Marketing for Improved Sustainability in Nonprofit Organizations

Abstract

Competition for funding has prompted nonprofit Organizations (NPOs) to adopt marketing and other business-oriented practices to survive. Although certain NPOs have begun to implement marketing strategies, long-term sustainability continues to be a problem. This paper explores the degree to which NPOs in the healthcare industry use marketing strategies to attain sustainability. The data collection and analysis were carried out qualitatively. Data gathering methods included a literature study, in-depth interviews, and focus group discussions. Thematic and content analysis were used to analyze the data. According to the findings, nonprofits cannot successfully implement marketing strategies and business methods due to a lack of marketing know-how, expertise, and donor funding. This paper may benefit NPOs, donors, and stakeholders who support the operations of NPOs. Nonprofit organizations will, for instance, have a better understanding of the significant and positive impact marketing strategies have on their organizations’ growth and sustainability. Furthermore, the paper recommends measures that NPOs can take to address the limiting factors and improve sustainability. The article ends by outlining further research options that will assist other academics engaged in this field.

1. Introduction

Nonprofit organizations (NPOs) are continuously competing for funding in order to fulfill their obligations [1]. As a result, nonprofit organizations must devise long-term solutions [2, 3, 4]. More crucially, the 2008 global financial crisis forced many nonprofit organizations to reconsider their social responsibility programs since traditional charity revenue sources have become very unreliable [5, 6, 7, 8, 9]. To Weerawardena et al. [1], the climate in which nongovernmental organizations operate has worsened, exacerbated by fierce competition for funds. Therefore, sustainability has become significant for NPOs [10].

The growing demand for sustainability has compelled NPOs to develop novel approaches to sustaining their programs while maintaining viability [1]. According to Omura and Forster [10], the major shortcoming of sustainability for most NPOs is providing noncommercial products. Among other things, marketing and management strategies to attract and retain donors are required to maintain survival and continuity in a changing environment. The increasing size and complexity of the nonprofit sector have led many scholars to conclude that the nonprofit sector is becoming more business-oriented, incorporating tools, strategies, and best practices for the organization [11, 12, 13, 14]. In support of this view, Chad et al. [15] and Collins [16] assert that marketing or specific brand management is the most crucial approach that NPOs should adopt to promote their mission. Many researchers recommend transferring marketing expertise from the profit-making industry to the nonprofit sector ([17, 18] in [19]).

Though various businesses may approach marketing differently, it is becoming more important to its success. Applying marketing to NPOs enables them to know the demands of their beneficiaries and funders completely. According to Gainer and Padanyi [20], although understanding and satisfying consumers’ needs increases their happiness, meeting donors’ expectations, and adhering to them increases the donor’s resource commitment [21, 22]. However, the full advantages of successful marketing adoption are not realized by NPOs [23] due to a lack of understanding, significance, and application of the marketing concept [19]. For our primary inquiry, we looked into whether or not nonprofits working in the healthcare industry use marketing strategies to increase their long-term sustainability.

In reality, many NPOs view marketing as only sporadic promotion and advertising [24, 25]. Authors, such as Álvarez-González et al. [26] argue that the utilization of marketing in NPOs is favorably related to the volume of funding, the scope of operation, and the success of the organization’s purpose. Hence, marketing improves an NPO’s financial and operational success.

The importance of an NPO in any economy is invaluable. They are agencies that extend crucial support to communities that cannot access most government services and products [1, 27]. In South Africa, NPOs play a vital role in the national economy, enhancing economic data and assisting policymakers, corporations, and civic leaders in making decisions [28].

The healthcare sector, for instance, has a substantial economic influence. It promotes wellness, offers health services, and creates jobs, training, and capacity development opportunities [29]. They offer free or reduced-cost healthcare and education to their communities, therefore, decreasing illness burdens and contributing to community empowerment and economic growth. Neither the government nor the health care institutions in South Africa can treat everyone who needs them because most people cannot afford private health care. Therefore, nonprofit organizations are necessary to serve a population that continues to be underserved by both the public and private healthcare systems. Nonprofit organizations offer free or cheap services to people who are not being served, have low incomes, are sick, or do not have health insurance [30].

For these reasons, it is necessary to ensure that NPOs in general, specifically health sector NPOs continue to carry out these noble roles. Therefore, research into how marketing and management strategies are currently being adopted in NPOs to improve the survival and sustainability of these organizations become necessary. After all, the continued survival of these nonprofits ensures the continuation of their services to impoverished and vulnerable areas.

