In a world saturated with products, services, and marketing messages, a strong brand stands out like a beacon. But branding isn’t just about a clever logo or catchy tagline - it’s about the deeper, intangible asset known as brand equity. Although often overlooked, brand equity can significantly influence customer (or donor) loyalty, perception, and even an organization’s bottom line.

What Is Brand Equity? 

Brand equity refers to the extra value a brand name brings to a product or service beyond the functional benefits it provides. Think of it as the cumulative goodwill, trust, and recognition that a company has cultivated over time. It is why consumers might pay more for a cup of coffee from a well-known cafe rather than opt for a cheaper or unknown alternative. 

There are a few key components that build to “brand equity” – components, that it should be said, are true for both non-profits and for-profits:  

1. Brand Awareness: How recognizable is the brand among consumers?   

2. Perceived Quality: Does the brand signal a certain level of quality?   

3. Brand Associations: What attributes or emotions come to mind when people think of the brand?   

4. Brand Loyalty: How likely are customers to continue choosing your brand over competitors? 

The Real, Measurable Value of a Strong Brand 

It’s easy to dismiss brand equity as merely an “idea”, but data tells another story. Interbrand’s 2023 “Best Global Brands” report estimates that the world’s top 100 brands collectively hold over $3 trillion in brand value- a massive figure that demonstrates how brand perception can substantially impact an organizations value, perceived and otherwise. 

• Consumer Trust: A Harris study found that 82% of shoppers want a brand’s values to align with their own and those brand values will impact their likelihood to remain with the brand. 

• Price Premium: Harvard Business Review has published multiple analyses indicating that businesses with a strong brand and high customer satisfaction can charge a notable premium—often cited in the range of 10% to 25%, depending on the industry. 

If we take those data points and apply them to nonprofits we can easily see that a donor is likely to donate more often and donate a higher amount (perhaps even becoming a major donor) when that reputable local brand aligns with their own image and values. 

Local Ties: A Powerful Piece of the Puzzle 

For many businesses, being “local” is a critical piece of their brand’s identity. Whether you’re a hometown bakery known for fresh croissants or an independent retailer offering personalized service, local loyalty can be a differentiator that large national organizations can’t easily replicate. 

• Community Connection: Over half (54%) of U.S. consumers say they prefer to buy from local stores rather than national chains whenever possible, according to a 2019 Forbes study. 

• Word-of-Mouth Influence: Local word-of-mouth recommendations remain powerful. A study by BrightLocal found that 77% of consumers say they regularly read local business reviews before spending money. 

The most important takeaway is that a brand - be it local, regional, or national- has value that it has built through countless interactions, investments, and experiences. 

The Dangers of Giving Away Your Brand Equity 

Despite its value, some organizations inadvertently dilute or relinquish their brand equity. This can happen when a smaller entity merges with, is acquired by, or heavily co-brands with a larger or more recognized name- resulting in the smaller brand’s identity fading away. While there may be short-term benefits (like exposure or resources), the long-term costs can be steep: 

1. Lost Recognition and Loyalty: If customers no longer recognize your brand because it’s overshadowed by a partner or new parent organization, you risk losing the loyalty you’ve cultivated.   

2. Reduced Differentiation: One major advantage of a strong brand is differentiation. Blurring your unique brand identity can make you appear generic, leading potential consumers, or donors, to look elsewhere.   

3. Decreased Revenue Potential: Giving away brand equity can weaken your ability to charge a premium or negotiate better deals with sponsors or underwriters.

4. Eroded Goodwill: The emotional connection with your audience may diminish. Ultimately brands that fail to maintain authenticity lose customer trust at a faster rate than those perceived as stable and consistent. 

Protecting Your Brand Equity 

Rather than surrendering your brand’s hard-earned value, here are a few ways to guard and leverage it: 

1. Audit Your Brand Regularly 

   Conduct periodic brand audits to assess public perception, marketing effectiveness, and overall brand health. This helps you stay aware of what your brand stands for and how it’s perceived. 

2. Maintain Core Brand Elements 

   Consistency is key. Keep your visual identity, messaging, and brand values at the forefront, even when exploring partnerships or expansions. 

3. Communicate Your Brand Story 

   Share the history, culture, and mission behind your business. Donors connect with authenticity, and storytelling is one of the best ways to remind them why your local brand is unique. 

4. Selective Collaborations 

   If you decide to partner with a bigger brand, ensure that the arrangement preserves your core branding. Negotiate contracts that specify how your logo, messaging, and identity will remain distinct. 

5. Leverage Local 

   If part of your brand’s identity includes serving a specific community, continue to reinforce this link. Sponsor community events, engage in local collaborations, and publicize how your brand contributes to local causes. 

Communication: The Core of Branding Success 

If you should decide to change or update a brand, communication becomes the linchpin of a successful transition. Organizations must ensure their super fans – their most loyal and engaged supporters – are brought along on the journey. It’s no different than informing your family when you’re moving: keeping them in the loop builds trust and strengthens the bond. 

Importantly, communication about brand changes should not begin or end with fundraising pieces. Fundraising materials should be the last place where a brand transition manifests. The best branding practices ensure donors are familiar and comfortable with the updated brand well before they are asked for money. The order matters: first, engage and "sell" the brand changes through storytelling, updates, and meaningful conversations. 

Conclusion: Your Brand Is Your Greatest Asset- Guard It 

Brand equity isn’t just a buzzword; it’s a tangible asset with real financial, reputational, and emotional implications for your organization. From generating higher donation amounts to driving loyal donor relationships, a strong brand can act as a shield in competitive fundraising markets and a magnet for organizational growth opportunities. 

The key is understanding that brand equity, once lost or diluted, isn’t easily regained. Whether your brand story is rooted in local community ties or focuses quality, honor the value you’ve built. Resist the temptation to sacrifice it for short-term gains. By safeguarding your brand equity, you’ll ensure your organization continues to thrive for years to come.