07/05/2012 07:01 pm ET | Updated Sep 04, 2012

The Imperfect Storm: Nonprofits Need to Ride for Their Brand (Series Post 4)

In our initial blog post, we identified five key shifts affecting the environment for nonprofits that have co-mingled with the economy to create the potential for continued rough times. The last post covered Shift #2: Define by Results. In this post, we'll explore the importance of nonprofit branding.

Shift #3: Nonprofits need to ride for their brand.

Another major change in this imperfect storm is from the many to the one. Although many foundations and other funds have emphasized the importance of groups working together in partnerships, networks, and collaborative ventures, the emerging philanthropic focus is on which groups deliver the best results. The best get the money, the investment in their programs to improve human lives and conditions. We see foundations and individual donors alike shifting from sprinkling support among many groups to figuring out which ones are achieving the greatest impact. Then, funders are choosing to support these specific organizations in a bigger way.

This sea change is about moving from blending in to standing out.

The nonprofit sector is filled with people who have good hearts, who believe in service and sacrifice. There is a shared belief in the importance of the work, whatever form the work takes. It is about doing good. Given this shared belief, it is painful for some to accept that nonprofits must benchmark themselves against their peers. They must understand the quality and caliber of their work in the context of the results that other organizations produce. This ability to differentiate is an essential part of fundraising, and even when organizations are not competitive in what they provide, they are always comparative, like it or not.

The need to show a distinct identity and story is all about the brand, something that we are delighted to see emerge as a topic of serious conversation (although the investment in brand still seems to lag). The concept of branding is often misunderstood, seeming fuzzy and intangible. In summary, brands exist to define and protect what's unique about an organization, product or service. A brand is not a logo, nor is it a carefully crafted mission or vision statement. Nonprofits universally spend too much time worrying about the words in their statements when they should be thinking about the promise they are making to the public, to their donors. That promise is the brand -- a promise that provides a framework or discipline for how the organization behaves and communicates. The value of the brand is what consumers think it is, not what our wordsmithed mission and vision statements proclaim.

Which nonprofits are differentiating themselves in your mind (and your wallet) through effective branding? In our next post, we'll introduce Shift #4: Nonprofits need to use data to both improve their stories and to tell them.