To niche or not to niche? That is the question.
The following post originally appeared on givingusa.org on October 8, 2021
By Avrum Lapin and Ross Berkowitz of The Lapin Group
The internet allows every person to be hyper-particular in what they are looking for—and less willing to settle for the less specific, or general. In the second part of the 20th century, whether it was I Love Lucy, The Fresh Prince of Bel Aire, or Seinfeld, when you showed up to work the next day and asked, “did you watch that last night…” the answer from the majority was probably “yes” because a large segment of American society had a shared pop culture oeuvre—in both the content and the way that entertainment was consumed. Today, both the how (streaming, social media, podcasts, cable…the list goes on) and the what are so segmented and prolific, it is the rare coincidence to find those who partook of the same content at the same time. And even when certain shows gain the attention of the public, they can often be shunted aside by the next great thing within days as the stream of original content is unyielding.
For better or for worse, this is true for philanthropy as well. In the same period of the 20th century, many gave to the same organizations and causes as those around them, often opting for causes that had a form of universal appeal. People once had full faith in the ability of large umbrella organizations or community chest such as United Ways and Jewish Federations to be the best qualified to decide how to disburse those funds. For example, if a person wanted to give to cancer research, they were most likely to give to the American Cancer Society. Today, with over 100 distinct forms of cancer identified, and charities that cater to each, many will research the type of cancer that specifically affected their life or their loved ones’ and give to them. You can “Google” a priority and find dozens if not more organizations that meet your personal interests and sensibilities.
So, what does this mean for a nonprofit today? With today’s abundance, or some would say oversaturation, of nonprofits, it is essential to both be internally very clear about your unique value proposition, and to be able to clearly communicate about that unique position to with your donors and other stakeholders. In addition, it is essential to know your audience and be aware of the niche market that you serve.
The concept of a unique value proposition, by definition, must be unique. If you are sticking to generalizations and platitudes, your message will not resonate with most modern sophisticated donors. A mosque, synagogue, or church cannot just say it is “welcoming.” Of course, YOU think you are welcoming—but so does every other house of worship in your area. Dig deeper. We hope that if you work at, or help lead, a nonprofit, it is because you believe in its mission. So, what makes that mission unique, valuable, and worth the donor’s charitable dollars?
One way to assess your unique value proposition is to tap into a common piece of advice for success: you either need to be the first, the best, or the cheapest. This stems from a business concept often referred to as the “Iron Triangle” that refers to the need to balance time, quality and cost when developing and selling a product. Let’s look at each.
Be the first: A nonprofit recognizes a need in society or in a community and addresses it. Being the first to recognize that need and to find a solution gives an organization the ability to serve society with limited competition in terms of donor priorities within a niche market. It is important to recognize that being first can refer to a new take, not a completely new charity concept that has never existed before. This could be the first to provide services in a particular geographic area, the first to focus on a specific priority that was previously only addressed by an umbrella organization, or the first to market to a new donor audience.
Be the best: While this can simply refer to being the best from a traditional philanthropic standard —providing the most effective services with the least amount of overhead—there are other ways to stand head and shoulders above the rest. You may also be the best at marketing to donor audiences, using the latest in technology, or having the best and most productive fundraisers at your disposal, among other innovations.
Be the cheapest: While no charity should sacrifice their commitment to excellence in their space, the quality of their services, nor expect their dedicated staff to not be compensated fairly, there are advantages to being able to do the work less expensively. Foundation and individual donors look at the percentage of overhead vs. programming when making philanthropic decisions. Consider, if you can, sharing overhead costs with another organization (admin, accounting, HR, physical space, etc.), identifying needs that can be adjusted, utilizing technology to save time and money, and even merging with another organization if it best serves your community.
To conclude, let’s put a potentially controversial question out there. To embrace a unique value proposition—and to best serve your community or your desired community, are you willing to potentially distance some to serve others fully and truly? In a world where there is a subreddit for every idea under the sun, and products cater to niche audiences more and more, this is a question that the philanthropic world must ask and act upon.