Academic journal article Academy of Marketing Studies Journal

Expanding the Use of Focus Groups in the Nonprofit Sector

Academic journal article Academy of Marketing Studies Journal

Expanding the Use of Focus Groups in the Nonprofit Sector

Article excerpt


The Internal Revenue Code identifies 24 different categories of organizations that can legally be classified as nonprofits and receive tax-exempt status. These include charitable, religious, scientific, and educational institutions, as well as social welfare groups, business leagues, and social clubs. In the current competitive climate for funding, nonprofit organizations should be as concerned as for-profit organizations about stakeholder satisfaction. This satisfaction can be directly related to the branding of a nonprofit organization (Campbell, 1996). It is only recently that the concept of branding has been associated with nonprofit organizations. The main reason that these organizations are reticent to create and develop their brand image has been the cost of these activities. There also exist other issues that complicate nonprofit marketing strategies. First, nonprofits have multiple, and often non-financial objectives. Rather than the bottom line being financially driven, social profit is the goal. Social profit is best understood as a form of education, health, safety, cultural enrichment or some other benefit to individuals and the community (Gallagher & Weinberg, 1991).

Marketing research procedures require that an organization have the resources to dedicate to marketing the organization. Most small nonprofit organizations must rely solely on volunteers to do whatever marketing gets done. The result is that nonprofit marketing for all but very large, established organizations such as the Cleveland Clinic, the Chicago Lyric Opera, or The Girl Scouts of America is done without benefit of a formal strategy, an in-depth plan, or even evaluation criteria.

The competitive environment of nonprofit organizations also complicates marketing strategies because, in many cases, competitors for funding can also serve as collaborators striving for the same social goals. For example, Share Our Strength, America's Second Harvest, Bread for the World and local food banks all work together to provide food security for hungry people. However, they must also compete for donor dollars, volunteer time and government grants to ensure that they remain solvent and fulfill their missions. This type of cooperative competition is one of the reasons nonprofit organizations have unique marketing needs that require unique marketing strategies. While consumers are happy to support two competing hospitals sharing one hospice program or even one specialized MRI, these same consumers would be outraged if they found out that the only two hardware chains in a community worked together. What, in one case, is considered smart utilization of resources, in the other case is cause for an anti-trust suit.

Finally, a further complication is that nonprofit organizations have multiple stakeholders; including customers who are may not be the ones who pay for the products or services provided (Kinnell & MacDougall, 1997; Drucker, 1990). These stakeholders include donors, volunteers, board members, employees, government agencies, private funding institutions, communities, the media, and, of course, customers or those who are being served. Even among donors there may be different demographic segments. For example, the American Heart Association segments its donors into 41 different categories based on age and income (Drucker, 1990). It is the development of relationships with various stakeholders who play multiple roles that is the focus of this paper. Specifically, this paper will discuss using focus groups as a facilitating tool for the development and stewardship of stakeholder relationships. Focus groups have a dual purpose in nonprofit organizations. The first function is the traditional role of gathering data to understand its stakeholders wants and needs. The second function is as a communication vehicle for the organization.

Businesses have long used focus group research as a tool to understand their customers and to better satisfy the wants and needs of those customers (Bruneau & Campbell, 2000; Campbell & Bruneau, 1998). …

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