1.5 Nonprofit Consumer Behavior

Introduction to Nonprofit Consumer Behavior

While for-profit enterprises focus on either B2B or B2C consumers for their revenue, nonprofit organizations (NPOs) have much more complex customer dynamics. And yes, nonprofits do have consumers, too. When donors and charities exchange value in the form of monetary contributions, these donors can then be called consumers. The economic transaction between these consumers and charities is highly important since NPOs cannot survive by only serving the consumers who benefit from their mission. In order to execute their mission, NPOs must also recruit another consumer base: volunteers. NPOs compete, just like for-profits, for the attention of all of these consumer types. And to garner these consumers’ attention, we, as marketers, must understand nonprofit consumer behavior as well. Let’s briefly explore each of these consumer types.

Clients and Beneficiaries

NPOs must still strive to counter this focus shift to donors. Without understanding beneficiaries’ behavior, NPOs will not be able to fulfill their mission. In this customer segment of beneficiaries, we will identify them only as the individuals directly benefiting from the NPOs’ services. Just like in a for-profit setting, NPO beneficiaries go through the same process of selecting, using, and disposing of the NPO’s products and services. To better understand this consumer behavior process, NPOs can involve their beneficiaries’ direct feedback in the before, during, and after stages of developing their programs. For example, arts organizations can assess how their audience members select a show to attend and how they experience a show. Through understanding consumer behavior, NPOs can learn to better allocate their resources and create interventions to fulfill unmet needs.

Donors and Members

NPO marketers must integrate consumer behavior in their donor strategies in order to help their organization thrive. NPO directors and boards typically treat the donor customer segment as their primary customer. Instead, NPO directors and boards must understand and communicate how their beneficiaries use their services before they can convert donors to believing in their cause. During this donor conversion process, NPOs must realize that their donors set both the price and the service value. NPOs can only spend as much on their beneficiaries as the funds the donors provide and the value they place on the cause. For example, donors may put more value on a museum exhibit they can directly experience than on a food bank if they have never experienced hunger. These donors can range from individuals to corporate sponsors to government grant organizations. Once we as NPO marketers focus on consumer behavior instead of solely on fundraising techniques, we can better customize donor communications and understand donor expectations.

Volunteers

Did you know that the annual number of volunteer hours exceeds that of donor contributions in the United States? Without volunteers, NPOs would have no human capital to execute their missions. The volunteer customer segment is not just limited to unpaid individuals; it also extends to staff and board members. Just like donors, this volunteer customer segment must believe in our NPOs’ cause in order to generate optimal organizational impact. NPO marketers must understand what drives their human resources in order to both attract and retain quality talent in a competitive market.

Political and Organizational Entities

Let’s move to our last NPO customer segment, political and organizational entities. As a new NPO marketer, you will discover that your NPO’s mission and impact is influenced and shaped by politicians, corporations, media, and fellow nonprofits. If your NPO receives public funding or governmental contracts, you must understand the consumer behavioral process of both attracting lawmakers to your mission and shaping the public perception of policy issues. In addition to identifying local, state, and federal lawmaker voices, you must also understand and target associations and networks that lobby on your NPO’s issues. Both lawmakers and the public may look at your NPO more favorably if you form strategic alliances with other NPOs and corporations. However, alliances cannot be created without understanding what types of missions these potential collaborators support. For example, this final customer segment is perhaps the most complex one to master due to changing political climates and differing constituent needs within communities.