Nonprofit organizations today face unprecedented economic, regulatory and competitive challenges, as they struggle to carry out their missions and realize their visions. One of the most important strategies they can utilize in this climate of uncertainty is collaboration.
Collaboration was one of the big buzzwords in the philanthropic world even before the economic crisis hit, as there has been concern for years about the rapid growth in the number of nonprofits across the country and the limited number of resources to support them. Even in better economic times it is best practice to collaborate. Now, for many organizations, it will be essential to their survival.
Effective collaboration promises a beneficial impact on organizations, resulting in less duplication and overlap of services, greater efficiency and effectiveness and better outcomes. Funders like to see collaboration among their grantees because it increases the likelihood that their dollars will be spent on higher-impact efforts.
Although it is one of those words we hear often, there are misconceptions about what collaboration really means. True collaboration is a mutually beneficial and well-defined relationship, in which two or more organizations work together to realize shared goals by sharing knowledge, learning and building consensus.
Collaboration can take various shapes. NESC has identified the following principal types, however there are many interpretations of how collaboration is achieved.
- Cooperation: requires little more than meetings and good faith; examples include informal information-sharing arrangements; tends to be tactical
- Alliance: strategic partnership in which organizations formally agree to change administrative or program processes; partners retain individual corporate structures
- Corporate restructure: partnership in which governance and legal corporate structure change; can take many forms including merger, consolidation, asset transfer, etc.
Although mergers are often thought of negatively in terms of hostile takeovers and acquisitions, a well-executed merger of two or more nonprofits with complementary missions and values may result in an organization that is more efficient and effective, and able to achieve much more than the individual organizations could have achieved alone.
Execution of a collaboration strategy is a labor- and time-intensive undertaking that requires board validation, frequent internal communication with the appropriate stakeholders, patience and sufficient funding. Each of the key stages of collaboration is pivotal. These stages are:
- Evaluation: clearly define objectives; identify and assess potential partners; engage in exploratory discussions; prepare MOU for board approval
- Negotiation: agree on terms; execute due diligence; draft and approve legal agreement
- Implementation: make it happen
Regardless of how comprehensively the participants collaborate, it is essential that they analyze, plan, communicate and implement with great care and discretion. The organizations’ clients, volunteers, staff, management, boards, funders and regulators expect it, and indeed deserve it.
To learn more about this subject, attend our free Collaboration Workshop on November 14, 2012. For more information about this event, click here.