Beat Them or Join Them-A Challenge for a Not-for-Profit

Kirsch CPA Group

Mar 18, 2020

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Do you pay close attention to what your main competitors in the not-for-profit field are up to?

It only makes sense to keep tabs on the organizations that are competing with you for donation dollars. In some cases, your group’s survival may depend on it.

On the other hand, you may initiate arrangements to work alongside some of your Not-for-Profit competitors. These collaborative efforts may produce mutually beneficial results for multiple organizations and lead to other group ventures.

It’s a tricky situation and not-for-profit managers are often torn between blazing your own trail or joining up with others. You may do just a little of one, a lot of another or both. Let’s take a closer look at the main issues.


The Case for Competition between Not-for-Profit

Before you get to know other groups better, know your own organization. If you have a complete understanding of your not-for-profit’s mission, you can focus on its goals. It’s especially important to carve out a niche in a crowded field and develop your own brand.

The not-for-profit sector is saturated with all kinds of organizations and with so many options available, the overlap is inevitable. Significantly, there are only so many donor dollars to go around and recent tax law changes have effectively reduced incentives for some to contribute. This fosters an even more competitive environment.

Once you have a firm grip on internal matters, you can turn to monitor other organizations and analyzing the results. Be aware, the competition you’re facing may be direct or indirect.

1. Direct competition.

    Others might have similar missions and thus target many of the same individuals. This can make it difficult to convince donors to contribute to your cause. So, it’s imperative to be vigilant.

“We definitely keep an eye on what everyone else is doing,” says Lisa Berry, Managing Director of External Relations at the Alexandria, Virginia-based Prevent Cancer Foundation. “Right now, we have a big campaign about viruses and cancer, so we are constantly checking out what other groups are doing with this topic in particular. We get emails from other organizations and check out their websites.”

“I would say the biggest ‘competition’ comes on the development side of things,” noted Berry. “Everyone is fighting for a larger slice of the pie and the pie doesn’t seem to get any bigger.”

2. Indirect competition. Although it’s typically not as evident, all not-for-profits are essentially competing, whether they like to admit it or not. Their missions may differ — perhaps even drastically — but they all vie for the public’s attention in one form or another.

Donors generally aren’t the direct beneficiaries of the support they willingly provide. Not-for-profits must remember this fact and build on the concept that these individuals are giving up resources, and sometimes their time, to help others. Competition exists because all groups in the sector are asking the same people for donations of other support.


The Case for Collaboration

Monitoring and analyzing the competition can reveal opportunities for collaboration. But you must decide if this is a road you want to go down. It’s a challenge to share with other groups without diluting your own brand.

In some instances, however, Not-for-Profit organizations that initially appear to be competitors, at least on the surface, turn into prospective partners upon further investigation. This may be due to significant differences in the population served, the services being offered or geographic limitations. Given the immense reservoir of potential donors, developing fruitful partnerships can help sustain and grow your organization.

Among the potential benefits of collaboration are:

  • Saving costs through shared expenses and overhead,
  • Strengthening existing programs,
  • Expanding the reach of your organization,
  • Improving efficiency and productivity,
  • Promoting leadership qualities, and
  • Gaining access to special talent and skills.

Not only might you consider collaboration, as opposed to competition, but this may also create advantages normally outside the scope of your organization. For example, other organizations might have access to resources, supplies or connections you don’t have. And you may possess attributes these partners are lacking, making a collaborative effort logical.

Berry says this is common for the Prevent Cancer Foundation. “We do collaborate in many ways,” she says. “Our community grants program funds projects across the country that are often through other non-profits — they are usually small, very local and focused on underserved communities. There are a lot of ’roundtables’ and national coalitions where we work with other groups.”


Room for Other Not-for-Profit Organizations

Michele Robinson, Director of External Relations at the Newark Conservancy in Newark, New Jersey, echoes this general sentiment. “There are a few local organizations that do what we do or similar. I guess they could be considered ‘competition,’ especially when it comes to granting funding, but we also feel there is room for other organizations because there is so much work to be done, especially here in the city of Newark.”

“We don’t ‘monitor’ them per se, however, we do have working relationships with many of them so we get their e-blasts, check out their websites occasionally, or even have personal relationships with some of their leaders,” adds Robinson. “We often partner and collaborate with organizations that do similar work, and some who offer other services. For many grants, this is a requirement.”

While the benefits can be plentiful, as you might imagine, things don’t always go smoothly when organizations work together. Typically, there are hurdles to overcome.

For starters, the organizations involved must independently arrive at the point where they are seeking out partners. There’s a lot of pride and passion in the field. Not everyone will agree on what should be done and how to do it. When several organizations join together for group activities, they may disagree on the goals to be attained. Cooperation could be lacking, especially if someone believes you are invading their turf.


Keep Your Options Open

While you should be cognizant of what your competition is doing, investigate the opportunities for sharing the wealth. To be on the safe side, you may just want to dip your toes into the water at first. Depending on the results, determine whether further collaboration makes sense for your Not-for-Profit organization.

About The Author

Kirsch CPA Group is a full service CPA and business advisory firm helping businesses and organizations with accounting,…

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