Marketing and management framework to create sustainable healthcare sector non-profit organisations in South Africa

Abstract

Poverty gaps and poor living conditions in developing countries have led to an increasing need for social support. Owing to this, there is a growing number of new players in the non-profit organisation (NPO) sector, which has given rise to intense competition for donor funding. More so, the global economic crisis of 2008 resulted in reduction and uncertainty in funding and philanthropic income. The environment in which NPOs operate is no longer favourable especially considering the intense competition for donations. Thus, sustainability has emerged to be a critical issue for these organisations, as they have to sustain a long-term, perpetual need with limited funding. In response to this, many scholars have concluded that adopting marketing strategies, and business-oriented methods and practices, can contribute and enable these organisations to achieve sustainability. Even though some NPOs have moved towards adopting these strategies, sustainability remains a challenge for them. The reason for this could be that NPOs are not utilising marketing and management strategies as widely as they should be. This prompted the following research question: To what extent do healthcare sector NPOs employ marketing and management strategies in their operations? In order to address this question, a combination of techniques was adopted which included literature review, in-depth interviews, focus groups discussion, and thematic and content analysis. Some say that the lack of adoption of marketing strategies and business-oriented methods is mainly due to a lack of understanding of the benefits of marketing and the perception that marketing is only for the for-profit sector. This incited the question of what should be the impact of including marketing strategies on growth and sustainability of healthcare sector NPOs in South Africa? In the literature review, evidence was presented that NPOs are of significant value to any economy they serve, they aid in addressing inequality gaps, and they provide services that cannot be provided by the state to disadvantaged communities and individuals. In light of the value-add NPOs bring, it is imperative for these organisations to operate for the long-term. This could be achieved through the adoption of marketing and business-like approaches as noted in previous studies, however, this is not the case as these organisations are faced with funding challenges and intense competition. This elevated the question: How should the challenges to the current NPOs marketing efforts be addressed? This study utilised the qualitative method. Qualitative methods were considered the most applicable for this study because they help the researcher to gain deeper insights into the research problem through interactions with the study participants. The study finds that the inability to adopt business-oriented methods in NPOs is owing to a lack of skills and expertise, lack of knowledge of how to approach marketing and the high dependence on donor funding. The respondents concur that the high dependence on donor funding has resulted in a lack of independence on how to utilise the funds. According to the literature, due to a high dependence on donor funding, the design of NPOs’ projects is usually framed to suit donor requirements and within the budget line items that are acceptable to the donor; essentially donors require their funds to be used only for charitable activities they are interested in. This raised a question: What should be the main funding streams for NPOs in the healthcare sector in South Africa? In response to the literature, research questions and the study findings, a framework was developed which could provide NPOs with the basic understanding of how to adapt marketing and management strategies for sustainability; where the process should start, what it should involve, what are the outcomes thereof and the benefits to NPOs. This then overall answers the question of how marketing and management strategies should be effectively deployed to achieve NPO sustainability.