establishing the monetary value of the brand was seen as a jumping-off point to engaging "the entire organization in growing it."

Other nonprofits are beginning to recognize the value of such an exercise although they may have not yet conducted a formal assessment of their own brand. The 56-year-old United Nation's children's fund UNICEF is starting to give voice to the idea of the value of its brand as part of a larger effort to harness its power.

UNICEF director of communications Marjorie Newman-Williams expressed support for the idea as a way to better manage the brand. "We have to be clear that our brand has a high value and not sell it cheap or devalue it through our behavior or activities that are just off the mark," she said.

But what are the factors that drive a nonprofit brand's value?

Parkhurst attributed Habitat for Humanity International's value to a number of factors. "The Habitat brand has a momentum that other once strong brands seem to have lost. For instance the United Way was big in the 70s and 80s and its material was fairly fresh but since then the role of the brand seems to have gone stagnant," he said, referring to the US network of community-based organizations, the United Way of America.

He went on to note, "The Habitat advantage is that you see tangible results right away in the houses being built, and you get to be part of the solution. Habitat delivers a local impact. It's not like giving your dollars away and who knows where they go. You can physically touch and see something at the local level."

The opportunity to experience the brand firsthand by building a house is also a powerfully persuasive factor of the brand. Bender says, "There is something unique about the Habitat brand. It may not be an attribute that you would see David Aaker or some other authority talking about, but our brand is infectious. We refer to people as acquiring Habitatis."

Similarly, Newman-Williams at UNICEF believes her organization's value is reflected in its mission, purpose, and results for children. "It's a strong brand. It has respect and value," she says.

One of the goals for UNICEF is to leverage that strong brand to educate the public. "When the public understands what it is we want to do, they will support it," says Newman-Williams. "That is our experience. We focus on making our case a compelling case, on engaging the public that cares in understanding what the issues are and how they can make a difference."

Nonprofits valuing their brand? The idea doesn't come easily to the charitable world.

Newman-Williams explains UNICEF's own initial aversion to the concept: "We have an internal barrier to overcome which is the perception that [branding] is for the crass commercial world. We live in the world of No Logo publication. So it's not our daily bread and there was the internal challenge to overcome prejudice."

Bender at Habitat agrees: "I think there is a squeamishness in the minds of nonprofit leadership that a charitable cause or a humanitarian effort could be translated into equity and dollars and cents."

Referring directly to her own organizational culture Newman-Williams at UNICEF says, "[People think] Why in the world would UNICEF be worried about the logo? Our first challenge is really to educate UNICEF people that it's not just the logo -- the logo is the expression. It's also the least important element in many ways of that expression. Those who have been engaged with us [in our recent rebranding efforts], I think, are now quite sold on that."

Habitat's Bender attributes the "newness" of branding in the nonprofit sector to the culture or psyche of nonprofit management. "There seems to be a clear distinction between business school approaches and the way in which charities and causes have evolved over the years. They don't necessarily match in many people's mind, and I think that's a mistake. There are not only synergies but there are common elements in the way that a private-sector organization evolves and grows and the way that a nonprofit or charity would evolve or grow."

Is investment in the brand a frivolous activity for nonprofits? What portion of funds should be allocated to branding?

Alvin Schechter, Chairman of Interbrand's Foundation, a program which extends branding expertise to charitable organizations, puts the figure into context by using the corporate world as a base. For instance, a for-profit brand like a perfume manufacturer devotes perhaps two percent of its money to mixing the concoction and 98 percent to the branding (e.g., packaging, brand protection, promotion, etc.).

However, Schechter says, "I would think that the serious nonprofit with a social mission would be more like the reverse of that - ideally 98 percent to the cause and two percent to the brand. It may be enough in one instance and not in another. But the goal is to make it very, very small -- as small as possible."

Ironically, public perception of marketing spend may be much greater than the actual numbers. This can perhaps explain the wariness organizations feel at the thought of studying their brand.

However, there are organic ways to harness the passion of members, volunteers and organizational staff to keep that number small for nonprofits.

Parkhurst notes that you can also grow brand value without advertising or marketing spend. To illustrate this, he chooses an example from the corporate world. "Starbucks has done a tremendous job of recognizing and growing the role of the brand. Their image is firmly ground into our minds through carefully cultivation of the Starbucks experience, for instance, the atmosphere of the café, the quality of the product, the consistency of the encounter, and the staff."

And what's the best part about having a strong brand? "A stronger brand can perhaps make it easier to attract funding and donations," says Parkhurst, "thereby making the fundraising process more efficient by harnessing the brand to work toward growing the support base."

The more nonprofits understand the value of their brand, the better control they can exercise over how and when that brand gets used and the better they can put their donations to use in furthering their cause.

[29-Jul-2002]

Robin D. Rusch lives and works in New York City.