Several research papers on NPOs have addressed various elements of NPOs. Weerawardena et al. [1] investigated the relationship between NPO sustainability and NPO strategy emphasis. Iwu et al. [31] assessed the factors that influence sustainability and organizational effectiveness. Omura and Forster [10] investigated the nature of private contribution rivalry in NPOs, considering that they offer non-commercially viable products. Morrison [32] examined the governance and performance of nonprofit organizations. In 2014, Helmig, Ingerfurth, and Pinz reported on the success and failure of nonprofit organizations, while in 2013, Hendrickse reported on the governance and financial sustainability of nonprofit organizations. Bezuidenhout [33] examined various important marketing concepts for NPOs, including the absence of marketing competence and management abilities in NPOs, and further suggested a more innovative business model for NPOs to improve sustainability. Even though these studies emphasize the importance of marketing, there is a lack of consensus on how nonprofit organizations (NPOs) should handle marketing [34]. This study, therefore, aims to establish the extent to which NPOs employ marketing strategies to achieve sustainability. This is to assist NPOs to remain in operation for longer.

In the remainder of the chapter, a literature review will be used to identify the research gap. Following this section will be the research methodology, findings, discussion, recommendations, and future directions for research.

2. Literature review

2.1 What is sustainability?

The term “sustainability” has a wide range of meanings depending on the context in which it is used [35]. An understanding of concepts is best achieved by looking at their relationship to a more extensive system or hierarchy, according to Constanza and Patten [36]. Sustainability may pertain to an organization’s financial strength and uniqueness (economic well-being), environmental protection (environmental integrity), and processes that guarantee social health and well-being (social sustainability) [37, 38, 39, 40]. The term “sustainability” refers to the ability to withstand or persevere [36].

From an economic perspective, this research examines an organization’s financial expansion and competitiveness due to numerous strategies (for example, quality products, price, and services). Consequently, it facilitates the development of several economic conceptions of sustainability. A company’s long-term viability is ensured by its ability to maintain its current state of well-being [41] and by its leadership’s ability to keep the organization going in the long run [42, 43]. Sustainability is defined by Boudreau and Ramstad [44] as a company’s ability to thrive without compromising future needs. Dyllick and Hockerts [45] define sustainability as an organization’s ability to meet its primary and secondary stakeholders’ needs without compromising its ability to meet the needs of prospective stakeholders. In Chigwedere [46], sustainability is defined as the ongoing evaluation of the need to continue a cause, the determination of whether it is still viable, and the exploration of financial options for supporting such a cause. Naido [47] reckons that sustainably run NPOs will be able to raise enough money to continue their programs if their donors fund them.

The above definitions suggest that an organization is sustainable when it remains in operation for a more extended period. Hence, this paper adopts the World Commission on Environment and Development [48], definition of sustainability, which is an organization’s capacity to fulfill its current and future demands over an extended period without jeopardizing its ability to meet future needs.

2.2 What is marketing

According to Kotler and Keller [49], marketing is identifying and economically addressing societal and human needs. According to Drucker [50], the goal of marketing is to understand people such that the product or service provided satisfies their desires. As a result, it is the activity made to elicit desired responses from a specific population [51]. According to The Chartered Institute of Marketing (CIM) [52], marketing is more than just selling and promoting; it is a critical management function that assists an organization in interpreting customers’ requirements and matching them with service and product offers.

Marketing, according to Drucker [50] can be viewed in terms of social and managerial roles. According to the social definition, marketing is a societal process in which people fulfill their needs and desires by freely creating, giving, and exchanging valued goods and services [50]. Marketers, according to the American Marketing Association [53], create, communicate, deliver, and exchange value-adding offers for partners, customers, and society as a whole through a variety of marketing-related activities.

Based on the definitions provided above, many researchers concur that marketing entails selling, exchanging products and services, generating a desire for services, and developing long-term connections, all of which contribute to achieving organizational goals.

2.3 Importance of marketing

Whether a company is for-profit or nonprofit, marketing is critical to its growth. However, different companies may place different values on marketing. Some people may believe that NPOs do not need to spend money on marketing. However, it is advantageous since it promotes growth, attracts funding, and ensures the NPO’s sustainability. The NPO’s ultimate purpose will suffer if the factors are not there [54]. According to Spector [55], nonprofit marketing helps clarify and support an organization’s position and brings it closer to realizing its purpose. According to Tabaku and Mersini [56], embracing marketing in NPOs guarantees that the NPO gets adequate finances to deliver services per their purpose. According to Mahea [57], marketing is essential for organizations to survive intense competition and lure target customers to their products and services. Adapting marketing in nonprofits also provides for a better understanding of the requirements of the NPO’s consumer interests, beneficiaries, and funders. According to Gainer and Padanyi [20], recognizing and addressing consumers’ requirements in order to enhance their experience is a key purpose of marketing. Meeting donors’ expectations and staying responsible to them, on the other hand, attracts the donor’s commitment to resources [21, 22]. Marketing, according to Sargeant [58], attracts resources, enhances the experience of both customers and donors, helps an organization define its capabilities, and advises the NPO on the structure of market analysis. Marketing effectively encourages funders to donate and volunteers to participate [56]. According to Mahea [57], a company’s success is not solely determined by the resources it has at its disposal but also by the relationships it builds with its customers through marketing. However, the potential benefits that NPOs may receive from successful marketing implementation are not being realized as they should be [23].

