Your Nonprofit Is In Competition

When we talk about collaboration in the nonprofit sector, ears perk up. Funders get a sparkle in their eye, eager to make the most of their grant dollars and see “collective impact” be made in the process. Nonprofit executives and board members hasten to tell us of the many congenial relationships they have with community partners. And the field sits back, as though with a warm cup of milk, ready to be told another story of what can happen when nonprofits work together — complete with a happy ending.

But when we roll out the term “competition,” the scene changes entirely. Cue the averted gazes, the uncomfortable silences, or the confident soul who stands up and declares “we don’t think of anybody as competitors,” as though it were a dirty word. Granted, there are exceptions as more nonprofits begin to make peace with the idea that the nonprofit sector is, in fact, a competitive environment. But after almost ten years of helping nonprofits develop strategy, it still surprises me how often the notion of competition still meets with resistance.

The fact is, nonprofits are in competition on numerous fronts — and on an ongoing basis, not just at grant time. Competition is most obvious with your direct competitors, those organizations that provide similar services to similar populations in your geographic region. Because there is often more need than there is capacity to meet it, such competition may not be keenly felt. But consider this: competition also exists among your nonprofit and an array of resource competitors, which include every other organization seeking grants from the same foundations, contributions from the same donors, visibility in the same media, etc. In a sector concerned with making best used of precious resources, this type of competition should be a core concern. Finally, your organization may well be contending with an increasing number of substitutable competitors, which offer alternative solutions to the problems you are trying to address with your programs and services. As more for-profit and hybrid organizations enter the spaces once served only by nonprofits, the sector is seeing this type of competition take on a whole new aspect.

As beneficial as it has been for nonprofits and foundations to embrace collaboration, it has also made it difficult for the sector to have open conversations about competition. Having been lifted up as a preferred strategy, collaboration is now almost seen as a virtue in itself rather than as a means to an end. And if collaboration is a virtue…well, its flip-side — competition — must be a vice, right? Wrong. Instead, we have to consider both as strategies, and to judge their relative virtue by how they enable a nonprofit to achieve its social mission.

Nonprofits across the sector are proving the value of working with other players to achieve in concert what none could achieve independently, but it is equally important that organizations view their work through a competitive lens, to ask themselves: Are we the best ones to do this job? And if we’re not, how do we get there? (or even) Should we cede ground to the one that is?

After all, nonprofit competition isn’t about one organization “winning” over the other; it is about making sure that the community wins by ensuring the best programs are being delivered in the most effective and efficient ways.

To read more on competitive strategy in the social sector, click here.