Where Do You Fit in the Market?

Because nonprofit organizations exist to do good, as opposed to generate profit, they often view their activities as outside of the market economy. But the fact is that nonprofits are very much part of a market economy and the sooner they determine where they are best positioned within that market, the more successful they will be at creating social change.

A nonprofit is best positioned where their core competencies (those organizational assets they have that cannot be easily taken or replicated) intersect with a community need, apart from where their competitors are strongest. Which looks like this:

This may seem simple, but it is rarely articulated in the sector.  And the pressure to collaborate, partner, network and “do as much good as possible,” makes this analysis tricky, if not politically challenging, to undergo. The idea is that if a nonprofit organization can figure out what part of the solution to a social problem they offer and how that relates to the piece their competitors have to offer, then they can start to chart their way forward.

Let me give you an example. Emancipet is a nonprofit that spays and neuters animals in order to reduce, and eventually eliminate, the need to euthanize a growing population of unwanted pets. Their organization is part of an extensive continuum of domestic animal services in their region, which includes animal shelters, vets, pet stores, etc. Over a year ago Emancipet wisely conducted an analysis, with several of their collaborators and competitors, to delineate each group’s role in the overall effort to create a healthy domestic animal population in their region. This marketplace mapping can’t always be so collaborative, but is still very much required.

With a marketplace map in hand, a nonprofit can:

• Better articulate to funders what they are uniquely positioned to do
• Forge partnerships with organizations who supplement weaknesses the organization has
• Stop wasting resources on “doing it all” and focus on the 1-2 things they do exceptionally well
• Reduce competition for resources

To name a few.

So, how do you figure out where you fit in the marketplace? Start by asking your organization some key questions and answering them openly and honestly:

• What do we do better than anyone else?
• What are the community needs/problems we are trying to address?
• Who are our competitors and potential collaborators?
• What do they do better than us?

Simply having these kinds of discussions with your staff and board is a huge step forward. Once you have started to answer these questions and begun to plot your position in the market, you can chart a strategy forward. And that strategy will be infinitely stronger and more achievable because it was not created in a vacuum, but rather informed by the market in which you operate.

Photo Credit: Amy McTigue