2.4 NPO marketing

As with any other company, NPOs compete in a highly competitive market, exacerbated by the sector’s growing number of participants and dwindling financing [59]. Bezuidenhout [33] feels that marketing is critical for an organization’s success and sustainability, whether nonprofit or for-profit. Salamon [60] asserts that the nonprofit sector’s marketing philosophy has become more robust as some organizations have embraced commercial management techniques of administration. Mirabella and Wish [61], Andreason et al. [17], Smith et al. [62], and Shani [14] stated that this change toward business-oriented approaches is a result of the huge increase in the number of nongovernmental organizations (NPOs) and the increasingly competitive environment in which they operate.

As in the rest of the world, nonprofit organizations in South Africa face funding difficulties and are attempting to adapt to the decline in financial resources and the increase in competition [33]. The number of NPOs in South Africa has increased rapidly [63, 64]. There has been a steady rise in the number of nonprofit organizations (NPOs) in recent years, which has led to an increase in competition for funds. This is why nonprofits, according to Wymer and Mottner [65], must stand out from the competition, raise public awareness of their brand and mission, and utilize institutional public relations to accomplish these goals.

Sabo [66], Sagawa [67], Burnett [68], and concur that in order to thrive, nonprofit organizations must prioritize cultivating and sustaining relationships with current donors. To do so, MacMillan et al. [69] argue that nonprofit organizations should utilize relationship marketing. According to Sargeant [59] and Burnett [68], relationship marketing activities are best suited for the nonprofit sector. According to Gainer and Moyer [70], NPO managers should identify potential donors and manage sponsor relations (also known as “target marketing” or “relationship marketing”) in order to maximize donations. Unlike traditional marketing, relationship marketing emphasizes developing long-term supportive relationships with current supporters and suggests that an organization will benefit more from focusing resources on these specific relationships than on emerging ones [69]. The success or failure of a company competing in a market is primarily determined by the strategy it develops and implements.

This study examines how nonprofit organizations can adopt effective marketing and management strategies to ensure continued viability. According to the literature, marketing is essential for nonprofits to remain competitive and draw in their target audience. Additionally, adapting marketing in nonprofits can help the NPO better understand its customers, donors, and beneficiaries.

2.5 Marketing strategies for NPOs

Rust et al. [71] argue that marketing strategies should focus on adding value to an organization via the management and measurement of marketing performance, including service quality and client satisfaction. Hassay and Peloza [72] noted that Nonprofit organizations have begun to use marketing ideas such as market orientation, customer relationship marketing, market segmentation, loyalty, and branding. Several scholars (such as [32, 73, 74]) advocate that NPOs market their organizations through the adoption of the following:

2.5.1 Ansoff matrix

Ansoff Matrix provides different business expansion strategies, namely market penetration, product development, market development, and diversification [32, 73], to assist companies in making strategic decisions about the development and expansion of their products, services, and markets. Using it, executives and marketers can devise strategies to ensure their long-term growth and success [73].

2.5.2 Market penetration

Market penetration is a revenue-generating approach in which an organization focuses on selling existing goods or services to existing consumers or markets [74, 75]. NPOs are service-oriented organizations, not product-oriented. While for-profit businesses often utilize this strategy and are seldom explored by nonprofit organizations, the latter may offer their existing core goods to their present beneficiaries and generate cash to fund its expansion and sustainability [76]. This means that selling existing products and services could favor market dominance by an NPO. By attaining market dominance, an organization demonstrates a preference for its product, allowing clients to instantly identify with the organization, assisting in endorsing and developing a positive brand image. According to Custodio [77], creating a strong brand is critical for an NPO because it establishes its distinctiveness, fosters confidence in the organization, and demonstrates awareness in customers’ eyes. Establishing a positive reputation and brand image might assist an NPO by providing a competitive edge over other sector competitors. According to Ansoff [75], this technique may not benefit the NPO since more service offering necessitates increased funding.

2.5.3 Market development

Market development happens when a business makes concerted efforts to expand its current market. As defined by Mwiti (2011), market penetration is the process of pursuing more market categories or geographical regions. According to Coetzee [76], NPOs are good at and are content with fundraising. They remain inside their fundraising comfort zone, even though business-like methods of revenue creation are required. By implementing a market development plan, nonprofit organizations may provide services to new markets, communities, or target groups with comparable needs that align with the organization’s cause and goal. They could segment the market and provide certain services for free while charging a fee for others. For instance, as Coetzee [78] described, how a national rehabilitation organization used a system of price differentiation in which some services were provided for free to low-income clients but paid to those who could afford them. This implies that the NPO may earn income from the segments that pay for the NPO’s services. Therefore, an NPO can extend its services and possibly attract new donors [79, 80].

