News analysis: What is your brand actually worth?

A new league table of charity brands shows how significant branding has become, writes Stephen Cook.

One of the annual highlights of the corporate world is the publication of the top 100 brands, usually topped by Coca-Cola, and the modern obsession with league tables meant it was only a matter of time before something similar happened in the field of charities.

Sure enough, just before Christmas, the brand valuation company Intangible Business published for the first time a league table of the top 100 charity brands, based on the work it has done for charities in recent years. The top ten are listed here.

The table does more than gauge how well known individual charities are - it gives 2005 financial values to their brands, assessing how these values have changed since the previous year and relating them to the size of their incomes.

So it shows, for example, that the value of the Barnardo's brand is deemed to have increased by 29 per cent in the past year, and that the RSPCA is sixth equal in the branding table even though it is only 31st in the income league.

An element of subjectivity

But how reliable are the calculations used to produce the table, and how seriously are charities likely to take it? The answers seem to be 'reasonably reliable' and 'quite seriously'.

William Grobel, a consultant at Intangible Business, says the valuations came from the 'relief from royalty' method - a calculation of how much an organisation would have to pay to use its brand if it didn't already own it.

The calculation involves combining market research on charities with assessments of their media coverage, web presence and likely future income.

"There's an element of subjectivity, but it's eliminated as much as possible," says Grobel.

He argues that charities generally fail to realise how widely their brands are recognised, and how much they are worth, especially when licensed for use by companies trying to cater for the growing number of 'ethical consumers'.

Charities allowing their names to be linked with appropriate products - birdseed or cans of paint, for example - can obtain as much as 10 per cent of the sale price, he says, while an underperforming charity that leverages its brand more effectively could increase its income by anything up to 20 per cent.

"I think a lot of charities recognise that they have to act more commercially," Grobel says. "They're competing not only with other charities, but also with other products and services - the RSPCA is up against other animal groups, but also has to compete with trips to the zoo or watching DVDs."

Clare McKitrick, head of strategic communications at Mencap, believes the methodology used for the table was reasonable, given that it is difficult to get charities to reveal what they spend on branding and marketing.

Mencap comes 38th in the table despite having the 14th largest income, but McKitrick points out that most of its income is from service delivery and that contracting bodies take less account of branding than of previous performance.

By contrast, St John Ambulance has the 45th largest income but a brand that, with a value of £50.3m, comes 17th. Richard Fernandez, the charity's communications manager, says this is probably because of its high visibility at incidents such as last July's London bombings.

"The table is certainly interesting and will cause a debate," he says.

"The valuations are big numbers and it's important to manage them well. I suppose it's a call to arms for us - and many people in the sector - to do better."

Andy Milligan, a director of leading consultancy Interbrand, puts it more strongly. "A charity's brand is directly linked to how much money it will get as it competes for a share of people's minds and wallets," he says. "They have to work hard on it because the alternative is a slow and lingering death."

The dangers of corporatism

But Mencap's McKitrick points out that there is a tension in most charities about how much to invest in branding. "I think all charities would like to connect with a wider range of supporters," she says. "But it would be a shame if their position in tables such as this became their only focus.

"I would be concerned if they were competing with each other for the highest brand profile and losing their focus on the people they are there to support.

"We need to raise our profile and generate support, but not in a way that would be seen by our supporters as wasteful. There's a danger that the public might perceive us as becoming too corporate, which could turn them away. People want us to use money wisely, and we want to respect that."

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