Top 5 Priorities for a Small Nonprofit Marketing Budget

Small nonprofits have it tough. Where larger organizations can afford to hire lots of people working in highly specialized roles, employees at small nonprofits are used to wearing several hats at the same time.

One day you’re mailing out thank you cards to big donors, the next day you’re posting on Facebook and planning a general awareness campaign, the next day you’re setting up tables for a luncheon and calling to make sure the caterers show up on time.

When there’s always something else to do, marketing is usually one of the first areas to suffer. It’s a tough economy. Everyone’s trying to make do with less. Unfortunately, that can lead nonprofits to underinvest in their marketing budget.

The Stanford Social Innovation Review calls it “the nonprofit starvation cycle”: when nonprofits underinvest in overhead costs to devote more money to their mission, only to find that cutting the overhead starves the organization of the resources it needs to fulfill its mission in the first place.

“A nonprofit can’t thrive if it doesn’t have community support,” says Justine Burke, Vice President of Marketing at Metropolitan Ministries, one of Big Sea’s nonprofit clients. “If we just sat here and waited for people to send in money we wouldn’t be able to execute our programming.”

But figuring out just how much to spend on marketing can be tricky for small nonprofits. A lot of nonprofit boards are used to an older paradigm that stipulated that every cent that could go toward programming, should go toward programming. This way of thinking has been reinforced by online charity rating sites that equate low overhead with a well-run organization.

But the truth is more complicated. Read on to find out how much nonprofits should spend on marketing and what areas you should prioritize in your budget.

How much do nonprofits usually spend on marketing?

Nonprofits should spend somewhere between 5 and 15% of their overall budget on marketing. That’s the rule of thumb. But how much should your organization spend? Five percent? Fifteen? That depends on the scale of your nonprofit.

Let me explain. If your nonprofit has a budget of $140,000, 5% is just $7,000. That’s not gonna go very far. A few direct mailers, an ad in the paper, and poof, that’s gone.

But if your nonprofit’s budget is $1 million, 5% is $50,000. That’s a lot more to work with.

So the lesson here is that smaller organizations should be open to spending a larger percentage of their budget on marketing — closer to 15% than 5%. The numbers may hurt at first, but it’s an investment in the long term goals of your organization.

That right there is also a good example why strict percentage guidelines can be misleading. Instead of focusing on spending no more than a certain percentage, your nonprofit should focus instead on what specific, measurable goals you want to accomplish with your marketing. Set a goal, determine how to measure success, and allocate a certain amount of money to achieve it.

If you don’t hit those goals, before you spend more money, focus on figuring out why you weren’t successful. Are there other channels you could have used? Is there a better way to spend that same amount that will yield a better return on investment? Once you’ve set your goals and tested a few ways to achieve them, then you’ll have a better view of the big picture for your marketing budget.

As Dan Pallotta at the Harvard Business Review writes, many nonprofits resist advertising from “a reactionary disdain for anything that smacks of commercialism” and due to “public pressure to maximize short-term program spending without regard for building scale or long-term problem-solving.”

But building scale to have a bigger impact on the problems you were founded to address is exactly what most nonprofits are aiming at.

5 Priorities for a Nonprofit Marketing Budget

Okay, so you know about how much you should spend and you’ve got a plan for how to measure your spending. Now… what should you prioritize? Here are five items you should prioritize in your marketing budget (plus an extra honorable mention, just for good measure).

1. Software Solutions

It’s probably not the first thing you think of when you think about marketing, but starting with the right software will do wonders for your nonprofit’s marketing strategy. A good CRM (that’s customer — or, in this case, constituent — relationship management) lets you coordinate and organize outreach to donors, members, volunteers, and other potential supporters. It should also allow you to collect and analyze data about your community to improve your outreach efforts.

You can manage your communications and record your points of contact so that members of your organization don’t accidentally duplicate jobs or work at cross-purposes. In the process you’ll reduce your overhead costs and streamline internal management processes, so it may even help you save money elsewhere.

As a Hubspot-certified agency, we always recommend them as a good place to start. Hubspot even offers a selection of free CRM software services so you can test them out before committing to a paid subscription.

Online fundraising platforms such as Classy offer an engaging and intuitive user experience that will likely appeal to donors and help with retention. There are even some free CRM options you can consider such as Givebutter or Funraise.

2. Content Marketing & SEO

92% of nonprofit marketers use at least some form of content marketing. Along with SEO (search engine optimization), it’s an essential component in drawing organic traffic to your nonprofit’s website.

Unlike with paid advertisements, organic traffic is traffic you don’t have to pay for — but you do have to budget for the time, effort, and expertise that go into creating keyword-optimized content to boost your rank on search engines.

Whether you dedicate time to producing that in-house or work with a content marketing agency, a steady stream of high quality content on your site will steadily boost your nonprofit’s online profile, paying dividends down the road as you engage more donors and volunteers. 38% of all nonprofit web traffic in 2022 came from organic visits so it’s nothing to ignore.

3. Search Engine Marketing

The two key components of a search engine marketing strategy are SEO and pay-per-click (PPC) advertising. Just in case you need a refresher, PPC ads are sponsored ads that appear at the top of a Google search. They’re called “pay-per-click” because you pay each time someone clicks on the ad, rather than each time it’s displayed.

PPC ads go hand in hand with SEO strategy to boost your authority online. Think of the last time you did a Google search, and you saw the same name appear twice at the top of the page, once as a sponsored ad and again as an organic result. Appearing twice on that first page boosts your credibility and establishes your brand.

4. Paid Social Media

What else, what else? Oh yeah, Facebook. Heard of them? Paid social media advertising should be another key component of your nonprofit’s marketing budget. Social media platforms like Facebook, Twitter, Instagram, and — dare I say it? — even Tik Tok offer unprecedented opportunities to micro-target the audiences who’ll be most receptive to your nonprofit’s goals. And while it’s possible to do this through organic posting, unfortunately social media platforms have made it harder to get the kind of reach a viral post could manage in the past.

One great way to break through the noise on social media is with a sponsored post. That’s when you pay Facebook to display your post in more people’s timelines, including people who don’t already follow you. A good strategy is to wait till you’ve posted something that’s getting better-than-usual organic engagement. Think of it like an audition. Once you’ve seen that the post is doing well, paying Facebook to promote it will help push it over the edge.

How much do nonprofits tend to spend on social media?

While amounts vary significantly depending on platform and nonprofit type, on average nonprofits spent $126 on social media ads for every new donor acquired, according to the 2023 M+R Benchmarks Report.

5. Programmatic Display Advertising

Lastly, there’s programmatic display advertising — that includes banner ads and other image-and-text displays that show up as you’re browsing the internet. Programmatic advertising uses automated bidding to reach your target audience while they’re spending time online.

(Honorary Mention) Email Marketing

Just one more, we promise. We couldn’t help ourselves. Email marketing might not sound like the sexiest way to spend your nonprofit’s marketing budget, but it gets results. Email isn’t just for getting donations: it’s critical to establishing an ongoing relationship with donors and volunteers.

With the right automation software, it can be used to pair the right person with the right message right when you need it. An automated email drip campaign will help draw people in, and a well-placed personalized message can yield great dividends when it comes to inspiring loyalty in your audience.

Let’s make the most of your nonprofit marketing budget

Maybe you’re looking for advice on a top-to-bottom marketing strategy and you need to consult with the experts. Or maybe you’ve got a plan all set already and you just need some additional help pulling together the components.

Whatever budget you’re working with, whatever situation you’re in, the marketing experts at Big Sea have years of experience working with nonprofits to make those marketing dollars count. Schedule a call to find out what we can do for your organization.