Can your charity brand help you to generate more income? Mathew Little investigates

At first glance, the league table published in January by consultancy Intangible Business just seemed to confirm the well-established pecking order in the charity sector. Cancer Research UK led the way, followed by the National Trust and Oxfam. But on closer inspection there were some anomalies. The RNLI, one of the country's largest charities, was back in 20th place and the NSPCC could only muster a lowly 15th position. Greenpeace and the Samaritans weren't even included.

The table wasn't ranking charities by their fundraising income or assets but by something far more slippery - brand value. A familiar concept in the commercial world - many companies include their brand value in their accounts - the idea has yet to take hold among not-for-profits. But Intangible Business, a brand value consultancy, was adamant that, although the criteria were different, the value of a charity brand could be measured.

The calculations were based on a brand's ability to generate future income. Hard measures were included, such as reliance on donated income, levels of trading, and the number of supporters or volunteers, as well as more subjective measures, such as prompted and spontaneous awareness of the brand, web presence and the brand's cultural longevity and embeddedness. But, while the revelation that Cancer Research UK's brand is worth £209m and the National Autistic Society's only scores £4.7m might be mildly diverting, does it really matter or have any practical applications?

According to Thayne Forbes, director of Intangible Business, the answer is yes and it could have implications for a charity's effectiveness. Charities that leverage their brands more effectively through, for example, licensing their brand for use on consumer products, could generate significant extra income. And knowing what your brand is worth is an important part of that process.

‘The way brand value works is to look at what future income the brand will generate,' he says. ‘It also makes you look at what the brand stands for and what it is bringing to the proposition from a charity's point of view. It's important because, if a brand is capable of generating £50m income a year, then it's going to do more effective charitable work than another charitable brand in the same sector that generates far less.'

Valuing your brand
Breast Cancer Care has attempted to estimate the value of its brand. Director of finance and resources, Rohan Hewavisenti, says that brand value is something that charities ignore at their peril. ‘Because it's not valued and you don't have a price tag on it, it can get neglected,' he says. ‘I think the brand is the biggest asset for many charities, but at the moment it doesn't fit on the balance sheet because of accounting regulations.'

The charity did not use an external consultancy but made its own calculation, based on an analysis of future income. Hewavisenti will not give a figure beyond a ‘multiple of between five and twenty times' annual income. But he says that an awareness of the financial value of its brand has helped Breast Cancer Care negotiate deals for the licensing of its name and logo in cause-related marketing (CRM) partnerships with companies.

‘Knowing the value of your brand can help you set a minimum of what you'd expect to receive from these deals,' he advises. Breast Cancer Care's biggest partnerships are with Asda, Boots and Dorothy Perkins - all do a combination of CRM, plus employee and company fundraising. But at present, he believes, financial naivety means that many charities are underselling their brand through a lack of understanding of its value to corporate suitors.

‘It's tempting to think that, if you are helping to sell a product, £20,000 or £30,000 is a nice return, but that is forgetting that the company is getting increased sales from the partnership,' he says. ‘What you ideally want is a share of the increased profits. There is a tendency to think of it as like a donation but actually it's far more commercial, because companies use charities to help them get distribution for retail products.'

And if arriving at a financial figure for your charity's brand proves impossible, that doesn't mean you should discount the brand's worth. The charity Living Streets recently rebranded its ‘Walk to School' campaign, which had been running for 10 years, and, by the organisation's own admission, was in danger of going stale. A partnership with consultancy Felton Communications resulted in the creation of a new Strider ‘superhero' logo. The charity believes its brand is potentially far more valuable now - both to public sector and corporate partners. The new logo has been trademarked and Living Streets is preparing to talk to interested parties.

Affinity partnerships
But not all charities have found the process of brand valuation useful. Two years ago, the Scout Association used the consultancy Interbrand to analyse its trading brand, Outdoors, but concluded that the value of the brand could not be expressed in crude financial terms. ‘It was difficult to put a monetary value on a voluntary brand,' says director of marketing John Palmer. ‘We just realised it was a pointless exercise. We are never going to go and sell our brand on the market. A voluntary brand is not the same thing as a cornflakes brand. People waste a lot of time trying to put a value on products'.

The Scout Association, one of the most trusted and well-known brands in the charity sector, has a number of multi-layered partnerships with companies such as Millets and Sainsbury's, involving affinity relationships, sponsoring and fundraising. But each relationship involves unique considerations, according to Palmer.

‘None of the commercial deals we've done over the past two years - and we've done partnerships worth over a million pounds - none of them are based purely on the value of the brand,' he says. More relevant than brand value, to Palmer and his negotiating team, is the concept of ‘brand uplift' - whether either the charity or the company in a relationship anticipates it will get a boost from the association. ‘A lot of it is down to how much we want the association, compared to how much the company wants it.'

To others in the voluntary sector, the concept of brand value is not only futile, but a crude and unwelcome intrusion from the commercial world. Joe Saxton, founder of sector think-tank nfpSynergy, regards attempts to place a monetary value on charity brands as ‘muddle-headed'. ‘You value a company because you want to buy or sell it and you want to know what your assets are, or put it on a balance sheet,' he says. ‘The equivalent of valuing a brand for a charity, should be nothing to do with how much money it is worth, but to do with how many lives it has changed, how many people it helps, and whether it is doing the job it is there to do.'

Saxton accepts that corporate fundraisers may well need to quantify their charity's worth to a potential corporate partner through the numbers of supporters it has or recognition among the general public. ‘You can create something but to imply that it is value of the organisation is the jump,' he says. ‘You may want to put together a bunch of things that say why you are such a valuable corporate partner but to put them together and then say we are worth 52 million quid doesn't stack up.'

A real evaluation of a charity's contribution to society, however, would be an exercise worth undertaking, according to Saxton. ‘The true value of a charity brand should be to do with how many people it reaches and the quality of its services,' he says. ‘If people can say we are doing a better job this year than last year, and that's something we can measure, that's really useful. It's absolutely gold. But most people are just getting sidetracked into calculating a commercially driven price for the brand.'

How to maximise your brand
Some charities and consultants believe valuing your brand can help you get a better deal in corporate partnerships. But even if you don't assign a financial value to your brand, you should be aware of its worth - companies gain increased sales from associating with a charity in a cause-related marketing deal. Below are some issues to consider:

If you license your logo or ‘lend' your brand to a company, make sure any fundraising or PR costs you incur are underwritten in the agreement. So if the partnership flops, you don't lose money.

• Talk to other charities about what they ‘charge' companies to use their brand.
• If you have a logo that encapsulates your brand, consider trademarking it.
• Don't tie yourself down to one long-term partnership: your brand may be attractive to many different companies or even public sector bodies.
• Review whether asking for a share of the profits could generate more income than accepting a lump sum donation.