e-Newsletter: CNE Board Member Quarterly
Collaboration and Strategic Alliances
In today’s economic climate, many nonprofits are taking a fresh look at collaboration. With fewer resources and the need to increase efficiencies, the benefits and risks of various forms of collaborations or strategic alliances are an important discussion for the Board of Directors and executive leadership of any nonprofit.
Strategic alliances can be a means to stay viable and improve organizational performance. Alliances can range from informal partnerships, such as endorsements of other organization’s programs and co-sponsorships of programs or special events, to the more formal coalitions such as joint ventures, mergers or consolidations.
Organizations that have attempted strategic alliances, as well as the consultants facilitating them, seem to agree on one point – trust is the key factor in the success or failure of any alliance. And trust starts at home.
Before deciding if any type of alliance is in your nonprofit’s future, the organization’s leadership needs to have their own house in order. Have you conducted a board and organizational assessment recently? Is the leadership in agreement on the vision, mission and outcomes that define success? Are there elephants in the room that everyone knows about but nobody wants to challenge or discuss? Does your organization have an impending change in leadership – either executive or board – of an individual(s) who would otherwise be a key leader in the development of an alliance?
Consultant David La Piana says that “real collaboration is voluntary and nonprofits should come together because they perceive potential synergies, not because a funder encouraged them to do so.” Nonprofits that initiate collaboration discussions themselves are much more likely to follow through than if directed to do so by a funder, or just because they think the funder will be pleased.
According to Sid Gardner, Director of the Center for Collaboration for Children, successful collaboratives “are staffed and led by people who have a sense of urgency about outcomes and a keen sense of how to get things done.” The work of collaboration - and it is real work and takes a lot of time - must be given a priority by the board and executive leadership to be successful.
Some of the benefits of alliances include better programs, improved services, increased administrative capacity, and increased market share. Nonprofit collaborations, especially mergers, aren’t typically money-savers, primarily because nonprofits don’t usually reduce service delivery staff in the process, and staff is the major expense line for most nonprofits. However, there can be significant economies of scale, and increased efficiencies developed over time that do have financial benefits. Chief among these is reduction of duplicated (between two or more organizations) infrastructure costs, such as office space, equipment, staff training, professional and administrative services.
It is essential that nonprofits be willing to commit the time and resources to conduct due diligence - review of documents from each potential partners that will help to identify and analyze key issues prior to developing a formalized relationship. Again, trust is a key issue – all parties need to commit to open communication and full disclosure with each other while preserving confidentiality with regard to nonparticipants to the process. In addition, identifying the “deal breakers” early on is also critical. Understanding that building trust takes time and care is a key element, and the process for developing that trust a critical role for the board of the nonprofits involved.
Fieldstone Alliance’s work on collaboration uses “nimble” as a way to describe the need to have a dynamic process that includes quick decision-making to keep everyone involved. Their “Ten Principles of Resilience” include energetic support by the leadership of each participating agency; equity (not necessarily equality) of organizational power (how the little organizations can play with the big boys); willingness of each organization to make internal changes to adapt to the new structure/system; shared leadership; ability to manage conflict; transparency; accountability both internally (each organization) and externally (to the community); use of subgroups for appropriate decision-making (i.e. staff who deliver direct services get involved in those decisions); realization that collaborations are usually impermanent; and documentation supports resilience (written agreements spell out the vision, mission, and strategies of the collaboration and are changed as needed.)
Resources / Sources
This information is summarized from these resources:
1. Connolly, P. & York, P (2002), Pulling together: Strengthening the Nonprofit Sector Through Strategic Restructuring: Preliminary Evaluation Findings for the Strategic Solutions Initiative (1998-2001).
2. Kohm, A & La Piana, D. (2003), Strategic Restructuring for Nonprofit Organizations: Mergers, Integrations, and Alliances, Chapin Hall Center for Children.
3. Wasserman, Lanie. The Collaboration Learning Project and the November 9th Forum, Nonprofit Collaboration and Mergers: Finding the Right Fit Community Impact Manager, United Way of Greater Milwaukee. lwasserman@unitedwaymilwaukee.org