You have a great idea for a cause, or perhaps you are already investing time, money, and resources into charitable work. You’ve thought about taking the leap and turning your project into a registered 501(c)(3) organization. But what should you consider before formalizing your project and where do you start? A competitive assessment will help you decide!
What is a competitive assessment or competitor analysis?
A competitive assessment (sometimes called competitor analysis) is a deep dive into the landscape surrounding a business, idea, or venture. It is often used in the for-profit world to examine the surrounding market, evaluate competitors, assess risks, and assign value to opportunities. It’s also an excellent foundation for writing a business plan, often mapping the case for why a venture will be successful and profitable.
‘Competitor’ can be a dirty word when it comes to the nonprofit environment. But it’s important to understand how you will stand out among the crowd. Why? Because you will ultimately be competing with other organizations for donations, volunteers, grants, and resources. By clearly defining your area of work, versus your neighboring nonprofit’s area of work, overlap is reduced and the industry as a whole benefits. Resources can be better shared and more collaboration is made possible with fewer hands pulling from the same pools.
Ultimately, for those in the nonprofit industry, what matters is that good work is being done and charitable needs are being met. Validating the need for your nonprofit with research is the best way to narrow your area of work and ultimately affect the change you are looking to make in the world.
Do not overlook this business tool if you are thinking about starting a charitable organization!
Components of a great competitive assessment
At a high level, a precursor to a competitive assessment is a basic self-assessment. Before you assess your competitors, you should have a pretty good idea of the who/what/where/how, and why of your organization.
Who will I serve and where?
Be specific in your assessment. For example, saying “helping the hungry” is very broad, whereas saying ‘We will serve unhoused, food-insecure people, in the east district with free sack lunches’ is more specific.
What need am I meeting/filling?
- How will our work be accomplished and how will it differ from the work of other charitable organizations?
- Why now? Why should donors support my cause, and supporters endorse my work?
Next, get started on your Competitive Assessment. Free resources for your research should include Charity Navigator, Guidestar, LinkedIn, and the IRS Nonprofit database. Social media profiles, competitor websites, blog posts, and internet searches for articles should also prove helpful as you dig into the competitive landscape.
Your comprehensive competitive assessment should examine:
- What other groups/organizations are also meeting/filling this need. [Your assessment should compare 4-5 organizations]
- Year it was founded
- List of Board Members and officers
- What is the size of the organization?
- Operating expenses
- Program Expenses
- Number of employees and volunteers
- What is their area of work? What is the scope of their reach?
- Mission and Vision Statement
- Services provided
- Programs offered
- How are they marketing and positioning themselves? Is there an opportunity to differentiate your organization?
- Social Media sites
- Frequency of Posts
- Following and Engagement
- Have they received grants or awards?
- This information is sometimes published on their social media sites, website, or blog posts in the form of badges, stickers, or announcements.
- What is the longevity of organizations? Have they seen growth over the years? Are they scaling up or slowing down?
- Can you identify any strengths or weaknesses?
- Remember, this is where you will look to find your organization’s sweet spot, or how you will uniquely fill any unmet needs and provide a solution only you can bring.
- Are there areas where you can collaborate?
- Are there areas the organizations are spread thin? Are there places where you can work together?
- Do you have unique expertise that can supplement their efforts?
Putting your competitive assessment to use
Once your competitive assessment is complete, you will have a good idea of how your organization will compare against others in the same area of work.
The assessment will lay the foundation for how you should differentiate yourself from your ‘competitors’ and what your organization will do that will compel donors to support your unique cause.
Thoughtfully examine how the groups stack up against each other. Honestly compare your cause to theirs.
Where is there overlap? Are there any gaps that can be filled? Does your organization have strengths or specialties that competing organizations cannot or are not meeting? Where are they excelling?
After looking over the facts, reevaluate your idea. Hopefully, this process has added fuel to your fire! Hopefully, you have found a true niche and need that you are uniquely qualified to fill!
If not, and you have discovered that the need you had in mind is already well served, look for ways to support the existing organization and the work being done.
Investing time and research before you get started is a great first step to knowing how to position your organization and build an effective program.