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Linda Lysakowski, ACFRE

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Competition and Collaboration in Business Fundraising

You’ve probably always thought you had some degree of competition for your services and lots of competition for funding from other nonprofits in your community. But have you thought about whether or not you are competing with for-profit companies? If you are, how can you turn these competitive relationships into collaborative ones? And why should you think about this?

There are several reasons to think more collaboratively. First, businesses, as well as foundations, often like to fund programs rather than individual organizations that might be providing these programs. Second, if the business community sees you as competition, why would they want to support you financially?

If you think you couldn’t possibly be considered competition for a for-profit, consider these examples:

  • Nonprofit universities that have for-profit competition (i.e., Phoenix University, the largest university in the United States)
  • A performing arts organization, such as the ballet, in a community like Las Vegas, Nevada, or Branson, Missouri, where for-profit sources of entertainment abound (or even in a small community with one for-profit movie theater)
  • A nonprofit hospital that competes with a large for-profit hospital in its community, such as Kaiser
  • A museum restaurant that competes with locally owned specialty restaurants nearby
  • A hospital gift shop that happens to be right across the street from the Hallmark store
  • A YMCA that competes with the local gym
  • A local senior center that provides meals-on-wheels that competes with a for-profit eldercare company that provides services to cook for seniors in their homes

While most nonprofits are not competing with the local Walmart or Target, some of them might be operating thrift stores that could be conceived as competition for low-end department stores.

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Linda Lysakowski, ACFRE, is the author of Raise More Money from Your Business Community: A Practical Guide to Tapping into Corporate Charitable Giving and its companion workbook.

Raise More Money from Your Business Community - Book and Workbook, by Linda Lysakowski

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Think about your organization and how it might be competing with some local for-profits as well as who your nonprofit competition might be. (This will be much easier than thinking about your organization competing with for-profits.)

Let’s list the nonprofits and for-profits that might compete with your organization. Remember to think about the specific programs you offer. While the senior center provides things no one else does, those meal-on-wheels programs, for example, might be considered competition to the for-profit eldercare company.

Now that you are aware of these programs and who your competition might be, there are two things that will help you raise money from the business community. You should (1) determine how you might collaborate with the other nonprofits listed in order to seek funding from a company—remember that businesses want to get the most bang for their buck, and (2) determine if there are ways you can partner with the for-profits that might consider you competition.

This will take some creativity on your part. Bring the program people in your organization—your volunteers, your board members, and your executive staff—together with your CFO and development director to help answer these questions. It might take several days of brainstorming. Perhaps set aside an afternoon for each program your organizations runs. You might also add to you lists any contact people you have good relationships with at both the nonprofits and the for-profits.

For example, if you are a local senior center, you might end up with something like this:

Programs We Offer Nonprofits That Offer Similar Programs Unique Advantages of Our Program Unique Advantages of Their Programs Funders That Might Be Interested in Funding a Collaboration
Low-cost lunch programNone
Meal-on-wheels programNone
Free tax service for seniorsNone
Trips for seniorsNone
Cards and gamesLocal libraryWe offer this daily. Theirs is limited to once during the week.They also offer a book club for seniors.
Exercise and dance classesYMCA, YWCA, municipal poolOur program are limited to seniors. Theirs is open to anyone.They have a pool for aqua aerobics. They also run a program on Saturday, when we are closed.
Gift shopLocal hospitalOurs is convenient for seniors who come in daily for lunch.They offer live flowers and balloons

Now, let’s look at an example of for-profit companies that might be competing for your services:

Programs We Offer For-Profits That Might Be Competition for This Program How Big a Part of Our Organization Is This Program? How Profitable Is This Program for the For-Profit Company? Are There Ways We Can Work Together With This Company?
Low-cost lunch programLocal fast-food-restaurantsIt’s our main program.Lunch accounts for 30 percent of the company’s business.Ask companies for coupons for breakfast for our members. Ask for donations of napkins and other items that would promote their business and provide us gifts-in-kind.
Meal-on-wheels programHome health careAbout 10 percent of our clients use this service.Food program is about 15 percent of their business. The rest is in health care and housekeeping.Offer to put brochures about their services at the center. Ask a representative to come talk to our members about the health care services. Ask them to fund our meals-on-wheels program to save them from hiring workers to prepare meals, saving them money.
Free tax service for seniorsLocal accountantsIt’s seasonal. We provide tax services for about 20 percent of our members between January and April each year.Seniors make up 45 percent of our community, so it is estimated that accountants have 45 percent of their business coming from seniors.Ask accountant to donate services to do simple tax returns. In exchange, they can promote their services for members with more complex tax situations.
Trips for seniorsLocal bus companiesAbout 10 percent.About 80 percent of their business is from seniorsHire bus companies to run our local trips to malls, plays, casinos, etc., at a discount. Promote their longer trips.
Cards and gamesNo oneAbout 14 percent of our members stay after lunch to participate.N/AN/A
Exercise and dance classesLocal gymAbout 20 percent of our members participate.About 20 percent of their business is from seniors.Hire instructors from the gym. Ask for donations of equipment.
Gift shopLocal gift shops, dollar storesAbout 10 percent of our members shop while they are here for lunch, mostly for cards and small household items.About 45 percent of their business is from seniors.Ask for donations of their unsold inventory. Put flyers out promoting their specialty items.

These are just a few examples. I am sure your brainstorming will uncover many ideas you might not have thought of. And don’t forget to develop your case for support and list of contacts at these nonprofits and for-profit companies so you’re ready to make your approach once your brainstorming is completed.

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