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Keeping an eye on the big picture

Successful fundraising does not occur in a vacuum. Raising funds in a vacuum refers to actions taken without any connection to or knowledge of what is happening in the fundraising landscape surrounding your nonprofit. This is akin to sailing a ship in the ocean without checking the weather. In order to develop and implement effective, successful fundraising strategies, it is critical that nonprofit leaders understand, through competitive intelligence, the funding landscape of the industry in which their organization operates.

What is competitive intelligence (CI)?

In the for-profit world, gathering and analyzing key information about the environment in which a business operates is known as competitive intelligence. In general, business-related competitive intelligence involves topics such as:

  • Identification of competitors
  • Any aspect of your competitors' operations, from products to operations, marketing and promotional strategies, corporate culture, production capacity, distribution plans, sales volume, corporate structure and more
  • Competitors' price moves and pricing strategies
  • The market, market drivers, market influencers and market dynamics
  • Consumer preferences and trends
  • The regulatory environment

And just as competitive intelligence is essential to the development of sound for-profit business strategies, it is also critical to the development of successful, sustainable fundraising strategies for nonprofits. Competitive intelligence in the nonprofit sector is the process of defining, gathering and analyzing pertinent information that supports strategic fundraising plans and decisions. Types of information that are often part of the competitive intelligence gathering process for nonprofits include:

  • Identification of nonprofits in your sector
  • Researching the various aspects of these nonprofits' operations, services, outreach and fundraising efforts
  • Keeping abreast of events and giving trends that impact your organization, your sector or your cause
  • Identifying the foundations, governmental agencies, corporations and individuals giving to other nonprofits in your sector or supporting your cause
  • Staying knowledgeable about the regulatory environment that impacts operations, giving or fundraising in your sector
  • Being aware of organizational changes (for example, changes in trustees or leadership) that impact foundations, agencies or corporations that give in your sector or support your cause

What is a competitive intelligence quotient (CIQ)?

Competitive intelligence quotient refers to how well you as a nonprofit leader understand your organization's competitive landscape. It refers to your ability to understand and stay abreast of everything that is happening in the world outside your nonprofit so you can be as competitive as possible and position your organization to stand out from the pack and to be more successful in your fundraising efforts.

It means learning as much as possible — as soon as possible — about other nonprofit organizations competing for funding, your sector, your donors and your constituents. In short, having a high CIQ empowers you to anticipate and face challenges head on and boost your fundraising success.

How can you increase your CIQ?

Here are some ways to increase your CIQ and to build better fundraising strategies:

  • Research other nonprofits ("competitors") in your sector by conducting thorough intelligence gathering. Find out what foundations, companies and agencies are supporting them. Knowing who is supporting them can help you recognize where your organization stands and provide ideas about potential funding sources you may have overlooked.
  • Create profiles of each of the competitors you have identified for your internal knowledge. Review their websites, newsletters, annual reports and practices. Identify what you think works and what doesn't work.
  • Find out what services and programs other nonprofits in your sector are offering. Compare them to yours to see if there are any missed opportunities for your organization.
  • Understand your competitors' operational and fundraising models. How are they similar to your organization? How are they different from your organization? How can you use this information to make your operational or fundraising models better or more efficient?
  • Compare your own organization to other nonprofits in your sector. What are you doing similarly? What are you doing differently?
  • Develop a keen understanding of how your nonprofit is faring in terms of fundraising among the competition. Know where you rank, where you want to go, and how far you have to go to get there.
  • Analyze the information you have gathered. Examine the information to identify what you or your organization might do differently or better than your peers to increase your operational efficiency and improve your fundraising success.

Where can you find this information?

You can easily find sources of competitive intelligence in the nonprofit sector (many of which are free). They include: philanthropic journals; newspaper society pages; lifestyle magazines; nonprofit and philanthropic websites; business and trade journals; general news publications; websites such as GuideStar; social media sites such as Facebook, Twitter and LinkedIn; specialized nonprofit research websites such as TaxExemptWorld; government documents; public filings; newswires, Internet search engines and more. You might want to use Google Alerts, too. It is a handy competitive intelligence tool for keeping track of news and updates that impact your sector.

Another valuable tool you should consider using to boost your CIQ are nonprofit annual reports from both nonprofits and charitable foundations. Annual reports contain a host of information about programs, services, events, key volunteers, fundraising strategies, major gifts, donations, future plans, biggest donors, funding sources and much more. Nonprofit annual reports are generally available on the organization's website. But don't just read annual reports from your competitors in your own market. Look nationally as well. Annual reports from organizations similar to yours (but outside your market) can be a great source for fundraising tips, ideas and strategies that may not be used in your community.

Form 990-PF contains a wealth of information

Likewise, you can review Form 990-PF tax returns to learn a great deal about other nonprofit organizations and charitable foundations. The form must be filed each year with the Internal Revenue Service (IRS) by tax-exempt organizations with annual receipts more than $25,000. Here is just some of the information you can glean from reviewing 990-PF tax returns:

  • Income the organization received and the sources of these funds.
  • Operating and administrative expenses.
  • Net assets. This information is particularly useful when researching foundations.
  • List of officers, directors, trustees and key employees. Armed with this information, you can determine whether or not any of your organization's employees, volunteers or trustees have any connections to your targeted foundations. This can be useful in getting past "no unsolicited applications accepted" barriers. You can also use this information to find out about the interests of various individuals affiliated with the foundation.
  • Types of programs the organization or foundation runs. You will be able to see how much these entities spend on their programs.
  • List of past grant recipients. When researching foundations, the 990-PF tax return lists their grant recipients, the amount awarded, and the purpose of the grant award or gift.

Nonprofit leaders need to be armed with highly detailed competitive intelligence that tells them how well other nonprofits are doing and gives them a view of the big picture. Understanding how other nonprofits are raising funds can help you develop strategies that will enable you to develop and execute successful fundraising strategies. Also, observing the mistakes other nonprofits are making can prevent you from making the same mistakes and thus save you time and money.

It pays to keep an eye on the big picture and having a high CIQ will definitely provide you with valuable insight and the knowledge you will need to build a solid foundation for your sustainable nonprofit success.

For more from Ron Flavin, visit Ron's website.

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MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.

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Growth and funding strategist