Nonprofits have a long and proud tradition of collaborative work. Like most traditions, it is rooted in necessity. Public problems, by definition, extend beyond the reach of any individual organization. Any broader public goal—such as improving educational outcomes, reducing homelessness or improving air quality—requires the coordinated efforts of many. This kind of interdependency is a defining characteristic of the sector and a driving force behind the wide variety of partnerships that flourish among nonprofits. In fact, one could argue that being “nonprofit-like” requires being collaborative.
During the last decade, many nonprofits have felt greater pressure to enter into joint ventures, alliances or other types of structured partnerships in the name of greater efficiency. During this same time period, for-profit institutions have been forming partnerships and alliances at a remarkable pace. This private sector trend of alliance building has had a spillover effect on the expectations placed upon the nonprofit sector.
In the general discussion on being businesslike versus being nonprofit-like, much is made of nonprofits not facing the same type of “bottom line” that businesses do. This affects the dynamics of nonprofit collaboration too. Some forms of nonprofit partnerships do have a bottom line—it is easy to measure the cost-savings, for example, of sharing office space or consolidating administrative functions. The benefits of these types of partnerships are direct and even “bankable.”
The benefits of programmatic partnerships, however, are rarely so direct. For example, consider a situation in which three environmental organizations work together to implement a river clean-up and restoration project. Even if the project is successful—if the water quality improves and the restored habitat draws back native species—these outcomes will likely benefit the broader public (and native species!) as much as the participating organizations.
Far too often, nonprofit outcomes are “bankable” only if they enhance the reputation of the organizations involved. An organization’s success depends on large part on its public reputation, which has a tremendous effect on volunteer and board recruitment, fundraising, and other factors necessary for a vibrant organization. Even the most mission-driven nonprofits cannot afford to overlook the importance of seeking credit for their contributions. Orchestrating collaborative work among diverse organizations that all need to gain some individual credit for success is a tremendous challenge.
This is not to suggest that partnerships are harder in the nonprofit sector, simply that the bottom lines and challenges are different. The truth is, effective partnerships are hard to form, no matter what sector (or sectors) are involved. For proof, look at the trendsetters: research suggests that approximately two-thirds of all corporate alliances fail. Yet most large corporations—those that are driving the “alliance revolution” in the private sector—can afford failure. In fact, alliances are one strategy that corporations use to manage risk. Companies often form alliances to pool resources in order to develop new products or enter new markets, thus cutting their losses if an endeavor should fail.
Most nonprofits, on the other hand, cannot afford to enter into alliances that fail. They simply don’t have the resources to invest in unproductive endeavors. So while the cooperative spirit of the nonprofit sector can and should be used as a foundation for more intensive forms of partnerships, nonprofits should proceed cautiously, think strategically and be willing to turn down partnering opportunities.
Betsy Hubbard is a former program officer at The Pew Charitable Trusts, where she was involved in both successful and unsuccessful partnerships. She is currently a free-lance consultant and can be reached at ([email protected]).