How Competitive Advantage Translates to Nonprofit Strategy

Identifying — and using — a competitive advantage is not about “winning” against other nonprofits in the field. It is a strength-based approach to strategy development, ensuring that your organization puts its best foot forward on behalf of its mission and those it exists to serve. This post draws from real examples to show how strategy can be about leveraging or deepening an existing competitive advantage, creating one where none could be identified, or combining strengths with another organization to further mutual goals.

Identifying a competitive advantage is one of the distinguishing elements of our Real-Time Strategic Planning approach to strategy development. We see the two as working hand-in-hand, defining nonprofit strategy as “a coordinated set of actions designed to create and sustain a competitive advantage in achieving a nonprofit’s mission.” When working with clients on strategy development, we always help them identify their competitive advantage (i.e. strengths that differentiate them from others) and challenge their thinking to ensure that their competitive advantage truly sets them apart. We then build strategy around that strength, focusing on decisions that allow them to leverage their greatest advantages. But what does this look like in practice?

To show how competitive advantage frames strategic decisions and informs organizational strategy, we’ve gathered a few examples from our experiences with a variety of nonprofits.

Doubling Down on an Existing Advantage
A community health care organization exclusively serving homeless people recognized its unique advantage as:

• A philosophy of care using an integrated model that is person-centered, and that emphasizes trauma-informed and harm-reduction services

In lay terms, this organization differentiated itself by being able to work with clients who had the hardest-to-meet needs. This group developed a three-part strategy to capitalize on this advantage to grow its impact by ensuring high-quality services and operations, reaching more and new clients, and expanding its capacity to advocate for person-centered, community-wide solutions to homelessness.

Taking an Advantage to a Deeper Level
A regional nonprofit network serving 50 civic engagement organizations had a demonstrated advantage in:

• Effectively maintaining a long-term coalition of members

As anyone working in advocacy knows, maintaining links across groups advocating for their diverse needs can be difficult, and our client’s ability to hold the coalition together for information sharing and cross-learning outside of a single shared project was unmatched by others. By adopting a revised mission statement and organizational strategy that explicitly put equity at the center of its work, it intentionally defined its role and elevated the purpose of its network partners to supporting the agendas of diverse constituencies.

Leveraging Compound Advantages
An organization serving women impacted by breast cancer identified a dual competitive advantage:

• Being able to maintain a community of women caring for women in a non-clinical setting
• Providing volunteer opportunities for survivors to “give back”

The strategy it developed leverages both of these elements, launching a survivorship program to build on the trust they’d developed in the community of women in treatment for breast cancer and tapping into the volunteer capacity that had resulted from this work.

Creating a New Competitive Advantage
An organization providing treatment to children and youth affected by trauma confronted the realization — identified during the strategy development process — that it had no competitive advantage effectively distinguishing it from the many other groups working in the same space. In response, it crafted a strategy to create a competitive advantage around a “superior service model” that could be implemented across its entire range of programs, evaluated to prove its greater effectiveness, and then leveraged to drive policy change.

Combining Competitive Advantages
A small nonprofit with a research-proven, volunteer-based literacy program that distinguished it in the field joined forces with a large national network with unparalleled access to volunteers. By working together, the smaller organization expanded its reach dramatically and the larger organization created new purpose and satisfaction among its volunteer base.

Similarly, another organization with a competitive advantage in providing proven literacy interventions found that it could expand the program by working with a national network of youth-serving organizations. This partnership allowed the smaller organization to scale its work more quickly to reach more students and enabled the network to bring a high-quality program to the communities it served, furthering academic achievement.

As illustrated in these examples, strategy can be about leveraging or deepening an existing competitive advantage, creating one where none could be identified, or combining strengths with another organization to further mutual goals.

Identifying — and using — a competitive advantage is not about “winning” against other nonprofits in the field. It is a strength-based approach to strategy development, ensuring that your organization puts its best foot forward on behalf of its mission and those it exists to serve.

What is your organization’s competitive advantage? And how is your strategy aligned to make the most of it?

Read more about competitive advantage and the five Principles of Strategy Development.