Competition with a Common Purpose

Abstract

Non-governmental organizations often compete for funding while valuing similar social outcomes. Fundraising may expand total giving to a cause or redirect a given funding pool toward the focal organization. This paper studies how cross-organizational purpose alignment changes the composition of such competition. The analysis separates two effects of fundraising: marginal \emph{lift} in aggregate funding and marginal \emph{shift} of funding between organizations. Incomplete alignment creates a wedge between an NGO's marginal mission return and the aggregate mission return that is proportional to shift minus lift. When NGOs choose among fundraising technologies, greater purpose alignment shifts effort toward the relatively lift-intensive technology. Relative to the aggregate mission benchmark, incompletely aligned NGOs choose portfolios that are too shift-intensive. A uniform restriction on fundraising may change total effort but cannot generally correct this composition distortion; correcting the portfolio requires changing relative incentives across technologies. A simple microfoundation interprets cause promotion as lift and organization promotion as shift. Productivity differences preserve reallocation when it raises mission output, while organization-specific benefits restore rivalry even under complete alignment. The model therefore predicts how a common purpose changes the form of competition even when its effect on the level of competition is ambiguous.