Competition and Collaboration in the Nonprofit Sector: Identifying the Potential for Cognitive Dissonance

Abstract

Nonprofits compete with collaborators and collaborate with competitors regularly. Collaboration, a long-standing normatively preferred strategy for nonprofits, is utilized as modus operandi without thought to the potential unintended consequences. While competition is a dirty word for nonprofits, it is a necessary but undesirable reality and should not be avoided without consideration to the potential benefits. Nonprofit leaders may not be willing to explicitly acknowledge the use of competition as an operational strategy, which makes room for cognitive dissonance to impact the study of nonprofits. This piece identifies impacts of cognitive dissonance offering direction for future research exploring the interactive nature of competing with collaborators.

Competition is on the rise: To what extent does traditional fundraising performance research apply in competitive environments?

“…We hope that the exploration conducted here opens a new line of inquiry that further addresses the implications of an increasingly competitive nonprofit sector. In this new line of inquiry, we ask the field to consider the implications on the nonprofit sector when competition is accepted, rather than vilified (Barman, 2002; Curley et al, 2021). The following will discuss what we see as consistent with the existing literature in our exploration, what deviates, and then take a look toward the future of research addressing competition in nonprofits.…”

“…This finding should be encouraging for nonprofit practice; fundraising performance increases if competition is acknowledged and if nonprofits show willingness to engage with it. We reason that the context of the tournament, where competition is the expected strategy, mitigates the effects of cognitive dissonance (Curley et al, 2021).…”

“…This means the context of fundraising tournaments makes competition salient and unavoidable while also deemphasizing collaboration as the expected norm. While this context may seem artificial, it enables us to study how nonprofits behave once they are freed from negative connotations that competition may have (Racine, 2003; Sharp, 2018) and when cognitive dissonance should be minimized (Curley et al, 2021). Our study has implications not just for fundraising but also for other areas in which nonprofits compete with others.…”

“…For instance, competitive pressures increase in the grants marketplace where "resource scarcity leads to high, and increasing, levels of competition among organizations as the sector expands" (Faulk et al, 2017, p. 262). Similarly, nonprofits compete for talented employees not just with nonprofits but also public and private organizations while the draw to work for nonprofits has decreased, especially among the younger workforce (Walk et al, 2021). This reiterates the need to understand how nonprofits can alter operational strategies under competitive conditions to improve outcomes including, but not limited to, fundraising.…”

“…This study explores what happens when competition is acknowledged and needed as a strategy to perform well (Barman, 2002; Curley et al, 2021), removing the implicit assumption that collaboration is the norm. We utilize a case of directly competitive online fundraising tournaments: an environment in which organizations who perform better get to stay in the tournament while those who lose (aka raise fewer funds) drop out.…”