Asserting Difference: The Strategic Response of Nonprofit Organizations to Competition

Abstract

Sociological research on nonprofit organizations has identified several strategies by which nonprofits may respond to environmental challenges. I explicate a strategic response that I call differentiation, and I locate the specific condition under which it is implemented, the condition of competition. I compare the strategic responses adopted by one nonprofit, a large United Way, in two different moments: a period of monopoly and a subsequent period of competition. I show that nonprofits differentiate themselves when facing a crowded market. Differentiation occurs when nonprofits work to convince other actors that they, rather than their competitors, deserve resources. They seek to assert uniqueness and superiority over their rivals by constructing a hierarchical relationship between themselves and others.