Ethical Issues Facing Non-Profit Making Organisations in Marketing - Assignment Example

University Marketing Professional Practice for Non Profit Making Organisations By Name City, State Date Q1. Ethical issues facing non-profit making organisations in marketing Non profit making organisations are formed with the objective of impacting social change in society and are based on the welfare of people. In this regard they rely on charitable funding and corporate social responsibility carried out by individuals, business organisations or government authorities. Marketing on the other hand is a practice aimed at promoting the endeavours of an organisation in terms of products and services in order to create an appeal to potential users. In the business perspective, marketing aims to attract more consumers and build on a larger market share in order to achieve the business objective of profit maximisation. In a non profit making organisation, marketing seeks to invite or attract well wishers, donors or facilitators to fund social projects that benefit specific communities and sustain the social work (Sargeant, Foreman and Liao 2002, 42). In this regard, the ethics followed in business perspective marketing are different from those of non profit making organisations. For businesses, the sole aim is to increase consumption with a profit orientation while for non profit making organisations is to convince potential funders to facilitate social projects. One common perspective for both forms of marketing is that it is run by professionals who are professionally trained in the marketing field. Therefore, either marketer can fit in any field the find appropriate. Marketing ethics in non profit making organisations are similar to those of profit making organisations in several ways. First, the Direct Marketing Association Non profit Federation advocates for self regulatory measure into the ethical matters. It advocates for honesty, true and non offensive communication which marketers should follow reasonably and encourage others in the field to follow suit. Honesty and clarity should be practiced when seeking membership or solicitation of funding at all times. Stated claims should be verifiable and documented appropriately. Non profit organisation should not claim the ability to handle societal needs that it cannot address. Unrealistic or unachievable promises should not also be made. Accuracy and consistence of representations should be present at all times. Contradictions by different people representing a single organisation should be avoided. Adequate disclosures on size, conditions, durations, placements, and descriptions should be made. If nay limitations or disclaimers exist, they should be adequately disclosed as well (Direct Marketing Association Nonprofit Federation 2013). Marketers for non profit organisation sometimes face the dilemma of disclosure of sponsors and their specific intent in conduct of their activities. Funds raised may be used for other social purposes that are equally important without the knowledge of the facilitators. The scope of these organisations may mislead funders to facilitate a given project while the real intention is to cover up for deficits elsewhere. The biggest ethical challenge that non profit organisations face is misrepresentation of claims to potential funders or sources of monetary aid. The fact that their aim is making social change and conducting charitable initiates can be exploited to get funding falsely. In this regard, marketers should always disclose honestly and truthfully to potential facilitators when soliciting for assistances. Furthermore, most of funders in non profit making organisations do so out of goodwill and compassion and the likelihood to strictly follow up is low (Dolnicar and Lazarevski 2009, 276). They base their trust on information provided by marketers who represent the organisations. Q2 Differences in marketing for profit and non profit making organisations Marketing in a profit oriented is significantly different from marketing for a non profit making organisation. The main difference is in the objectives of marketing for the two organisations. Though the two forms of organisations may apply some of the basic marketing rules and practices, the profit orientation brings some differences in terms of scope target and strategies applied. Lately, non profit making organisations are finding it necessary to market themselves. This is because of the need to make profits in business which they own and also to sustain their operations. Just like profit making organisations compete for consumers and market share, non profit making organisations compete for funders and donors. They also compete for consumers when they are engaged din profit making business to facilitate their activities. Another major difference likely to be faced in is the approach which marketers use to achieve their gaols. In a business setting, marketers convince consumers on utility and value for money that a product provides compared to other competing ones in the market. For a non profit making organisation, solicitation seeks to convince potential facilitators on the positive change that their contributions could have on society (Padanyi and Gainer 2004, 44). They seek to convince them to be part of social change that they would like to see in society. In both cases, marketers should be very convincing and appealing to their targets. Another difference between the two forms of marketing is the market orientation aspect. Marketers in profit making organisations have specific targets where their efforts are concentrated and channelled (Kara, Ali, John, Spillan, and Oscar 2004, 60). A lot of planning goes into identification of a market based on specific consumer needs and potential held towards increasing sales. For non profit making organisations, market