2.5.4 Product development

Product development entails the creation of new or enhanced goods or services aimed at existing or new markets in order to ensure the continued success of a company [81]. NPOs advocate for certain causes and provide various free services to society. By pursuing this strategy, the NPO may benefit financially by providing new products or services. Apart from donations, an NPO may generate money via the sale of items, such as instructional materials, books, and consumables, and through the provision of services, such as technical assistance to other organizations, outsourcing personnel, consulting, and project management. An organization’s earnings can either be reinvested or put aside as a financial reserve to ensure its long-term viability and use. The Sunflower Foundation, for example, pioneered the sale of bandanas [82]. The fear of losing money and clients is real, even though a few nonprofits are using this strategy [83].

2.5.5 Diversification

In order to grow and increase revenue, a company must diversify by creating new products and entering new markets. Chirani and Effatdoost [84] assert that a company’s ability to grow and thrive will be determined by its ability to diversify. NPOs could adopt this marketing strategy to achieve growth and sustainability. Apart from providing the services demanded by donors, which they are expected to do in order to sustain and establish long-term existence, NPOs may begin to be creative and imaginative, developing new goods that they can sell profitably to an altogether new market. This will boost the organization’s income. Diversifying and pursuing commercial activities strengthen and create a competitive advantage for NPOs [26]. Several South African NPOs have begun to diversify their revenue streams and revenue strategies beyond the not-for-profit sector, rather than relying solely on donations. Coetzee [76] concurs that nongovernmental organizations should cultivate additional revenue streams through side businesses and social enterprise activities. For example, in Cape Town, several nongovernmental organizations have established car wash businesses, coffee or cafe shops, bookshops, training facilities, and social enterprise hubs.

NPOs might use the strategies outlined above to expand, generate revenue, and ultimately attain organizational sustainability. However, implementing this technique in an NPO may be challenging because when donors donate funds, they often define the geographic regions in which the funds must be used and whether the service should be provided for free or not [85]. Coetzee [78] further noted that certain funders, leaders, and government agencies are uneasy with nonprofit organizations generating a profit and want them to work at a discounted rate without profit. Coetzee [78] found that contributions are only one source of revenue and that there is no issue with NPOs making money as long as beneficiaries are not harmed, ignored, or abused and revenues and surpluses are reinvested in promoting the organization’s objective.

2.5.6 Boston matrix

The Boston Matrix is a mechanism for rating items or services in order to determine the potential monetary contribution and demand for each [86]. The matrix categorizes products based on their performance: cash cows, dogs, stars, and question marks – based on their growth rate, cash flow, and market share [87]. As part of brand marketing and product management, the technique is used to select new products or services and expand existing ones. The method aids organizations in avoiding some of the negative elements that might affect market share and industry growth when balancing market share and industry growth [86]. Boston Matrix’s theoretical applicability in nonprofit organizations is based on the fact that it enables businesses to make decisions about how to manage a wide range of businesses and products as well as the marketing portfolio of nonprofit organizations, expressed in terms of the organization’s financial resources [88].

2.5.7 Other marketing strategies

Nonprofit organizations (NPOs) can implement various marketing strategies and approaches without changing their mission [56]. These methods, according to MacMillan et al. [69], include:

• Market segmentation: Classifying the people who care most about the NPO’s mission and helping it succeed.

• Product positioning: The organization’s marketing efforts should create an image that appeals to its market segment.

• Advertising: Marketing communications will then be developed to target this market segment.

• Place: Utilizing marketing strategies and communicating with a specific target market through their channels. In essence, marketing strategies help nonprofit organizations act strategically and position themselves in order to reach their target market and benefit from it.

3. Methodology

To gather and analyze data, a qualitative technique was used, combined with in-depth semi-structured interviews. This technique was chosen as the best fit for this research since it allowed the researchers to compile a full report on the participants’ thoughts, opinions, and understandings pertaining to the research [89]. The qualitative technique also helped the researchers to obtain more in-depth knowledge [90]about NPO marketing and sustainability through interaction with study participants [91].

The study population included all NPOs in the healthcare sector in the Cape Metropolitan region of South Africa’s Western Cape. It was impossible to contact all of the individuals in the research due to time restrictions and inadequate resources. As a result, a sample was chosen to reflect the population using the purposive sampling method. Purposive sampling involves selecting a sample based on the author’s judgment and experience that the identified individuals will fulfill the study objectives [92]. This strategy was chosen because it was considered that it would be more effective as it provides greater access to the relevant research participants [93]. As a result, it enabled the identification of professionals who were well-versed in the issue under investigation [94].

The study’s sample was chosen from 960 Western Cape healthcare NPOs [95]. The following factors influenced sample selection: First, the NPO must be in the healthcare sector and have received donor support. Second, the NPO must have been in existence for at least three years. However, not all identified NPOs consented to participate in the study since they did not engage in any form of marketing, limiting the participation to seven (7) NPOs.

The inclusion criteria for the individual participants were defined as follows: the participant must be part of the marketing, operations, and financial management functions of the selected NPOs. These significant members were chosen because of their critical responsibilities within the organization. Their portfolios include responsibilities in production/operations, marketing, and finance because they are closely related to organizational performance [96], which the researchers considered valuable participants to inform the study.

