Determining Your Nonprofit’s Unique Value Proposition for Donors and Funders (Finding Your Reason for Being)

Competition is a tough topic to tackle in the nonprofit sector. I agree with many experts who say there are simply too many nonprofits working on similar missions and confusing program participants, donors and the general public as they compete for attention, funding, and share of voice. I believe we can make far more progress as a sector if every organization looks around for those who share similar goals and are doing similar work, and creates opportunities to partner, merge, share resources, or at the very least, collaborate. 

But once you’ve done that, once you’ve exhausted every opportunity to prioritize collaboration over competition, doesn’t your organization owe it to the people you hope to help to differentiate yourself and stand out in the minds of donors and funders who might consider supporting your mission? 

I believe you do. Even if collaboration grows substantially in the nonprofit sector, donors and funders will still be inundated with too many competing asks, and they’ll still struggle to understand why they should give to your organization over another. They need to be able to quickly understand what your nonprofit does, how it is different, and the unique value it offers to your community, society, and to them as contributors to that cause.

That’s where your reason for being (which you might also refer to as your value proposition or positioning statement) comes in.

Your nonprofit’s reason for being is what makes your organization compelling to supporters in comparison to everyone else they might choose to give to. We define it as the specific sort of impact your organization is driving that no other organization in your ecosystem can make in quite the same way.

Your nonprofit’s reason for being is what makes your organization compelling to supporters in comparison to everyone else they might choose to give to. Click To Tweet

Here’s how to discover and develop yours. 

Step 1: Determine Your Comparative Set

Before you can determine your nonprofit’s reason for being/value proposition, you need to understand who you’re being compared to. The best way to figure that out is to simply ask your current and prospective donors and funders who else they’re giving to, and who else they might consider giving to instead of you. This can be done formally, through a survey or focus groups, or informally, through conversations with the donors and funders you work with or hope to work with. 

Their responses might surprise you. That’s what happened with one of our clients, an organization focused on utilizing mentoring to help young people find paths to financial and personal wellbeing after high school. Many within the organization assumed that their comparative set (the set of organizations donors might choose to give to instead of or in addition to theirs) included only other organizations focused on college access and post-secondary success. When they dug deeper, however, they found they were part of a much broader comparative set in the minds of donors that also included mentoring organizations like Big Brothers Big Sisters. Though Big Brothers Big Sisters works with younger grade levels and does not focus explicitly on post-secondary success, the mentoring aspect of the program put it in the same category as our client in the minds of many donors and funders.

Step 2: Assess Your Strengths 

What aspects of your organization do your current and prospective donors and funders see as particularly strong? What stands out to them about the work you do and how you do it?

Again, the best way to answer this question is through a survey, focus groups or casual conversations with your current and prospective donors. Ask them questions like “why do you choose to give to our organization?” or “when you read our website, what stands out to you about our organization?”

Some common themes will likely emerge as you ask questions like these repeatedly. If you hear a specific strength mentioned more than a couple of times, it’s likely one you should pay attention to and probe more deeply. Through this process, aim to zero in on 3-10 key strengths that you want to examine more deeply. This shortlist of strengths should meet the following criteria:

  • You believe it’s a true strength, not just a perceived one
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  • You think the strength is one that would compel donors and funders to give their support
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  • You suspect the strength could possibly unique to your organization

In the example I shared above of the organization focused on post-secondary success, we arrived at the following shortlist of strengths for the organization:

  • One-to-One Mentoring
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  • Reciprocal Mentor-Student Relationships Build Cultural Competence Across Lines of Difference
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  • Long-Term Mentoring That Extends Beyond High School
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  • Whole School Model
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  • Focus on Schools in Low-Income Communities/Low-Income Students
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  • Recognition of College as Just One of Many Pathways to Post-Secondary Success

All of these strengths felt true to the organization, and all of them felt like they could motivate donors to give. We suspected some of them could be unique as well, but we needed to do more research to find out, which is where the next step comes in.

Before we move on, one important note: in this post, we’re looking at developing a reason for being specifically for your donors. That said, you may want to consider your reason for being more broadly and develop one that resonates with all your stakeholders – donors, program participants, funders, community members, staff etc. If that’s your approach, you can still follow these same steps. Just be sure to get input on your strengths from all the groups previously listed, not just your donors, so you can develop a reason for being with all their perspectives in mind.

