Friendly Collaborations

Your nonprofit will realize may benefits from collaborating with nonprofits of all types, especially at the board level.

Think about your nonprofit and its fiercest competitor. You probably compete for donors, clients, volunteers, referral sources, staff, and advocates. However, it is doubtful that you compete in other areas such as accounting, HR, policy, and payroll. What you pay your staff, rather than how you pay your staff, makes you competitive.

Look below the surface in all of the areas where you compete and you will find areas of synergy. You can learn many things from each other without divulging any information that changes the competitive balance. However, what you learn will make both of your organizations stronger, more effective, and more efficient.

Making a competitor stronger, more effective, and more efficient seems counterintuitive. However, your competition is based upon the results you produce, the value of your results, and the outcomes promised by your mission statement. If your nonprofit produces more valuable results and your clients have more meaningful, measurable, and durable outcomes, the competitor’s strength, effectiveness, and efficiency will never be a threat. Conversely, imagine a family is considering investing in a Christian education for their children. If all of the faith-based schools in the area have great outcomes, families are likely to associate great outcomes with a Christian education. In this case, helping your competitors to prosper, benefits your school over the long-term.

Every nonprofit is part of a system of nonprofits. If the system appears weak, it is easy for clients, donors, advocates, and referral sources to question whether supporting one member of the system is prudent. In addition, weakness in the system creates an opportunity for other competitors to enter the market or for existing competitors to expand their presence. Being part of a strong ecosystem has more benefits than being the best in a weak system.

Collaborating with non-competitors provides many of the same benefits with less risk. It still important to avoid sharing any information about your competitive advantages.

Exploring areas of cooperation with both competitors and non-competitors makes sense. For instance, combining payroll services may increase the scale of activities and provide a cost savings for all participants.

Next Step:

Look at the elements of your business model and determine which are non-strategic

Seek collaborators who can help you develop new strengths and who can increase your efficiency and effectiveness in non-strategic areas

Ensure every lesson learned from your collaborations helps to increase the effectiveness of your mission, your nonprofit’s sustainability, and the effectiveness of your strategy

Part of being a good steward of donor funds is constantly improving operational effectiveness and efficiency. A growing level of operational effectiveness and efficiency helps to increase donor loyalty, generosity, and engagement as well as your nonprofit’s sustainability.

Your nonprofit’s sustainability also depends on your nonprofit’s strength, mission effectiveness, and the durability of the promises made by your mission statement. When making changes, ensure the changes raise mission effectiveness, benefit your clients, and are aligned with your donors’ priorities.

Take It Further:

Looks for ways to collaborate with government agencies and for-profits

Ask the board to create policies that build and protect the strategic areas of your business model

Ask you board to make the support of your nonprofit’s strategy, mission, client outcomes, and your competitive advantages the priorities when making any decision

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