The participating NPOs were approached for permission to conduct the study. The fieldwork started after obtaining the required consent from each participating company. A pilot study was then conducted to validate the interview questions. Face-to-face, in-depth interviews were undertaken with 15 participants from the 7 NPOs reached. All interview responses were recorded and transcribed during the interview process. In addition, 3 focus groups were conducted, which comprised five (5) people each. Because many of the investigated organizations did not have enough staff to cover the essential functions under study, the individuals contacted during the focus groups were only from 3 NPOs that represented marketing, finance, and operations responsibilities.

The appropriate number of participants reached through interviews and focus groups were guided by data saturation. Data saturation occurs when there is enough data to replicate the investigation and the ability to get more fresh data has been exhausted [97, 98]. The study included thirty (30) participants: 15 participants in in-depth interviews and 15 focus group participants. Content and thematic analysis approaches were used for data analysis.

4. Results

To make sense of the data acquired, the researchers kept the study aim in mind and classified the data into different themes according to the study’s objective. The results are presented in themes emerging from the literature, followed by the relevant verbal responses and a summary discussion of the findings in relation to the study objective and literature.

4.1 The role of study participants

From the 15 interviews conducted, 13% performed the marketing function, 47% finance function, 33% operations management, and 7% performed other business development functions.

Although operations, finance, and marketing are essential functions for achieving sustainability, it is evident that some of the surveyed nonprofits lack these essential functions. Based on the findings, one can observe a lack of staffing capacity, as the majority of surveyed nonprofit organizations had one person performing multiple roles, and some lacked the key positions. Marketing and management strategies for long-term success can be hampered if these essential functions are missing.

Bettley and Burnley [99] and Sanders [100] argue that operations management substantially impacts sustainability and that the operations function must embrace sustainability. However, it is impossible to separate the financial function from others, such as marketing [101]. Similarly, Parthasarathy [102] concludes that nonprofits require good governance, fiscal prudence, and brand building (marketing) to continue attracting funding.

Given the preceding, nonprofits must be equipped to embrace sustainability. According to Batti [103], a lack of staff in nonprofits has resulted in many being unable to take advantage of the many opportunities out there for them because they lack the knowledge and resources to do so.

4.2 Years in operation

To determine whether the number of years an organization has been in operation is a determinant of its viability, the study included a question about the number of years each NGO had been in operation. From the seven organizations contacted, the majority of organizations interviewed had been in operation for more than 10 years, with 57 percent (4), 29 percent (2), and 14 percent (1) having been in operation for more than 20 years, respectively.

Even though most NPOs had been around for a long time, none had demonstrated that they had become autonomous or self-sufficient, as they were still reliant on donations, particularly from outside the country. To achieve long-term viability, it may be necessary to implement effective marketing and management strategies. Coetzee [76] asserts that nonprofit organizations excel at fundraising and are happy to do so. Despite the fact that they must use business-like methods for generating income and ensuring long-term viability, they remain in their fundraising comfort zone.

Could this be why they had been in operation for several years? Can this be considered a sustainable practice?

4.3 Theme 1: marketing knowledge and management expertise

The main objective of this study was to establish the extent to which NPOs employ marketing strategies to achieve sustainability. The researchers use the following subthemes in order to achieve this specific goal:

4.3.1 Marketing expertise within NPOs

Examining the current implementation of marketing strategies in nonprofit organizations, the study assessed the marketing expertise possessed by the surveyed nonprofits to adapt marketing strategies for sustainability effectively. Only two out of fifteen nonprofit interviewees (or 13% of the total) confirmed having a marketing department. The rest of the participants viewed marketing as a function that could be performed by any member of the organization at any given time. The study found that nonprofit organizations lacked marketing expertise, which hindered their ability to adopt these strategies for sustainability. As a result, nonprofits may find it difficult to implement sustainable marketing strategies due to a lack of marketing expertise. Concurring, one of the participants (Participant 1) notes that marketing expertise in the nonprofit sector was never considered necessary. The sector is completely devoid of market insight, which has a negative impact on their ability to sustain themselves because there is no strategic directive guiding the expansion or incorporation of programs or the ability to influence this decision.

In addition, most participants acknowledged that their organizations lacked the financial resources necessary to attract marketing specialists, which prevented nonprofits from fully embracing business opportunities and establishing brand visibility. Several participants provide the following explanations:

Participant 4:If you examine the trends regarding the attraction of marketing talent to the nonprofit sector, you will likely discover that it is exceedingly difficult to find true strategic marketing talents, such as chief marketing officers and marketing specialists. In the nonprofit sector, these salary trends are unaffordable.

Participant 8:We do not have a marketing person within our organization due to a lack of funding. However, marketing is crucial to ensuring that your brand is visible and well-known, but it is expensive for me. I am battling on the ground to hire a marketing professional. It is pricey. I believe that one of the reasons nonprofit organizations are struggling is that we cannot afford to have a marketer who is capable of pushing the organization toward sustainability.

