Many nonprofit organization executives struggle with the idea of branding in general and the commercialization of their organization and its mission through licensing specifically. However, brand licensing can provide a controlled opportunity for nonprofits to connect their strategy with external audiences in ways that build greater awareness and trust for their mission.

Using licensing to extend the brand and build affinity with broader audiences provides an opportunity to both attract and develop stronger partnerships, too. The organization’s brand lends value to these partners without fear of exploiting the partner’s market power or financial resources (Kylander & Stone, 2012). Through a licensing arrangement, both the commercial licensee and the nonprofit organization can benefit.

The licensee can improve its brand value through its positive association with the nonprofit’s cause in addition to any financial considerations from the sale of the licensed product. The nonprofit organization will typically benefit from brand licensing in these three ways:

Increased Brand and Mission Awareness in New Markets

Licensing provides an opportunity for nonprofit organizations to increase exposure and raise awareness of their mission. Using licensing as a brand-extension mechanism, organizations can get their name and cause in front of new audiences—audiences for which the organization may not have top-of-mind awareness.

A strategic licensing program can put the organization’s name in unexpected places for the average consumer. By creating brand alignment with a perfect product fit, the organization will gain a new opportunity to elicit curiosity. This curiosity will increase awareness and connection with the organization and its mission in ways that would likely not exist without licensing. If done well, the opportunity provides the organization’s long-term potential to connect with new donors, members, sponsors, partners, and volunteers.

Enhanced Trademark Protection Capabilities

Nonprofit organizations are typically charted to provide a social benefit to a cause or a group of people. In delivering on their stated mission, their image (e.g., logo and community prominence, among other factors) often achieves a level of familiarity and visibility common to commercial organizations. However, this familiarity can sometimes lead to the use of the organization’s marks, words, and phrases in ways that are inconsistent with its brand and mission focus. Licensing provides a structured methodology for managing the organization’s intellectual property assets.

The federal registration of trademarks and a license agreement can:

• Define permissible use of the marks on products, with services, and in marketing;
• Frame the nature of mark use;
• Establish the term or duration of mark use;
• Incorporate provisions for product approvals, and ;
• Define geographic territories and channel distribution.

Among many others, these points serve to protect the organization and the goodwill for which it has built among its constituencies and the public. Licensing provides one of the best ways to protect the brand and its trademarks and ensure the brand’s value for future generations.

New Revenue Creation

Changes in demographics, culture, society, and wealth can significantly affect nonprofit organizations’ financial support (Indiana University Lilly Family School of Philanthropy, 2018). Many organizations are looking for new revenue streams that address these market changes and supplement declines in individual donor contributions and corporate sponsorships.

Arguably, revenue generation should not be the primary purpose of licensing within the nonprofit sector. However, brand licensing is a viable way for organizations to create new revenue streams with minimal investment. Best of all, it allows connection to new audiences in a meaningful and relevant way to the needs, values, and expectations of that audience.

Nonprofit organizations often have a more difficult challenge than commercial organizations when developing a viable brand licensing program. Nonprofits sometimes lack sufficient visibility beyond their core donor base; therefore, they may be unattractive to larger prospective licensees.

Conversely, a robust brand licensing program is one of the best ways to raise the organization’s visibility in new markets. To bridge the gap, nonprofit organizations must develop a focused licensing strategy that includes a research-driven approach to market understanding and the willingness to take calculated risks with brand-extension. Moreover, executive leadership must understand and support the need and value of innovation in building long-term support for their organization’s mission.

Many nonprofit organizations already operate successful licensing programs including the American Red Cross, Best Friends Animal Society, Boy Scouts of America, Girl Scouts of the USA, the National FFA Organization, and the National Wildlife Federation to name a few.

To learn more about how David Harkins Company can help you build a licensing program for your nonprofit organization, contact us at hello@davidharkinscompany.com. You can also learn more about our licensing consulting services and our licensing workshops by clicking the appropriate link. You can also learn more about our licensing consulting services and our licensing workshops by clicking the appropriate link.

References

Kylander, N., & Stone, C. (2012). The Role of Brand in the Nonprofit Sector. Stanford Social Innovation Review, 37-41. Retrieved July 14, 2019, from https://ssir.org/articles/entry/the_role_of_brand_in_the_nonprofit_sector

Indiana University Lilly Family School of Philanthropy. (2018). 2018 U.S. Trust Study of High Net Worth Philanthropy. Bloomington: U.S. Trust and Indiana University Lilly Family School of Philanthropy. Retrieved July 10, 2019, from https://scholarworks.iupui.edu/bitstream/handle/1805/17667/high-net-worth2018.pdf

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