I’ve been asked a number of times if not-for-profit data producers have an inherent advantage over for-profit data producers who may be selling similar or identical data. In fact, there are a lot of non-profits founded, at least in part, to build databases and disseminate them. 

 As just a few examples, you may already be familiar with GuideStar (now called Candid and a 2004 Infocommerce Model of Excellence award winner) that provides financial data on non-profits. It has other non-profit competitors such as Charity Navigator, ProPublica and even the Better Business Bureau. But this space also includes for-profit players such as Metasoft Systems too. In the educational world, non-profit GreatSchools (a 2007 Infocommerce Model of Excellence award winner) competes with for-profit players such as U.S. News and Niche.com. The further you dig into the world of data, the more non-profit players you find, often competing directly with for-profit data providers.

 So in head-to-head competitive match-ups, do non-profits have an advantage? In my experience, non-profits do have a number of advantages. Their primary one is in perception. Particularly when it comes to data collection, non-profits seem less threatening, they are viewed as neutral and independent, their need for data is rarely questioned, and many will supply data to non-profits because they feel they are helping out or supporting a cause. This warm and fuzzy perception extends to marketing and sales as well. Having seen it first-hand, I have no doubt that non-profits prefer doing business with other non-profits. There is a sense of shared purpose, and a belief that one non-profit won’t take advantage of another non-profit. Commercial data buyers won’t buy data from a non-profit simply because it is a non-profit, but non-profits will get full and equal consideration along with for-profit data vendors.

 But that doesn’t mean it’s easy going for non-profit data providers. As mission-driven organizations, many give away their data, limiting their revenue opportunity to such things as API access and customer datasets. Also, while non-profits like doing business with other non-profits, in part that’s because they expect whatever they get from another non-profit will be heavily discounted if not free. Selling against for-profit competitors, the non-profit is often at a disadvantage because it can’t as easily invest in the newest technologies and third-party datasets either because of resource constraints or because staying competitive begins to conflict with its own mission objectives.

On balance, I think that non-profit data producers do have a number of marketplace advantages, but these advantages are largely offset by marketplace expectations that non-profits must offer low-cost or free data, and competitive realities that make it hard to sell against a determined, for-profit competitor.