orientation does not apply as strategies are directed towards a specific mission which is created in advance and cannot be affected by market requirements. However, in some cases, there is need to identify groups of individuals who are interested in supporting the mission of the organisation and using appropriate ways to attract them like in in product positioning. Developing of communication and interaction channels is an equivalent of advertising in the non profit perspective. Understanding of marketing is crucial for non profit making organisations (Kong, Eric, and Thomson2006, 215). This is because when membership or funding goes down, operation cost soar and specific objectives are not met. Therefore, some of the problems faced in the business perspective are also characteristic of non profit making organisations. Marketers should understand that in the non profit sector that the ultimate objective I not financial but social. There is need to create balance between the mission and the need to solicit for financial support. Question 3 There are several reasons why different people take up professions in non profit making organisations. There are those that are in pursuit of their careers and seek to apply their professional knowledge in impacting social change. There is also the group that is driven by compassion and filling the gaps that authorities such as governments and local authorities cannot fill. What ever the objective, it is crucial that individuals engaging in non profit organisations understand operating dynamics of the organisation and specific missions and vision that the organisation seeks to achieve. Non profit organisations have been known to handle assets worth billions off dollars in their portfolios. This makes them a target for embezzlement and unethical practices. Board members in such organisations receive hefty perks from the funds meant for social activities. Any person joining the management of a non profit organisation should show willingness to make social impact without the financial motivations. This is the reason why non profit organisations engage in volunteer activities to gauge the willingness of people to engage in charity with our financial gain on their side (Steane, Peter, and Michael 2001, 49). This constitutes an ethical dilemma on whether managers of such organisations should live lavishly on donated funds. As a CEO, creating an understanding to all employees that the organisation is not a business is important. They should be ready to operate without financial gains and only receive necessary support to engage in relevant activities. Furthermore, employees in such an organisation should have the ability to solicit for funding from different sources to support the course at hand. Engaging individuals who do not have tangible skills to bring on the table would equate to misusing donors funds (Philanthropy Australia, 2007). As a CEO one should understand that it is unethical to misuse facilitator funds for self benefits or for those close to them. The perks paid to employees and directors of a non profit making organisation should equate to their skills and the contribution that they bring to the organisation. For instance, board members should have connections and initiatives for fundraising in order to increase the financial base for the organisation. In this case the acquaintance should understand that facilitators do not donate funds to promote financial gains. Only a small percentage of donated funds should go to administrative matters of the organisations. The management of non profit making organisations should be lean and efficient to maximise on the usage of funds for intended purposes. It is more of an ethical issue for employers in these organisations to make decisions that are appropriate and reflect the real intentions as presented to funders (National Council of Nonprofits 2013). Therefore, positions in the organisation should net be deemed as posts of prestige but honourable facilitators for social change in society driven by will and not monetary gains References Direct Marketing Association Nonprofit Federation. "Ethical Guidelines for Fundraising & Other Nonprofit Communications." New York: Direct Marketing Association, Inc., 2013. Dolnicar, S, and K Lazarevski. "Marketing in non-profit organizations : an international perspective." International Marketing Review 26, no. 3 (2009): 275-291. Kara, Ali, John E. Spillan, and Oscar W. DeShields Jr. "An empirical investigation of the link between market orientation and business performance in nonprofit service providers." Journal of Marketing Theory and Practice (2004): 59-72. Kong, Eric, and S. Bruce Thomson. "Intellectual capital and strategic human resource management in social service non-profit organisations in Australia." International Journal of Human Resources Development and Management 6, no. 2 (2006): 213-231. National Council of Nonprofits. "Ethics and Accountability in the Nonprofit Sector." National Council of Nonprofits. 2013. http://www.councilofnonprofits.org/resources/resources-topic/ethics-accountability (accessed November 2, 2013). Padanyi, P, and B. Gainer. "Market Orientation in the Nonprofit Sector: Taking Multiple Constituencies into Consideration." Journal of Marketing Theory and Practice 12, no. 2 (2004): 43 – 58. Philanthropy Australia. "Philanthropy Australia." Research and Information. 2007. www.philanthropy.org.au/research/factsheets/nfpfactsheet.pdf (accessed November 2, 2013). Sargeant, A, S Foreman, and M Liao. "NonOperationalizing the Marketing Concept in the profit Sector." Journal of Nonprofit & Public Sector Marketing 10, no. 2 (2002): 41-65. Steane, Peter, and Michael Christie. "Nonprofit boards in Australia: A distinctive governance approach." Corporate Governance: An International Review 9, no. 1 (2001): 48-58. Read More