Guest blog: Do charities have life-cycles?

This week's guest blog examines how the well worn marketing metaphor of 'product life cycles' could apply to charities too- and why the sector should sit up and take notice.

Dr. Sarah-Louise Mitchell

The metaphor of biological growth within marketing is alive and kicking. Commonly represented as the ‘product life-cycle’ (PLC), development is charted from birth through growth to maturity and death. Invented over fifty years ago, it remains popular in marketing research and teaching.

However, given the seismic shift in the nonprofit landscape since then, the time has come to think again. We have seen an exponential growth in the number of new charities and increasing responsibility within society to support the most vulnerable. In particular, we have moved on from supply-push type thinking where we came up with a good idea and expected people to buy it. Now we talk about engagement with our different audiences, co-creating ideas, building brand communities. The environment we find ourselves in is more dynamic, more interactive and about building relationships rather than ‘telling’. But the life-cycle model hasn’t really moved on. Yes, there are brand versions and organisational versions of the model but they all still have the relationship with audiences very much as an afterthought.

That is why I believe the time is right to update the life-cycle idea to map the different stages charities go through when engaging their stakeholder audiences. In the ‘incubation stage’ there is very little interaction. Perhaps this is because the charity is newly formed and the team there are still learning how to engage, or because they are bound by a mandate that doesn’t require external relationship interaction (like some grant-giving organisations). However, many have already successfully moved into the ‘interaction’ stage – where requests for money and support tend to be time-bound and transaction based, for example teenagers taking part in Duke of Edinburgh, parents joining the local PTA and the millions making on-line donations while being entertained by Comic Relief. Arguably, a deeper relationship comes after the next transition in the charity’s life – to the ‘involvement’ phase. Here there are often multiple points of engagement – supporters proudly wearing a wrist band, buying the Christmas cards, donating clothes on the high street. Involvement with the RSPB, for example, includes members visiting nature reserves, taking part in the Big Garden Birdwatch and buying gifts from the catalogue. Credibility of the charity is high, supporters are empathetic and long-term but personal investment is relatively low. 

However, I believe the real opportunity comes when a charity can make the leap to the ‘immersion’ stage. Moving from involvement to immersion requires regular service-delivery roles where a volunteer commits significant amounts of time to fulfil the mission of the non profit organisation (NPO). It requires donors who not only give now but also pledge legacies for the future. It requires fundraisers who not only stand outside Sainsbury’s on a wet Saturday but also go online, share content and are prepared to be very public about their involvement. The level of commitment is significantly higher, as is the emotional engagement that is often marked by a deep personal relevance, such as to specific health charities. Managing these relationships requires different skills and capabilities. Understanding and meeting the need for social exchange is fundamental to fulfilling expectations, strengthening commitment and reducing churn. Providing multiple opportunities for periodic and regular engagement, investing in feedback communication and consistent brand differentiation maintain the momentum.

However, it requires more than simply strong communication, volunteering, and events programmes. To build a high level of stakeholder engagement, there is also involvement within the organisation. Not simply active and on-going stakeholder research to inform decision making- but meaningful involvement in the decision-making of the NPO. Culturally, this can be described as a shift from being ‘for’ service beneficiaries to the organisation being run in part ‘by’ service beneficiaries. This can take the form of participation at trustee level, service user employment, and beneficiary panels for research and policy development feedback. It may be organic and informal involvement, for example, Homeless Link and Clink, or more formal structures, such as the RNIB or Mind.

The final phase of charity development is the end game where the engagement between current stakeholders and the organisation has literally become ‘incapacitated’. In an ideal world, the NPO has successfully achieved its mission and is mature enough to realise it is now obsolete. However, three other scenarios are much more likely. The first is where stakeholder trust in the NPO is fatally undermined by a scandal that they cannot recover from, such as Kids Company. The second is where the organisation and supporters together have failed to achieve the mission, for example the Save the 8th campaign in Northern Ireland. The third is where the competitive context has evolved to such an extent that the NPO is incapacitated as a stand-alone organisation, such as the collapse of the Lifeline Project in 2017. There are two observed outcomes from this situation: the organisation either ceases to exist or needs to merge with another charity to achieve critical mass and be sustainable, such as Hearing Link merging with Hearing Dogs for Deaf People.  The combined organisation then differentiates itself from the remaining competition. This requires a level of strategic thinking anchored in creation. In both scenarios, charities must re-invent themselves and develop a new mission, a new purpose, with resultant new modes of delivery and supporter groups with which to engage

Of course, the nonprofit does not need to pass through all the first four stages to reach this final stage; it could become unsustainable even after the first stage if it fails to raise enough funds, or after the interaction stage through failing to differentiate, or after the involvement stage after achieving its mission. However, the time it takes each organisation to progress through each stage is unique to them.

Although depicted as a linear progression of stages, there is no requirement that all stages will be completed or indeed, that moving from one stage to another is aspired, with the possible exception of moving out of vulnerable incubation stage. Successful and well known nonprofits reside in each of the middle three stages, interaction, involvement, and immersion, characterised by different types of market orientation and stakeholder engagement.

But why does this matter? For managers, understanding the dynamics of brands, services, and indeed the entire charity, ensures they can remain competitive through changing market conditions. It can help them identify the most appropriate investment and strategy. Life-cycle models can provide a conceptual roadmap to manage critical organisational transitions. They help normalise the problems that arise within organisations as they evolve from phase to phase. The challenge is to understand in which stage your organisation is currently residing and what the moment of transition into the next stage might look like. In particular, it supports a conversation about what the charity needs to do to achieve a deeper level of engagement with stakeholders and whether that is feasible and/or desirable.  

To read the full article discussing the application of product life-cycle theory to charities, visit:

https://www.tandfonline.com/eprint/PENmvymkZ3VhmjjheDFe/full?target=10.1080/0267257X.2018.1562487

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