According to another participant, the donors impose strict rules and regulations on their funding, which are not conducive to marketing efforts.

Participant 13: Without a marketing expert, one of the difficulties we face as an organization is generating interest in what we do. Our donors do not even cover the cost of hiring marketing personnel. If we employ them, it will be with funds from a source other than donors.

According to other participants, marketing is not a requirement but rather an ad hoc function that can be performed as needed by any member of the organization, even if they lack marketing experience or expertise. In a summary of the findings, one of the participants stated:

Participant 6:When the need arises, the organization occasionally contracts individuals to perform these specialized functions.

It is evident from the participants’ opinions that nonprofits lacked marketing expertise, even though this function was deemed essential for these organizations. It is clear from these findings that nonprofit organizations lack the marketing expertise to implement and adopt sustainable marketing strategies. This could indicate that nonprofit organizations are not using effective marketing strategies because they lack the necessary expertise. Even though some claim this is due to a lack of funding and resources, these findings back up the claim made by Othman et al. [104] that NPOs have lost out in critical areas like financial health enhancement and expansion because of a lack of experience and skills.

The participants’ perspectives are also somewhat congruent with those of Drucker [105], Dolnicar and Lazarevski [23], and Williamson [106], who found that despite the shift to adopting marketing strategies in nonprofit organizations, marketing is frequently not prioritized. There is a dearth of marketing education among nonprofit workers [23, 33, 34]. An investigation conducted by Proust et al. [107] found that marketing tasks are frequently delegated or assigned to untrained volunteers or overburdened employees. This could also be a reason why nonprofits are not reaping the full benefits of the effective adoption of marketing strategies.

Based on these findings, we believe that the availability of marketing expertise in the NPO sector will positively impact the organization’s competitive positioning, which will attract the necessary funds for sustainability.

4.3.2 Marketing activities in NPOs

Since the study focused on nonprofit organizations (NPOs) adopting marketing strategies to achieve sustainability, information about NPOs’ marketing activities had to be gathered. Participants agreed that marketing is crucial for nonprofits; however, their activities aim not necessarily to achieve sustainability but rather to increase the organization’s visibility. As some of the participants explained:

Participant 1:I must advance the organization’s niche as well as our donor’s reputation in a transparent, equitable, and fair manner. Despite this, I integrated marketing and communication across multiple channels, annual reports, digital channels, and brand activation within the community we serve.

It is apparent from the above responses that the NPOs are engaged in various marketing strategies. Despite this, our view is that some participants are either not au fait with what marketing is or believe that their attempts are improperly targeted and as such, they have not been able to attract meaningful funding avenues sufficiently. For instance, Participant 1 said: “…marketing is very often misunderstood by non-marketers as promotion which it’s not.” Almost consistent with this view is the expression of Participant 8, who said, “If our marketing was correct, by now people would have known who we are in South Africa.”

Could those responses be linked to what Tabaku and Mersini [56] referred to as NPOs’ lack of understanding of what and how marketing should be conducted? As extant literature suggests, confusion about effectively deploying marketing strategies in NPOs can result in depleted opportunities to remain sustainable. NPOs’ lack of understanding and knowledge of marketing principles is consistent with the evidence in the literature (e.g., [33, 34]), which shows that NPOs are still lacking in the ability to effectively implement marketing strategies that will lead to long-term sustainability. Essentially, NPOs must prioritize marketing in order to remain in operation [34].

4.3.3 The existence of a marketing budget and marketing strategy in NPOs

According to the survey results, there was no marketing budget or marketing strategy in any of the participants’ organizations. Hence, they believe that the latter is critical to implementing marketing strategies to grow and expand the organization. These, according to the participants, did exist because they did not have the necessary skills and resources. As one of the participants recounted:

Participant 8:“We lack a marketing strategy; I want to develop a strategy with this organization. It's one thing we lack but we do not have the skills or someone with marketing knowledge within the organization to drive this.”

In relation to having a marketing budget, some of the participants said:

Participant 1:“One of the challenges in the organization is not having a centralized marketing budget to advance the organizational objectives.”

Participant 6:“We do not work with a marketing budget, [rather] we have to see whether there are any extra funds from the unrestricted funds.”

The participants remarked on the importance of a marketing strategy:

Participant 3:“No, we do not have a particular process to follow when it comes to marketing. There isn't a specifically defined strategy in place to follow. The process is rather conversational.”

Participant 5:“No, we never had a proper plan of how do we progress or what are we doing in terms of marketing.”

If these organizations lack a marketing strategy and are unsure of how to go about marketing, it could explain their lack of success [34]. An organization’s marketing strategy outlines its target markets—the market’s value to the organization based on market analysis, as outlined by Kotler and Keller [49]. Therefore, nonprofit organizations must consider prioritizing marketing if they are to overcome challenges such as limited resources [23, 105, 106].

