(ripped from an actual e-mail to client…)
To recap this specific issue:
Acronyms are overplayed and are (best) effective when used in highly impactful names/brands/organizations with brand equity (or other significance) built around them: IRS, CIA, USPS, UPS, FBI, etc.
Hospitals and lesser-known government agencies use acronyms/initial as shorthand to those “insiders” who know/deal with on some level (stakeholders) the organization regularly—as would politicians, board members and specific members of the community. This can work, but these entities are still very much less well known, particularly if they do not commit to the task of branding (i.e. putting money into the effort to own an acronym).
Who knew what FEMA was before 2005? … And if there is a FEMA, why is there then a MEMA (Maryland)? (Random thought)
Most importantly, when members of a particular community are unknown and the brand recognition amongst them is low, it may stand to reason that the primary usage of an acronym positions an organization distances the general public from the significance of the organization, since the name is less focused on intrinsic recognition with the public.
For example: <strong>ABC Rentals vs. Plumbing Supply Rentals.</strong> (Which name gives a sense — at a glance — of what the company’s primarily positioned to do for the prospective customer?) In this vein, one could say that using acronyms is a nickname of sorts and the public gives the most effective nicknames: FedEx (shortening of the proper name Federal Express—and rebranded as such afterwards because of the saturation with a specific position—overnight package service).