An Organization Made up of Organizations


I still remember the day I learned one of the most important lessons about competition from an unlikely source: Dave Thomas, the founder of Wendy’s.
One of my professors at Duke University’s Fuqua School of Business told our class the legendary story. During a campus visit, Thomas was invited to speak about his family business. During his speech, he asked the MBA students, “Who is my biggest competition?” Of course, the eager-to-please students quickly answered Burger King or McDonald’s.
He shook his head and smiled. No, he told them, his biggest competition was (drumroll please) people eating at home. When my professor shared this response, you could have heard a pin drop. We MBA students had just been schooled on the true nature of competition.
Do nonprofits have competition? Absolutely. We compete with other nonprofits for money, resources, talent and attention. They are our Burger Kings.
But who is our true competition? I would argue that the competition we should worry about most is people doing nothing about our cause. It might be someone battling addiction who does not seek treatment or an adult who does not get a recommended cancer screening. Sometimes people choose to do nothing. Just as often, cost, transportation, trust, time or other circumstances make the decision for them.
If we look at this through a donor lens, your competition could be the prospect who cares about the issue but never learns about your organization. Or the one-time donor who never responds to a solicitation.
Your greatest competition may not be another nonprofit. It may be the status quo.
What Is an Easy Way to Map Competition?
In strategic planning and feasibility work, one of the most important early steps is understanding the competitive landscape. Before you launch a new program, expand into a new geography or build a social enterprise, you need a clear picture of who else is already operating in the space and how your idea fits within that ecosystem.
To help classify your competition, I want to walk you through an easy framework.
Though it may seem unlikely, think of your competitive landscape like a family tree. Your closest relatives share the most in common with you; distant relatives share much less. Competitors work the same way. Direct, indirect and distant competitors share varying degrees of similarity based on three factors:
Population
Geography
There is also one more group worth studying: comparable organizations. They may look a great deal like you, but because they operate somewhere else, you can learn from them without directly competing for the same participants or local resources.
How Can We Map Our Competitors?
Before we break down the different types of competitors, it helps to step back and ask a more basic question: How do we map the competitive landscape in a way that is useful for decision-making? One simple way is to think in terms of proximity — how closely another organization mirrors your services, your population and your geography.
Immediate Family: Direct Competitors
Direct competitors are the most obvious. They provide the same or similar services, serve the same population and operate within the same geography. Your staff likely sees their representatives at coalition meetings, and your organizations may compete for the same participants, funding and talent.
An after-school program’s direct competitors are other public, nonprofit and private after-school programs operating nearby. Remember to think broadly. Competitors could include smaller, home-based providers taking care of children after school.
Knowing your direct competitors can help you answer an important question: Why would a participant, funder, employee or partner choose your organization? The answer should not simply be that your mission matters. Their missions matter, too.
Extended Family: Indirect Competitors
To find your indirect competitors, take a step back in your family tree. Like extended family members who share the same roots, indirect competitors address the same need or problem, but in a different way. They may not share a similar mission, but they can still be substitutes for your service.
An after-school program’s indirect competitors include other activities designed to occupy children’s time and build skills, such as sports, tutoring, school programs like mock trial or student council, and volunteer opportunities.
They may not call themselves after-school programs, but that does not mean families are not comparing them. This is one of the reasons competitive analysis can be so useful. It forces us to look at choices from the perspective of the people we serve, not simply from the perspective of our organization.
Family Members Who Live Far Away: Comparables
Comparables are organizations doing similar work with similar populations, but in another geographic market. They would likely be competitors if they operated nearby. Because they do not, they can become valuable sources of ideas and best practices.
For example, an after-school program in Atlanta might look at organizations in Dallas, Denver or Phoenix. What are they doing that is producing strong results? How are they staffing their programs? What partnerships have they built? How do they generate revenue, measure impact and keep students engaged?
Choose comparables carefully. A nationally known organization may be impressive, but it may operate with a much larger budget or in a very different environment. The best comparables often serve similar populations and operate in communities with similar demographics, assets and challenges.
Comparables generally do not compete for the same participants or local resources. However, they may still compete for national grants, corporate partners, talent and attention.
Competitors help us understand our position. Comparables help us understand what is possible.
The goal is not to copy another organization. It is to understand what has worked, why it worked and whether any of those lessons could transfer to your community.
Distant Relatives: Distant Competitors
Like a third cousin once removed, distant competitors are not always obvious. They do not share your primary mission and may be marketed completely differently, but they compete for the same population’s time and resources. They include broad alternatives to your service, free options and, as we discussed earlier, doing nothing.
An after-school program’s distant competitors might include part-time employment, time with friends or entertainment. It may also include parents sending their children home alone or relying on friends and relatives because they cannot afford or access another option.
Some of these factors, including cost and access via transportation, are better described as barriers than competitors, but they belong in the analysis because they influence whether someone uses your service.
