Standing Beside Alaska's Non-Profits

A Competitive Debate

Here at The Foraker Group, our staff has many debates. Healthy dissent is encouraged. We actually get along well, but when we feel strongly about issues and disagree, we can fiercely defend our position. One issue that always prompts a debate is the role of competition in our sector.

Partnership is a element of The Foraker Group Nonprofit Sustainability Model©. It has been our experience that when nonprofits partner with others, a positive synergy occurs. Nonprofits that partner seem more resilient than those that try to accomplish everything themselves – which can lead to mission drift. We also have seen that when nonprofits actively compete with another organization providing a similar service, two problems can occur. One is that the public does not understand why nonprofits can’t work together, avoiding duplication of effort. That behavior affects our credibility. The second problem is that competition can affect funding. In some cases, we’ve observed that donors stop giving because they are not sure which worthy cause to support in a competitive dispute. Therefore, we encourage organizations to collaborate, not compete. The real reason is that we can do more with each other than we can apart.

However, we do live in a country and world that encourages competition. In fact, some theories support competition as natural. So our debate at Foraker centers on how the nonprofit sector understands competition. Is it a dog-eat-dog world where the biggest, strongest and swiftest wins? Are we describing a business venture that uses aggressive tactics to minimize a competitor’s worth? When businesses compete, the customer can benefit – but is that the same in our sector? We often end these discussions without a clear agreement on the role of nonprofit competition, but I think the debate is really over semantics about what competition really means.

Where I grew up, competition was manifested through sports, especially football. When my family moved to Alabama where I had accepted a job as the development director for a United Way, my five-year-old daughter came home from her first day at kindergarten asking who we were for, “Alabama or Auburn?”

In sports competition, there are winners and losers. The team with the best players, coaches and strategies (or luck) wins. Obviously nonprofits with larger staffs, better boards and more capacity may out perform organizations with less – but we’ve witnessed organizations move mountain, often with nothing more than a founder’s zeal.

In business, there are winners and losers. However, in business winning is not always the result of being better, but rather of being more aggressive. One of the more used competitive strategies is when one firm compares itself to another, attempting to prove superior value. Avis articulated a comparison by proclaiming they were “#2 and trying harder,” or we have the battles between Coke and Pepsi, or AT&T and Verizon. However, in the end is the victor the one competing to win and therefore beating the other guy, or is something else at play? And how do nonprofits compete? Do we ask the homeless to choose between competing shelters?

When Collins and Porras researched Built to Last, they found very few instances where a company’s Big Hairy Audacious Goal, or BHAG, was based on a statement of beating the other guy. More often they found comparable BHAG’s to have better impact – like Stanford proclaiming it wants to be the “Harvard of the West.”

When we help nonprofits think strategically, we hear some express the desire to be “the best,” “the most effective,” or “most well known.” While we wish for the best for all organizations, we are hesitant for them to base their future on that vision. Maybe we suffer from self-righteousness? Is it wrong to envision a more altruistic world where we can get along – live in peace – not win so others lose? Still, even with this Pollyanna attitude we are not naïve enough to think there is a place where all organizations will survive – some will while others don’t. So even altruists must accept that in this world there are winners and losers.

Nature has competition – at least that is what Darwin proposed. One of my favorite college professors had a unique spin on Darwin’s Theory. He said that Darwin’s “survival of the fittest” was misunderstood. The word “fittest” suggests competition using physical strength or some other capacity. However, my professor asserted that a better way of describing what Darwin really meant was “survival of the fitting-in-est.” Those organisms that could adapt to changes in their environment would survive – those that could not or would not adapt would not survive. Survival may not mean beating the other guy as much as adjusting to an ever changing environment. If we could cooperate and survive, we would use that strategy.

The opposite of competition is cooperation. One element of the sustainability model requires cooperation, collaboration or partnerships. Cooperation or partnerships can only occur when we share purpose and principles with others. While for-profits always seek market-share, examples exist of cooperation – like shopping centers where stores competing for a larger share of the market position themselves side-by-side with a competitor to increase traffic for all. Other unlikely alliances can be seen in politics where previous adversaries work together on a common issue because their purpose is aligned. However, when that issue is resolved, they usually go back to their previous animosity.

If competition could just be seen as adapting to the environment, maybe we would not need to beat the other guy to win. Still, there are times when it seems there is not enough to go around so to survive, we must win. When that’s the case, how can we truly cooperate, collaborate, or share?

Scarcity is the belief that there is not now, nor will there ever be enough to go around – in order to survive, one must beat-out another. If that is a person’s core belief, cooperation is hard to achieve. On the most basic level, cooperation depends on the belief about scarcity. Are we a half-empty kind of person? Often when people are ruled by this notion of scarcity, they want to hoard all they can – they become greedy, taking more than they may ever need waiting for the eventual rainy day. While there can and will be rainy days, how much do we have to save for those days? As much as the people involved with the banking practices that led to the economic catastrophe of 2008? My assumption is that people who succumb to greed are ruled by scarcity. Fortunately, I believe, in our sector the opposite of scarcity – abundance – seems to be the norm.

Abundance is often described through the metaphor of a “rising tide” or a glass half-full. I know many people have a really hard time getting their head around the concept that there really is enough to go around because they limit their concept of enough to material things, especially money. However, throughout history our religious leaders have preached the concept of abundance. Were they wrong?

