Thursday, April 6, 2017

Considerations for Collaborators

Many nonprofits are interested in increasing collaboration and “synergy” with other entities. However, collaborations take more than a casual approach. A great deal of resources from all sides must go into a collaboration to ensure its continued success. The initial choice of which organization to partner with is itself fraught, since the organization type (i.e. nonprofit, for-profit, public) significantly impacts the nature of the collaborative relationship.

One potential issue is related to the balance of power between the partnering organizations. If one partner wields the “power of the purse” and funding flows largely in one direction, this can create an unequal relationship. The party granting funds has a greater ability to set the terms of the agreement and to dictate future changes in the relationship. The grantor-grantee relationship is most common for government-nonprofit and nonprofit-for profit relationships since the government and private sector have greater financial resources. In the DSS-La Alianza partnership, DSS used its position as funder to try to strongarm La Alianza to change the nature of their partnership to serve DSS’s purposes. However, both parties must find advantageous ways to pool their respective resources in order to create value for the partnership as measured by resource directionality (Austin and Seitanidi 2016). The partnership should be mutually beneficial and entail joint decision-making (United Way Worldwide 2008). In the case of the Seattle referendum, both nonprofits brought something valuable to the relationship and were more or less equal partners. As a result, they created a cohesive message and voters approved funding for both the museum and housing initiatives.

Partnerships with government agencies carry both great possibility as well as great challenges. Through collaboration, government can find ways to get around bureaucracy and capitalize on the flexibility and ingenuity in the other sectors. At the same time, government can impose bureaucracy on other entities (e.g. service providers in the nonprofit sector). Additionally, collaborations with government may not be advantageous for all non-profits because government funding can be unreliable if political priorities shift. As in the DSS-La Alianza case, the government may choose to fund different programs, putting organizations in a lurch if they do not make the switch to the new program.

Nonprofits should also be concerned with associational value—the benefit to the organization from simply being associated with the partnering organization (Austin and Seitanidi 2016). Both sides should benefit from the association, but this is less likely in cases of nonprofit-government collaboration given public opinion which favors nonprofits over government agencies. However, small nonprofits may gain legitimacy from partnering with reputable government agencies (e.g. a nonprofit focused on scientific research and advocacy with a relationship with NASA). In La Alianza’s case, they would be collaborating with DSS, which had been called culturally insensitive and was interfering in family life to a degree La Alianza’s clientele could be uncomfortable with. The associational value to La Alianza was low, while DSS’s image would benefit from working with similar minority-run organizations. Similarly, the associational value of collaboration with for-profits depends largely on the company’s image. Popular companies can bring publicity to nonprofits, as in the Timberland case, but scandals can quickly change this. Before entering into a partnership, consider how the partnership will reflect upon your organization.

Regardless of the type of collaboration, unclear roles and expectations can create difficulties for the relationship. The blurring of roles in the Timberland case as the Timberland CEO became increasingly more involved created problems when both partners were struck with financial difficulties. When all parties take a deliberate approach to collaboration, especially in the strategic planning process, this issue can be avoided.

Austin, James E. and M. May Seitanidi. “Value Creation through Collaboration.” In Renz, David (eds.), Jossey-Bass Handbook of Nonprofit Leadership and Management. Hoboken: John Wiley & Sons, 2016.

Elias, Jaan. “Timberland and Community Involvement.” Cambridge: Harvard Business School. 1996.

Fortier, Suzanne. “Funding Seattle’s Art Museum and Low-Income Housing: The Politics of Interest Groups and Tax Levies.” Cascade Center for Public Service. 1996.

United Way Worldwide. “Best Practices Summary: Collaboration, Coalition-Building, and Merger.” 2008.

Varley, Pamela and Christine Lettis. “Partners in Child Protection Services: The Department of Social Services and La Alianza Hispana.” Cambridge: Kennedy School of Government. 1996.