4.3.4 The importance of marketing in NPOs

The researchers wanted to know how marketing is perceived in nonprofit organizations and if it is necessary for them. Interestingly, all 15 participants (100 percent) agreed that marketing is critical for nonprofit organizations. Emphasizing the importance of marketing, some of the participants had this to say:

Participant 1:“I don't think it's an if, it's a must-do. I think with the current global trends with the number of NPOs that are out there, I think there is a huge amount of competition for a limited amount of resources and already speaking about that you realize that the ones that are most visible, market the best and has the best public relations.”

Participant 3:“Marketing for me, yes, I think it's very important. It is the branding of the organization. How big marketing should be in any organization, I don't know, but I think it should be there.”

Participant 8:“Marketing, let me be honest, you need to have a competitive edge. That's what marketing is all about. In the current situation where NGOs are fighting for money, for the same bulk of funders, you need to come up with a competitive advantage in order to survive.”

Adding on, another respondent (Participant 10) indicated that: “Marketing is everyone’s job within an organization.”

It is evident that the adoption of marketing in nonprofit organizations helps their brands stand out and better position their organizations better positioned to competitively attract funding. Previous studies have found that marketing is beneficial, and these findings are consistent with them. It helps with growth, attracts funding [54], defines and defends the organization’s position, and brings it closer to achieving its mission successfully [55]. It ensures that the nonprofit has enough money to carry out its stated goals and objectives [56]. Likewise, marketing allows nonprofit organizations to manage their brand and understand the needs of their donors, customers, and beneficiaries [20]. Thus, mission-related resources can be attracted [21, 22].

4.4 NPO challenges

4.4.1 Funding and resources shortages

Clearly, the NPO sector’s funding situation is at the heart of most of the issues. When it comes to nonprofit organizations (NPOs), raising money is the biggest challenge they face. This is because NPOs are heavily dependent on donor funding [64, 108, 109, 110]. In relation to these findings, one of the participants said as follows:

Participant 1:“We face a myriad of challenges. NPOs are, by definition, resource-poor. There is always a funding challenge. There is always that macro force that exerts pressure on the organization’s ability to sustain itself.”

Are these problems the result of NPOs’ inability to attract and retain qualified staff or their failure to effectively adapt their marketing strategies for sustainability? The following is what one of the attendees said:

Participant 12:“…NPOs are sometimes not able to attract the correct skillset at the right price, and they substitute that with lesser equivalent. I think it’s a major barrier to sustainability going forward”.

According to this investigation, funding for nonprofit organizations was also found to be inconsistent and discontinuous. This is consistent with Lombard’s [111] assertion that a lack of system transparency results in significant inconsistencies in distributing funds to nonprofit organizations. There has been a decline in South Africa’s support for nonprofit organizations [112]. It is clear from the following accounts that this is so.

Participant 4:“Of course, the issue of funding, the challenge is that each year it is being cut. Also, changes in the government policies of our funders affect the funding.”

Participant 15:“Access to funding. Donors push back when they no longer want to fund you by raising the standards, requirements or criteria of funding.”

According to Pope et al. [34], a lack of financial resources is linked to poor brand recognition, an unclear target market and competition, and an inability to use online marketing. This demonstrates the need for financial resources to support nonprofit organizations’ marketing efforts in their quest for sustainability.

4.4.2 Education, lack of skills, and lack of knowledge

According to Morris et al. [113], nonprofit organizations typically lack the skills and experience of for-profit organizations. Many argue that the lack of resources and funding is to blame for NPOs’ poor performance in critical areas like financial health improvement and expansion. Still, Othman et al. [104] found that the lack of experience and skills has contributed to NPOs’ poor performance. Only a small number of nonprofit marketing staff have received formal marketing training [23].

According to the study’s findings, there is a strong correlation between the skills of nonprofit organizations and their capacity to implement marketing and management strategies effectively. In this regard, we found that the following participant responses indicate agreement with the premise that NPO marketing requires essential skills.

Participant 1:“I think that education also plays a huge role because of the lack of resources, NPOs are sometimes not able to attract the correct skillset at the right price, and they substitute that with lesser equivalent. I think it's a major barrier to sustainability going forward.”

Participant 8:“Marketing goes hand-in-hand with business principles. Not all organizations, especially small or community-based organizations, they do not have the knowledge. That is a massive gap.”

Participant 15:“One of the biggest gaps when it comes to sustainability is that NPOs do not have the proper skills to market their product.”

Respondent 8’s remarks reveal a lack of marketing expertise among nonprofits: “Marketing the product to the wrong market and not to the relevant people like advertising youth programs in ECD.” A lack of understanding of the intended audience is evident in this account.

5. Discussion

This study confirms that NPOs lack sufficient marketing knowledge to adopt and implement marketing strategies. One can infer from these findings that NPOs have a harder time implementing long-term marketing strategies because they lack marketing expertise. We argue that marketing experts in the NPO sector should help the organization’s position in the market and its ability to raise money, which allows the organization to become sustainable.

