News & Views

A blog for those interested in what affects, motivates and drives the New York City Nonprofit Sector — written by CRE’s crackerjack consulting team. We hope you use this space to share your thoughts, ask questions and engage in conversations about our city, social justice and the nonprofit sector.

Does Competition Make Sense for Nonprofits?

by Louisa Hackett - In the for-profit sector, competition is touted as the means for creating efficient and effective organizations. 

Consistently worrying about and addressing what other companies are producing, what prices they are charging and how they are attracting customers, keeps a company on their toes.  In theory, competition spurs the creation of the next, best, most cost effective product desired by consumers.  Without addressing whether this theory works in practice, there is enormous pressure on nonprofits to adapt more business-like ways.  And, even more influential is the funding environment which encourages a competitive, not collaborative approach among nonprofit organizations.

Yet, is competition really the best way for an organization to achieve its mission?  The positives of competition include a large number of proposals for funders to choose among for funding.  Competing for funding also forces nonprofits to think about how their program is unique and better than the one down the block.  But this competition also encourages proposals that promise to save the world at a rock bottom low cost.  Does this approach really serve the community or make for effective programs?

CRE recently worked with the Lower Manhattan Arts Leaders a collaborative of theatre, dance and arts organizations which joined together to make each other stronger.  Rather than buying into the thinking that arts groups are all competing for the same funding, patrons and ticket buyers, the Executive Directors recognized that working together to help make each other better is ultimately good for all the groups.  It is a bit like the recognition that the big, vibrant Broadway Theatre District helps the theatre business in general.  Having many successful arts organizations will help to create a more vibrant downtown arts district.

In a similar manner, nonprofits devoted to strengthening their local community and helping residents out of poverty will be more likely to succeed if they recognize other organizations with a similar mission are their potential collaborators not their competitors.  One organization alone cannot change a neighborhood or address the root causes of the issues they are formed to address.  But working together, for example, to provide coordinated, integrated services for youth and families or partnering to develop affordable housing that actually trains and employs current residents in construction has a better chance of succeeding than one stand-alone organization.

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