Habitat for Humanity International: Brand Valuation

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Furthermore, Interbrand negates an accurate allowance of future cash flow in the model. Interbrand defines “brand” as “a relationship that secures future earnings by retaining customer loyalty.” (11). However, assessing only relationships with “customers” does not fully value the network of loyal stakeholders possessed by a well-respected NPO like HFHI which could be a source of future funding, i.e. donors, volunteers, served families, other NPOs, governmental agencies, media outlets. Basically, the model ignores the strength of the brand, its reputation, but not taking into account HFHI’s strong brand equity - its 69% aided awareness - which is instrumental for its fundraising efforts.

Should NPOs value their brands? What are the risks and benefits of valuing a NPO brand like HFHI?

NPO’s should determine if valuing the brand is useful based on their own specific circumstances, i.e. seeking co-branding or special partnerships that need to monetize the value of the association. In many cases, valuing the brand can be detrimental in a service or arts sector because their measurable benefits are not as easily defined. In these cases, valuing the brand in an economic sense may actually undercut the mission. In many cases though, knowing brand value can help with budgeting fair values for brand logo and association with third-parties. Many non-profits mishandle their brand and do not value it as an asset like for-profit entities do. In HFHI’s case, losing control of its brand identify and having it associated with businesses and missions that do not align to their specific missions, will ultimate sabotage the strength of the brand’s reputation.

What actions should HFHI take to protect and leverage its brand value?

Option 1: Narrow mission to focus on housing in the United States, defining the brand as “ecumenical” rather than “Christian.” Spin-off international affiliates in areas that are sensitive to Christian affiliation i.e. Middle East, Africa, to operate under another brand. HFHI would focus its mission statement on housing efforts in the United States and curtail its international efforts - not expanding into disaster relief. The brand would reframe its internal and external messaging as ecumenical, open and welcoming to people of all walks of life. Partnering organizations would not be required to share HFHI’s Christian worldview, but would need to tolerate its mission. The organization would attempt to continue partnering with large, high-profile US corporate partners. By focusing on the Unites States and defining the brand, HFHI could leverage these new partnerships to make a much larger impact within the United States market. The advantage of this plan is that the mission would be much more focused - matching the existing bulk of HFHI’s operations and key stakeholder desires. As over 90% of funding comes from the U.S., this focus deliver on key drivers - tangible, local results - expanding future funding and partnerships (Exhibit 14). Spinning off international affiliates underneath a new brand name opens opportunities for furthering the mission in environments that would otherwise be unwelcoming to Habitat for Humanity assistance. However, this plan has several disadvantages. International housing can be less expensive to construct, so fewer houses would be built. Further, emergency housing revenues would be foregone. This plan will also require a change of the scope of the mission and potentially cause collateral damage when separating international offices.

Option 2: Keep the reframing from Option 1, but de-emphasize religion even more. Focus on worldwide housing efforts through international partnerships, turning towards the greater funding potential of international corporations, secular NPOs and government consortiums rather than religious institutions. In this scenario, HFHI embraces its desire to end homelessness worldwide and accepts that its Christian identity presents brand and operational barriers internationally. Habitat could then attempt to partner with international corporations and secular international entities such as the U.N. Through these partnership, HFHI could dramatically increase its international construction efforts. Advantages include increased political and social cooperation abroad, which could lead to a significant expansion in the organizational goals to house 1M people. Disadvantages would be that HFHI would turn its back on its heritage and alienate its traditional stakeholders of Christian churches and religiously-motivated donors. This could lead to staff disappointment. However, this would be softened by opening a call to all faiths and backgrounds - Christian and non-Christian alike.

Exhibit 1: HFHI SWOT Analysis

Strengths:

- Aggressive growth building homes and communities efficiently, with 133,000 homes, over 650,000 partners, 3000 communities, and 87 countries in less than 30 years.

- Perceived as the leader in eliminating poverty housing in the U.S.

- Attracting $682M of funding from traditional partners, volunteers, corporate partners and sponsors (pg. 6, 10)

- Strong management and willingness to recruit a diverse array of talent from the for-profit world

- Strong, emotional appeal to certain key stakeholders on religious core i.e. volunteers, churches, other Christian NGOs, etc.

- Effective organizational structure ensuring affiliates are trained, funded and equipped with HFHI’s operational best practices

- Strong brand awareness with aided awareness at 69% and unaided brand recognition doubling from 4% in 1996 to 8% in 2002

Weaknesses:

- Lack of mission and growth alignment in selecting future future partnerships and program opportunities (pg.13)

- Lack of mechanisms in place for brand evaluation, stewardship and management with corporate brands and affiliates.

- Failure to scale the partnership housing concept and even prospective homeowners - in various regions i.e. Central Asia and Eastern Europe (pg.5)

- Managing the various branding issues and proof of concept for the expanding number of affiliates worldwide e.g. Christian identity in Muslim countries, Only 17% of UK survey participants perceive HFHI as a “good idea” (pg.5, 7)

- Difficulty maintaining competent staff in regional offices.