Value Chain in the for-profit sector vs Project Cycle and Fundraising in the non-profit sector

While working in a paper comparing strategy theory and practice in the for-profit vs the non-profit sector I came to the following reflection that I wish to share and hopefully to get constructive comments about it.

For-profit organizations have as their core mission to generate profit through the production of a product or service, for which their receive money in exchange. This is done following a value chain (Research and Development -> Manufacture -> Marketing -> After-service) that transforms inputs into more valuable outputs, and over this framework every company bases their strategy as a way to achieve this in a more efficient way. There are some support activities that allow the for-profit organizations to perform this value activities (such as managerial activities)

Non-profit organizations have as their core mission to make a change based in some ideological premises. To do this they follow the project cycle (Identification of a problem -> Preparation -> Appraisal -> Negotiation -> Implementation and Supervision -> Evaluation and Feedback) which seeks to find and implement the best way to solve a problem (the nature of the problem depends on the ideological perspective followed by the organization).

Every non-profit organization follows the project cycle to achieve their mission, they have a second objective which is the survival which depends on get support to the organization. In theory securing support for the organization would depend on being efficient in creating impact which would bring support from actors supporting their ideology. In reality, this doesn´t happen automatically which require activities outside of the project cycle to get this support (fundraising campaigns, marketing of the results, etc.).

These "extra activities" are not part of the "core activities" of the organization, they are needed for their survival. In some cases these extra-activities might even create conflict with the core activities of the organization leading a non-profit to ethical decisions and probably forcing non-profits to balance their actions between conflicting interests.

A further interesting perspective comes from analyzing competition in this context. While the extra activities have the goal of getting the biggest possible proportion of a scarce (in the economic sense) pool of support (funds, resources, volunteers, etc.), the core activities of the non-profit deal with aspects that doesn´t necessarily face competition (if the change your non-profit is aiming for is made by a different organization, still the non-profit fulfills its mission). The competition in this core activities lies at the ideological aspect in terms of which is the impact that should be done, or what is the best solution to a give situation. Competition in the extra-activities can be compared to competition in the for-profit sector as they compete for a scarce good, competition in the core activities lies complete outside of this discussion.

So if a parallelism between the activities of for-profit and non-profit is made, perhaps it can be made in the following way:

• Research and Development  => Identification of the Problem, Preparation (design of the solution), and Evaluation and Feedback (partially)
• Manufacture => Appraisal (sharing the proposed project to get stakeholders acceptance), Negotiation, Implementation and Supervision
• Marketing => Fundraising campaigns and other public relations activities aimed to secure resources
• After-service => Evaluation and Feedback (partially) from the core activities perspective; public relations activities aimed to raise the status of the organization from the extra activities perspective

A key point of conflict for non-profit organizations lies in linking the outcome of the "Manufacture" with the goals of the "Marketing" since they serve to different goals. This may well be a crucial element in the strategy of a non-profit to guarantee its survival and grow while achieving its mission.