Develop a Powerful Nonprofit Marketing & Communications Budget

Develop a Powerful Nonprofit Marketing & Communications Budget

Author: Harris Eisenberg

Today we will try to answer the age old question: What portion of a nonprofit’s budget should be spent on marketing and communications? Let’s be straight from the start - you need to have a comprehensive and realistic budget. This is the most critical component of your plan, consider this a map to reach your goals.

In the for-profit world the standard for a marketing budget is 10-20% of projected gross revenue. However, things aren’t so clear in the nonprofit world where there is a dual bottom line of people and dollars. In this case you should take a percentage approach OR a flat dollar approach.

What’s most important is that you establish a budget prior to the start of each fiscal year, and track costs and outcomes, quantifiable outcomes especially, through the year. This enables you to analyze cost vs. benefit.

The Percentage Approach
This approach is tracks expenditures directly to an organizations growth or decline in budget and membership throughout the year. The main advantage of a budget based on your organizational finances is that it is organic - spending grows with your organization. Please note, organizations must oftem make exceptions for special needs (launch of a new program, introducing new leadership, etc.).

The average allocation is from 9% to 12% of your annual organizational budget (start with 10% as a rule of thumb). And note: advocacy organizations need to allocate more of their budgets to communications, since much of their advocacy work is communications or outreach based.

Here’s a simple example of a budget shaped by the percentage approach:

2% advertising and promotion media (be sure to include postage)
4% production and printing (newsletters, brochures)
2% special events
3% salaries, consultants and freelancers.

The Dollar Approach
Many organizations prefer a flat dollar approach and find it to be easier (and safer) than the percentage approach since your total budget has to cover utilities, rent, taxes, health insurance, etc.

To define the dollar amount for the year, start out with calculations based on last year’s costs and then revise it to reflect new programs or other events on the horizon. Contact colleagues in the field and prospective vendors to accurately gauge costs and get your projections as accurate as possible. Either way, this will help you produce a baseline budget.

What Budgeting Does for You
You will find that a formal budget is a great tool. Your budget (and plan) will help you distinguish between needs and wants. You’ll see how much you have to spend to reach your goals and, via tracking results, understand what programs are working to reach those goals. For example, based on your budget, you may decide to promote your advocacy campaigns via direct mail and email, media relations, and paid advertising in order to match fundraising and actionable timeframes or, you may decide to hold off on enhancing your already strong membership campaign with the launch of a members-only
web site.

In the end, results matter, plan and track to make sure you succeed.