“Leap, and the net will appear.” – John Burroughs
Decision making in nonprofits often reminds me of the above quote. Sometimes such decision making leads to incredible innovation, valuable risk taking and/or productive experimentation. But all too often, such behavior takes a much different form: well-intentioned community members haphazardly forming a nonprofit to meet a need they see in the community and opening their new organization’s doors with little (or no) planning or research on their “target market.”
Truth be told, most nonprofits don’t even think about terms like “target market” – or consumer demand or promotional tactics or market trends. Sure, these concepts can sometimes be nothing more than jargon. But they can also drive organizational performance and, ultimately, greater social outcomes. One of the most powerful of these concepts is “competition,” which Billy highlighted in his last blog post.
The capitalist view of competition is that it drives out inefficient producers: Those companies that can produce more at a lower cost are going to be more attractive to consumers (who will feel the benefit in their wallets). This generates incentives for creating products that offer more and more value to consumers while costing producers less and less to produce.
Can you imagine a world in which nonprofits were producing social outcomes of greater and greater value while spending less and less to produce them?
Yet, “competition” is still a naughty word in the social sector. Instead we preach collaboration collaboration, collaboration. The mantra in the nonprofit sector has become: “if a number of organizations are all working on similar issues, then the organizations should collaborate and work together more” (whether in the form of a formal merger or an informal partnership).
Collaboration can be exceptionally impactful if executed well and in the right circumstances, but the stark reality is that collaboration is not easy. Aligning different programs, let alone cultures, is time and resource intensive. And redirecting these resources towards facilitating collaboration often means that the people being served are not having their needs met.
Perhaps collaboration isn’t always the best choice. Perhaps – in some cases – we need fewer, more effective nonprofits?
There. I said it.
This is exactly where competition has an important role to play. If organizations took the time to understand the strengths and weaknesses of other organizations in their communities addressing the same social problem, they could better understand their market, their own competitive advantage, and the value that they offer. Not only would they be better able to tell their story – and set themselves apart from the pack – but it would also allow them to consider how they need to tweak their program to best meet the needs of their constituents and their community.
Better programming means better results means stronger ability to capture the attention of funders. Over time, funders trend towards supporting those organizations that they know are being effective and making an impact. The organizations that aren’t thinking about their competitive advantage or their market or their “consumers” will eventually lose out. And, eventually, will have to close their doors.
Such a world can seem quite scary and competition can makes us quite nervous.
But it keeps us on our toes. It ensures that we’re providing the best service as efficiently and effectively as possible, and that we are creating social outcomes with the greatest possible value for our communities. That’s not so scary, is it?