Zero-sum Games and Non-profits: Why this makes no sense

"In game theory, zero-sum describes a situation in which a participant's gain or loss is exactly balanced by the losses or gains of the other participant(s). It is so named because when the total gains of the participants are added up, and the total losses are subtracted, they will sum to zero. A good example of a zer0-sum game is Chess: it is impossible for both players to win."

Wikipedia

Tonight I attended the monthly meeting for Net Tuesday, a meet-up group hosted by TechSoup on the first Tuesday of each month. Net Tuesday events bring together social changemakers and web innovators to mix, swap stories and ideas, build new relationships, and reinforce the online NetSquared community. The group is mainly targeted at those of us interested in the conversion between non-profit projects and technology.

When I arrived tonight, the conversation was focused on planning strategies for the upcoming NetSquared Conference which is scheduled to take place, May 27th - 28th, 2008, in San Francisco, California. Participants in the conversation were discussing things like "how can TechSoup raise awareness of its services among Bay area non-profits", "how to disseminate best practices", and "how to solicit volunteer business and engineering consultants to help with the Conference".

These seem like thoughtful, relatively harmless questions. Indeed, some interesting comments emerged. What surprised me tonight, however, was the strong opinion voiced by a few attendees that in their experience the non-profit industry is one of rather fierce competition. I was then rather disheartened to learn of the strategies that these non-profits undertake to deal with this "competition".

One woman in the group, for example, mentioned that through her international non-profit work, she has come to believe that "we live in a world of scarcity, in which non-profits compete for donor dollars and foundation support." She continued by saying that non-profits do not collaborate or even speak to one another - even when they are at the same event. She explained that there is no incentive to share best practices, because to do so may result in receiving less of the "pie" of monetary support from donors.

Wow. Now, I'll admit that I come from the for-profit world. So, I'll take this gal's perspective at face value. But indeed, her comments are rather unsettling, and definitely a sad commentary on the state of mind of some non-profits. I mean, think about it:

An individual who is drawn to the non-profit sector, must at the core, have a rather strong philanthropic drive. Otherwise, why would they ever want to work for or start a non-profit? Afterall, we know that non-profits are not well-known for their competitive monetary compensation.

There has to be another incentive. For many, I would guess that this incentive is the "mission" of the organization - and the opportunity to contribute to something more "meaningful" than monetary objectives alone.

So, if individuals choose to work on non-profit projects for the purpose of achieving a noble goal - let's say "to end hunger", for example - then doesn't it make sense for them to make friends with other people who share the same passion and to find a way to join efforts or to in some other way support them in working toward the same goals? To not collaborate suggests that one group alone can create great social change without the help of anyone else.

I often find that best practices are a lot easier to find when looking at the for-profit world. I understand that there are differences between for-profits and non-profits. Still, in many cases, best practices in business are very applicable to non-profits as well.

Some great examples in the business world demonstrate how synergies between people can produce some amazing products and services. Think - Google, Hewlett-Packard, Yahoo, Microsoft, Ebay, YouTube. All of these successful companies emerged from what started as a founding team of two people, not one.

And these companies have grown, and grown BIG - through mergers and acquisitions of promising, yet smaller, organizations. Google's acquisition of YouTube, Microsoft's acquisition of Visio, and Ebay's acquisition of PayPal, are a few cases in point.

I imagine that many small non-profits do not see any benefit to merging with a larger, more well-endowed organization that shares the same objective. Heck, we see from tonight's meeting that some non-profits do not even want to help one another.

At times like this it is all the more important to remember the original purpose that led to the non-profit's creation in the first place. Hopefully the purpose was the "mission" of the organization, and not the founding member's desire to be able to tell their friends that they are "founder of XYZ.org".

From my perspective, what it comes down to is this: if you want to achieve something for the greater good of humanity, then you have to actively engage humanity to realize your goal. That means, you have to talk with people, reach out, and think about win-win ways in which you can collaborate to make both your and the other organization stronger. You have to be a leader by doing things differently, which includes taking bold action and perhaps - dare I suggest - teaming up with your "competition". We are talking non-profits afterall. Shouldn't the mission, the "cause", be the driver?

Zero-sum games may work if you are playing Chess - and you are the winner. But it certainly is not a successful strategy to pursue if you want to create social change. Through our connections and conversations with others, we learn, and grow. With the right teams of people, non-profits may even surprise themselves and find that by working together they are having a lot more fun to boot.