Secondly, NPOs’ marketing activities were more focused on promoting their cause than on achieving long-term sustainability. NPOs, according to these findings, have a poor grasp of marketing and how to approach marketing in order to achieve sustainability. Nonprofits could benefit from a better grasp of marketing concepts and principles in order to develop and implement more sustainable strategies.

A third finding of the study was that nonprofit organizations lack a marketing strategy and a marketing budget, which are essential for successful marketing strategies. Nonprofit organizations may lack marketing prioritization due to a lack of marketing direction and a lack of funds to implement marketing strategies. According to Barone [114], nonprofit organizations must first have a proper marketing strategy to effectively implement marketing strategies for sustainability to reach customers and achieve organizational objectives.

Fourthly, the study uncovered a shortage of skills in the organization’s core functions. From these findings, it is safe to say that the leadership of nonprofit organizations lacks the marketing expertise needed to implement strategies for long-term success. Because of this, we believe that an organization’s marketing, operational and financial functions require the full attention of its management and board and cannot be implemented effectively if there are skillset gaps. For nonprofits to be sustainable, management must lead and spearhead the necessary change. Marketing and management are critical components of nonprofit organizations, so they must be prioritized within the organization and resources allocated to attract or hire marketing specialists.

Finally, the study found that funding is the most common challenge faced by nonprofits. Among other things, the participants discussed the importance of education, the sustainability gap, donor priorities, and political and economic challenges. These issues hinder these organizations’ ability to pursue sustainable marketing and management strategies.

The majority of the study’s findings indicate that marketing in nonprofit organizations is not prioritized, even though all participants stated that marketing was of the utmost importance. Marketing, according to Corak and Snajder [115], is the constant planning and conception of ideas or services that drive organizational change. A plan outlining how to implement the ideas must be in place to properly implement ideas that drive change.

6. Conclusion and implications

On the one hand, nonprofit organizations have been shown to benefit from effective marketing strategies that positively impact their growth and sustainability. Nonprofit organizations, on the other hand, rarely reap the full benefits of marketing and management strategies because of a dearth of marketing expertise and a reliance on donor funding.

A growing number of nonprofit organizations are competing with each other, which has led to a decrease in funding sources [5, 6, 8, 9, 98]. South African NPOs must be able to continue delivering value and impacting disadvantaged groups in order to remain sustainable. These goals can only be achieved by enacting legislation that promotes nonprofit growth and development. This result is consistent with the current research, which promotes the development of a conducive environment for nonprofit organizations [116, 117].

Many studies have found that nonprofit organizations are hindered by a lack of business acumen that prevents them from effectively pursuing growth and sustainability strategies [23, 34, 103, 104, 113, 118]. Other studies indicate that NPOs have been compromised by entrusting these essential functions to unqualified personnel, resulting in a loss of ground in crucial areas, such as financial health enhancement and expansion [104, 107, 119]. To avoid this, the policies of nonprofit organizations should consider establishing certain criteria or standards that employees must meet prior to being entrusted with positions that are essential to the organization’s survival. Nonprofit organizations should invest in qualified personnel for these crucial positions.

7. Recommendations

Based on the findings of the study, the researchers recommend the following:

• In order to diversify and increase their revenue streams, nonprofit organizations should look into other funding sources and income-generating activities. This will provide them with sufficient finances to lure the marketing skills necessary in the industry. This will also allow them to avoid some of the drawbacks of relying on a single means of funding.

• Nonprofits should prioritize marketing and not view marketing as a strategy that only relates to the businesses that are for profit-making. Also, NPOs should dedicate and allocate funding to market their organizations.

• NPOs should invest in training the individuals who are already engaged in the marketing for their organization about marketing in NPOs, specifically how to view marketing as a vehicle for establishing exposure for the organization and as a vehicle for sustainability.

• NPOs should invest in recruiting marketing professionals so that marketing strategies and concepts may be properly implemented in order to create organizational sustainability.

• Before imposing terms and conditions, donors should begin to consider the needs of NPOs. The donor and the NPO must agree upon terms and conditions, which should be in both parties’ best interests.

• Donors should direct funds toward activities that promote organizational growth and development, such as marketing.

8. Limitations and upcoming studies

Due to time and budget constraints, the study only included seven healthcare NPOs. More so, it excluded all NPOs outside the Cape Metropolitan Area and other regions of South Africa, thus limiting generalization. This study relied significantly on qualitative methodologies considering the nature of the research problem. As such, the data was not subjected to significant arduous statistical scrutiny that is often associated with quantitative methods.

Future research may consider adopting the quantitative approach with a more significant sample. Whereas this research mainly looked at marketing and management strategies for NPO sustainability, future research might explore other strategies for NPO sustainability, including creating a framework for how these marketing and management strategies might be effectively used in NPOs to ensure long-term sustainability. This would provide a resource for educating nonprofit organizations on how to execute these techniques.