Get Cashin 2009

The need for your non profit is probably not self-evident to funders and readers of your business plan. Unless your organization exists to serve a need that erupted very recently, it is likely that other potential solutions for the need are in existence and currently functioning with some level of success.

Competitors in the Non Profit World
 
For a for profit, businesses that try to serve the same market need for products or services are considered competitors. They are studied, eyed warily, and finally fought in the marketplace for the same customers. This makes sense, as customers are either spending their money on your business or on your competitors, but not both.
 
For a non profit, you should not look at other organizations serving the same need with the same competitive mindset necessarily. If you do think this way, and succeed only in serving those who were previously served by another non profit organization, funders who look carefully will see that you produced zero net good for society. Actually, you have probably actually produced a net loss for society, as two organizations are now spending money fighting to serve the same individuals. This creates a situation where donors are putting in $2 to serve a need that previously cost $1 to serve.
 
Showing the Opportunity
 
Non profit founders need to look carefully at the other organizations serving the same professed need and consider if their non profit can do better. If you believe you can, you need to not only explain how, but to show why the current organizations cannot be improved to do so themselves. After showing that they are "broken" in some sense and that the only answer is to start over with your organization, you have proved a reason for your non profit's existence.
 
Alternately, you can show that existing organizations either do not have the capacity to serve the social need because of their limited size or scope, or that the level of need will soon rise beyond what can be handled by the current organizations. In either of these situations, you've shown that there is a clear opportunity for your non profit to step in and serve that overflow without being redundant.