Traditional competitive analysis can become too narrow if it ignores the forces keeping people from participating at all.
This is why the Wendy’s story still matters. The choice is not always between your organization and an organization that looks like yours. The choice may be between your service and something that, on the surface, does not look related at all.

What Should You Compare?
Identifying the organizations is only the beginning. Next, decide what you want to learn. Depending on the decision you are trying to make, compare:
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Services and delivery models
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Populations and geographies
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Cost and accessibility
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Funding and revenue models
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Partnerships
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Client experience
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Outcomes and supporting evidence
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Positioning and unique value proposition
Make sure you are comparing more than what appears on an organization’s website. A strong brand does not necessarily signal strong results, and a smaller organization may be doing exceptional work without telling its story well.
Why Is Tracing Your Competitive Roots Important?
Understanding your competitive roots can shape your strategy and help ensure that your organization is performing at its best. It is particularly important when you are launching a new service or social enterprise, developing a strategic or business plan, building collaborative strategies or making a case to nonprofit investors, including funders, donors and grantmakers.
Studying competitors can help you clarify your unique value proposition. It can also reveal whether a field is saturated, fragmented or unnecessarily adversarial. Those findings might dissuade an organization from launching a new venture. They can also point to a collaboration that would produce better results than another stand-alone program.
After doing this work, we have found that a neighboring organization can be a competitor for one grant, a collaborator on another, and a source of learning in a different program area. The categories help organize your thinking, but our relationships in the social sector are rarely that tidy.
Sometimes the most strategic question is not, “How can we compete?” It is, “Does this community need another program, or would better alignment among existing programs produce better results?”
How Do You Find Your True Competition?
Websites, annual reports and Form 990s can tell you what organizations provide, how they position themselves and how they spend their resources, but they cannot fully explain why people choose one option over another.
We like to ask current stakeholders and potential customers (who are not current customers):
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What other options did you consider?
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Why did you choose this one?
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What kept you from participating?
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What would have made the service easier to access or more valuable?
Their answers may reveal a competitor, alternative or barrier you never considered. This is the nonprofit version of people eating at home. If we do not understand what people are choosing instead, we do not fully understand our competition.
How Can AI Make This Research Easier?
The good news is that AI can make this work much easier. It can help you develop an initial list, organize what you find and point you toward organizations you may not know. But, as we have discussed previously, you must give it enough context. I would start by describing your organization, the people you serve, your geography and the problem you are trying to solve. Then ask it to look beyond the usual suspects.
If current information matters — and it almost always does — use an AI tool with web-browsing or research capabilities. Here is a sample prompt to get you started:
I am researching the competitive landscape for [organization]. We provide [services] to [population] in [geography]. Help me identify our direct competitors nearby, indirect competitors addressing the same need differently, comparable organizations doing similar work in other communities, and distant competitors or barriers that may keep people from using our services. Tell me why you placed each one in that category and include links so I can check your work. If you cannot verify something, please say so.
Once you get the list, do not assume you are done. Go back and ask AI:
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What might be missing?
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Which organizations are most like us?
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Which comparables operate in communities like ours?
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What are they doing differently?
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Where do you see duplication, gaps or opportunities to work together?
Think like an MBA and be critical of our organization.
I would also ask AI to separate what is documented from what it is inferring. That distinction matters in using AI for research. Just because something is repeated across five websites does not necessarily make it a best practice.
Then comes the old-fashioned part: Open the sources. Check the websites. Read the annual reports and Form 990s. Look for evaluation findings. Talk with people who know the organizations and communities.
AI can help you get started, organize information and ask better questions. However, it cannot replace sound judgment. I often think of AI as an intern: the better directions I give, the better the result. AI is a powerful tool, but the strategic thinking — and the final decision — still belong to you. And, as always, trust, but verify.
What Should You Do With the Findings?
Do not let the finished analysis become another handsome document that sits on a shelf. Use it to answer questions like:
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Where are services being duplicated?
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What needs are still unmet?
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What can we learn from organizations elsewhere?
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Where would collaboration make sense?
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What makes our approach different and valuable?
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Should we launch something new, strengthen what exists or step aside?
Competitive analysis should not be a one-time exercise. Review it at least annually and refresh it before launching a major program, entering a new geography, pursuing a significant funding opportunity or making an important strategic decision. Today’s competitor may become tomorrow’s collaborator — and the reverse can also be true.
As you define your strategic or business plans for this year, we hope you take a moment to consider all your competitors in the field and how they may impact your approach. Remember, sometimes the greatest competition we have in the social sector isn’t the organization down the street, but people who do nothing and do not seek our help. The better you understand what people are choosing instead, the better equipped you’ll be to design services, partnerships and strategies that truly meet them where they are.
We’d love to hear how competitive analysis has shaped your organization’s strategy. What surprised you most?
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