Put Up Your Dukes! Do Nonprofits Fight For Donations?

+ Is it true that nonprofits compete for donations?

+ This is an interesting question at an important time for nonprofit organizations.

+ Like any business, nonprofits compete, but the game isn't that clear cut. Instead of a competition between organizations it's an ongoing challenge to secure a portion of the dedicated social capital available to better the world around us.

+ Colorado has the most nonprofits per capita of any state in the U.S. At the same time, Coloradans earn 8% more income than the national average but contribute 8% less to charity. Colorado nonprofit organizations have a uniquely competitive funding environment.

+ Government entities, foundations, and corporations typically annually budget their investment in nonprofit organizations. The amount of dollars varies from year to year but once the limit is set the reality is that not all organizations will be funded.

+ Corporate America takes a leading role in community philanthropy. Amidst the drastic change in social mood, let's not forget that American companies contribute billions of dollars year-in and year-out in support of our communities.

+ Corporate giving has and will continue to decrease in 2009. Click here to read more about the void for a growing number of charities and service organizations.

+ Nonprofit organizations' other key partners, private and community foundations, have had their assets greatly reduced and have been forced to make tough decisions. However, some foundations have maintained or even increased their giving! Click here to read about Colorado foundations that are leading the way.

+ As the economy expands more dollars make their way to the social bottom line, but when the economy contracts the pool of fixed dollars decreases.

+ So, yes, to some extent there is competition for dollars in that each pot of funds has a limit.

+ However, you also must factor in a few elements that make the nonprofit sector unique and minimize competition.

+ Nonprofit organizations spend far less time competing over existing resources than they spend developing new resources. While the existing amount of social capital is finite, nonprofits are dedicated to reaching new donors, forging new partnerships, and finding innovative means to fund their work. Rather than competing for a slice of the pie, nonprofit organizations are fantastic pie makers.

+ Nonprofit organizations also cannot compete over one important resource - an inspired philanthropist. (aka YOU!) If you have a clear sense of your giving priorities and goals, it is likely you will increase giving by adding organizations rather than stopping gifts to one group to give to another. Each year individuals make up roughly 80% of the giving nationwide.

+ When social benefit is the goal, collaboration and cooperation is to the advantage of all parties. Community Shares is a great example of disparate organizations collaborating rather than competing. In the nonprofit sector there are many opportunities to form collaborations where everyone wins. (The nonprofit, funders, and clients.) We will likely see more groups combining efforts as social capital decreases.

+ Keep in mind, if the U.S. nonprofit sector were a nation it would be the 16th largest economy in the world! We have many strong business minds running nonprofit organizations and any competition that does exist spurs excellence and innovation. Organizations are stronger because of the need to secure social capital.

+ In the end, the vast majority of nonprofit organizations recognize our goals overlap and it is in our best interest to generate new social capital and grow the collective culture of giving rather than compete over what exists today.

-Share Holder Jason