Step 3: See How Your Strengths Stack Up Against Your Comparative Set

The next step in developing your reason for being involves comparing your strengths to the strengths of other organizations in the comparative set. Assess each comparator organization from the list you created in step one on the basis of the shortlist of strengths you landed on in step two. Which of your strengths do your comparator organizations share? Are there any strengths that can be claimed by you and you alone?

The best way to get to the bottom of this is to create a comparative matrix, with your strengths along the left column and your comparator organizations along the top. Go through each comparator’s website and other  communications/fundraising materials one-by-one and see if they can claim the strength you’re assessing as one of their own. Or better yet, ask your donors, prospective donors (and other stakeholders) how they perceive the strengths of the organizations in your comparative set. If one of your comparative organizations can claim to have a particular strength you’re assessing for, give them a checkmark in that box, and if not, give them an X. Repeat this process for each comparator organization and each strength until you’re left with a comparative matrix that looks something like this one.

Note: organization names have been redacted for confidentiality purposes.

Then, look at the patterns. Is there one specific strength that your organization alone can claim? Or is there a set of strengths that only come together at your organization and nowhere else? Either of these patterns can be the starting point for your reason for being.

In the case of the post-secondary success organization that I’ve shared as an example throughout this post, we found two strengths that our client alone exhibited and no one else shared: 

  • Their whole school model, which allows them to work with every student in a school, not just the highest achievers.
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  • Their focus on college as just one of many pathways to post-secondary success

These two strengths paired well with a third: the organization’s focus on reciprocal mentorship relationships across neighborhoods and lines of difference. Though others in the comparative set shared that specific strength, none paired it with the two differentiated strengths above, and together, these three strengths all represented the organization’s unique approach to advancing equity.

Step 4: Find the Deeper Meaning and Write a Reason for Being Statement

You’re now 75% of the way toward determining your nonprofit’s reason for being. To complete this process, ask yourself what deeper meaning lies within your differentiators. What does being different in those areas actually mean for donors and other stakeholders, and why should that matter to them? In the case of the post-secondary success organization, the deeper implication behind the combination of differentiators we’d discovered had to do with the role the organization could play in advancing equity in the city where it exists. Because only our client worked with every student in a school (not just high achievers), because they recognized that many of the young people they work with want or need to take post-secondary pathways that do not involve four-year college, and because they’re addressing segregation by forming reciprocal mentorship relationships across lines of difference, they’re uniquely positioned to advance equity in the specific environment in which they work. Others in their comparative set can’t make this same claim because they work with only the top 10% of students and/or because they only focus on getting kids to and through college. 

Once you land on a deeper meaning like this one, your final task is to summarize it in a reason for being statement. Here’s two sample formats that can work well:

Organization name is the category of your organization best positioned to explanation of the thing only you can offer/do. That’s because only organization name:

  • Summary of differentiator 1
  • Summary of differentiator 2 (optional)
  • Summary of differentiator 3 (optional)

Organization name is the only category of your organization that explanation of the thing only you can offer/do. That’s because organization name:

  • Summary of differentiator 1
  • Summary of differentiator 2 (optional)
  • Summary of differentiator 3 (optional)

This reason for being statement should succinctly and clearly describe how you’re different from others in your comparative set in a way that is likely to be compelling to donors, funders and any other stakeholders you need to influence. 

What’s next? Using Your Nonprofit’s Reason for Being

Once you’ve determined your reason for being and summarized it in a succinct statement, it’s time to start using it. Your nonprofit’s reason for being should shine through in every piece of communications and fundraising collateral you create and every touchpoint through which a donor or funder comes in contact with your organization, from your website, to your case for support, to a speech your CEO gives at your fundraising gala. Begin updating your materials accordingly, and remember, you don’t always have to use your reason for being statement word for word. In fact, you shouldn’t. Treat it as a starting point to keep you on message and a touchstone to check yourself against, and then evolve it and explain it in different ways depending on where you’re communicating and the audience you hope to reach.

While collaboration should always come before competition in the nonprofit sector, you’re doing our organizations a disservice if you don’t help donors and funders understand how your organization is uniquely positioned to do the work it does. Get started on discovering and developing your nonprofit’s reason for being now, and don’t hesitate to get in touch if you need help.

This post was originally published on September 17, 2019 and updated on August 27, 2020.