10 million! That is the estimated number of non-governmental organisations (NGOs) worldwide (source: The Global Journal). Imagine: as a country, they would form the fifth largest economy in the world. In Europe, 147,000 registered public-benefit foundations deliver combined annual expenditures of nearly 60 billion euro.
The NGO sector is booming. It is more diverse than ever and has become a key partner of the public and the private sectors. International organisations, development aid agencies and private donors rely more and more on NGOs to implement substantial parts of their programmes – if not all – to fulfill sustainable goals of public health, nutrition, security, education, culture and more. There is a downside to this: NGOs have to compete for resources. Consequently, there is an increasing need for NGOs to focus attention on reputation management as a strategic process for market differentiation. As such, their challenge is very similar to that of their for-profit counterparts. This lies in the evident business value of a strong reputation.
- Firstly, reputation directly impacts an NGO’s financial resources: in times when there is an increasing demand for proof of return-on-investment (ROI) of development programmes, NGOs have to compete for donors. There is a relationship between reputation and market value in the for-profit world. Alike there is one between reputation and fundraising capacity in the nonprofit world. An NGO with a compelling story builds and diversifies a portfolio of donors at lower costs and higher persuasion power just like a business can do when raising capital for an IPO.
- Secondly, reputation amplifies an NGO’s operational impact: most nonprofit organisations, in their capacity of agents of change, orchestrate work along a chain of multiple players and often across borders. Strong logistics and supply chain management play a critical role to deliver quality results, especially in the humanitarian context. The more an NGO is recognized and trusted for its competencies, the more easily, smoothly and cost-efficiently it operates. This also positions it as a privileged observer and advisor that can promote best practices and raise standards in both the public and private sectors.
- Thirdly, reputation determines an NGO’s power of influence: there is a consensus that a strong brand helps raise funds. Yet, it is far from being its sole value. This is particularly true and relevant for private foundations (family or corporate owned) which are self-funded and grant-making bodies. A strong brand increases a nonprofit organisation’s capacity to leverage its influence, shape the public debate and bring about the necessary strategic changes to tackle global issues. In other words, the brand equity of an NGO lies in its power to stiffen the spines of all players across the board and move the needle on sustainability for greater social impact. For instance, The Bill & Melinda Gates Foundation leverages its brand to give visibility to a specific cause, mobilize public support around it, and foster solid lasting partnerships. This is within the reach of many others at very different levels of donations. Money does not make it all. The brand image of the nonprofit organisation is tightly linked with the standards the for-profit corporation sets for itself as the reputation of the latter shines back inevitably on the former, either positively or negatively.
- Reputation is a tangible and unique asset for nonprofit organisations to differentiate themselves among their peers. A strong reputation is not a given, even for an NGO. It has to be built and nurtured.
- The reputation challenge is a trust-building exercise which delivers critical benefits: financial strength rooted in proven efficiency, indisputable legitimacy drawing on operational excellence, and leadership power driving impact at scale.
As for the “how” this can be achieved, E-reputation management is of utmost importance. In today’s highly connected world, there is no better way than setting off to conquer the web. Websites, blogs and forums, social media or online campaigns have become brand-building highways to raise the profile of a cause and make it viral.