Buddhist, Islamic, Christian and Jewish organizations have all used Foraker services – and we’ve discovered that each has its own theory of abundance. They all believe that there is enough to go around while at the same time acknowledging that limits exist in life.

  • The Buddhist practice is the Four Noble Truths, the last of which lays out the Eightfold Path that provides guidance to personal growth and abundance. But their belief about abundance is not focused on the material.
  • Jewish belief on abundance informed both Islamic and Christian traditions. Abundance is a core value in Judaism through a commitment to Tikkun Olam, or the obligation to share your abundance with the community. They believe the world has abundance, provided by God, for our use – but we must share.
  • Islamic teaching states that God created an abundance of resources in nature to satisfy human needs on earth. Man, accordingly, is encouraged to use the abundance of God’s bounties to benefit mankind and is discouraged from pursuing strictly materialistic objectives. Islam rejects materialistic gain as the ultimate ambition of man, especially when it leads to the oppression of others. They believe the world has abundance, provided by God, for our use.
  • Throughout the teachings of Jesus, we hear of the need to believe in abundance. It’s clear in the miracle of the fishes and loaves at the Sermon on the Mount, or the parable of The Birds of Heaven and the Lilies of the Field, which urges us not to be anxious about what we may not have, and faith that all will be provided. “Look at the birds of the air – they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them.” They believe the world has abundance, provided by God, for our use.
  • All of these religions urge us to not limit ourselves with thoughts of scarcity. There really is enough to go around, as long as we don’t interpret “enough” as just more stuff. Abundance is the realization that we all can have enough stuff if we are not greedy. Some of that stuff is material, but there is more than just material abundance. These religions also assume we understand that abundance cannot be achieved when greed exists. When we have a more than we need, the religions suggest we share with others.

    It’s not just religious beliefs that drive such thinking. Social science has documented abundance behavior in many diverse groups. Our neighbors to the north, the Inupiaq, practice abundance. Theirs is based on the knowledge that when they cooperate, they generate more for all. They found abundance through cooperation. While whaling crews may compete to see which can gather the most, once the harvest is complete the bounty is shared with the entire community. This is how all humans survived in the past. We worked together to support each other. Those of us lucky enough to visit the Slope during whaling season still see in action this same cooperation for abundance. In this model the hunter does have the first choice of the bounty, but the rest, in fact most, is shred with the entire community.

    I have come to understand where idealists can actually reconcile this paradox of accepting the realities of competition, or limits, while remaining true to the values of collaboration and partnership. These opposing views can be balanced. When we work together, we can actually create more for all. The real competition is how well we do what we do. If we compete against ourselves – doing as well as we can and relying on others to do the same – we can all have enough. Competition is internal, not with each other.

    So what is the role of competition in our sector? Competition means focusing and adapting, not trying to win. Competition is doing the best at what we were founded to do, staying focused on how to do it better, confronting the reality of a changing world, then adapting as needed. In order to survive, others don’t have to lose. Some organizations may cease to exist, but that could be a result of their inability to know themselves and their strengths, or their lack of direction. It’s not the result of another organization intentionally trying to beat them down.

    Many external factors exist that make this ideal hard to achieve. One is that people get stuck in their belief in scarcity. They remind us that there’s “just so much to go around.” We have some funders that encourage us to apply for competitive grants while at the same time penalizing us for not working as a system. Or we may fear that funding will decrease in the future and we worry about the wrong things – like focusing on whether we have enough money – and in the process we forget about the right things – like focusing on our mission.

    When I moved to Alaska 18 years ago, I saw very few organizations raising large gifts of $1,000 or more from individuals. Since I had helped to initiate leadership giving programs and then the major giving program in the United Way system, I wanted to increase use of those strategies here. I remember how people were reluctant to raise the leadership level at United Way from $500 to $1,000 – many thought few people would give at that level. When we brought the concept of asking individual donors for annual gifts of $10,000 or more, most were skeptical that would ever work in Alaska. “There are only a few families with that much money,” they would assume. Today it’s hard to find any large nonprofit without $1,000 donors, and it is no longer rare to see donors giving $10,000 or more each year. Today Anchorage has the highest percentage (based on population) of $10,000 donors to United Way in the nation. Someone who believes in scarcity would have thought that to be impossible. And even if it did happen, they believed, if a gift that size went to one organization, it probably came out of the pocket of another. The reality is that giving at that level has increased for everyone. The tide actually did rise. It’s not about a limited pie, rather it’s about abundance and a change in our mental attitude.

    Focus on what matters most – that’s doing what you were founded to do and doing it well. Our sustainability model specifically has elements other than raising enough money. To achieve sustainability, we encourage focus, the right board and staff working together, partnerships and finally unrestricted cash. When we do these basics well, we will succeed – if not in material ways, at least in the most human and sustainable ways.

    In early 2009, during the shock of the economic meltdown, we encouraged our Partners to not think of doing more with less, or of becoming “lean and mean” – we encouraged them to do the best they could with what they had. In lieu of focusing on needs not met, change thinking to an understanding of having enough and doing the best job possible with what you have. That advice will help us “compete” without having to win.