Nonprofit Marketing Expenses: Who Spends More than Others?

Abstract

ABSTRACT Marketing techniques are well-accepted practices in today’s nonprofit organizations. Still, existing research on nonprofit marketing focuses on a small number of cases, and little is known about the sector-wide marketing practices. This study examines how a nonprofit’s marketing endeavors, measured by the percentage of expenses spent on marketing, vary across organizations, depending on such organizational contingencies as revenue mix, service type, and organizational activities. The analysis of the 2012 Statistics of Income Sample data shows that the proportion of marketing expense in total expenditure is positively associated with the proportions of commercial income and charitable contributions in total revenue and negatively with the proportion of government grants. The results also reveal that the proportion of marketing expense is more strongly associated with commercial revenue than with donation revenue, which implies that the current marketing practices have a stronger emphasis on increasing sales of goods and services. The findings also show significant differences across service types, as arts and environmental organizations spend more on marketing while health and human service organizations spend less than others.