From the Answer Desk: What Do I Need to Know About Collaboration?

(In yesterday's post, we suggested that while the worst of the economic storm may have passed, the nonprofit sector can expect heavy weather for the next year or two. In this post, Katie Artzner, the Foundation Center's online librarian, pulls together some terrific resources for nonprofits contemplating a merger or collaborative enterprise. Katie's post was originally posted on our Philanthropy Front and Center-Cleveland blog.)

Q: In the current economic climate, nonprofit organizations are being urged more than ever to work together in new and creative ways. Why?

A: Demand for services is up along with competition for financial resources, making the drive toward efficiency increasingly important. Duplication of services is viewed as wasteful. Strategic alliances, like collaboration, are equated with cost-savings. And the complex issues that nonprofits address are presenting themselves on a grand scale, calling for scaled-up solutions.

Gaining a basic understanding of the types of strategic alliances is a good first step in determining a fit for your organization. There's general agreement that the types of strategic alliances follow a continuum, from those that are informal to those that require high levels of intensity, complexity, and formality. The following types are based loosely on the work of Dr. John Yankey, Ph.D., emeritus professor, Case Western Reserve University:

• Endorsement: Providing approval or support of a concept or action already conceptualized or completed by another organization (letters of support).
• Co-sponsorship: When two or more organizations share (although not always equally) in the offering of a particular program or service.
• Affiliation: A loosely connected system of two or more organizations with a similar interest(s).
• Federation/Association: An alliance of membership organizations established to centralize common functions.
• Coalition: An alliance of independent organizations that usually share a political or social change goal.
• Consortium: An alliance of organizations and individuals representing customers, service providers, and other agencies who identify themselves with a specific community, neighborhood or domain.
• Network: An alliance of organizations that share resources for mutual benefit such as service provision.
• Joint Venture: A legally formed alliance in which member organizations maintain joint ownership (generally through a joint governance board) to carry out specific tasks or provide specific services.
• Acquisition: An alliance in which an organization acquires a program or service previously administered by another organization.
• Divestiture: When one organization "spins off" a program or service to another organization.
• Merger: When one organization is totally absorbed by another.
• Consolidation: When two organizations combine to form an entirely new organization.

Based on the work of Michael Winer and Karen Ray (Collaboration Handbook: Creating, Sustaining, and Enjoying the Journey) and David LaPiana (Nonprofit Mergers Workbook), the Fieldstone Nonprofit Guide to Forming Alliances uses these categories:

• Cooperation: Informal arrangements and relationships with no change in organizational structure of participating entities.
• Coordination: More formal arrangements and relationships that focus on specific programs or projects and are accompanied by plans and a shared mission.
• Collaboration: Longer-term, formal arrangements and relationships where separate organizations are brought into a new structure with a shared mission.
• Merger: An arrangement in which two organizations become one.

The resources below are excellent places to start to learn more about the costs and benefits of strategic alliances.

Collaboration -- Fieldstone Alliance
Provides free access to useful articles and tools related to planning nonprofit collaborations.

"Collaboration Strategies for Nonprofit Organizations" -- Curtis Thaxter LLC
Briefly examines the preliminary questions that all nonprofit organizations should address before engaging in a collaborative effort and outlines collaboration strategies available to nonprofits.

Managing Collaboration Risks -- Nonprofits’ Insurance Alliance of California
Explores the kinds of collaborative relationships that nonprofits typically engage in and how to manage or avoid the risks associated with them. Published in 2002; 18 pages, PDF.

"The Reality Underneath the Buzz of Partnerships: The Potentials and Pitfalls of Partnering" -- Stanford Social Innovation Review
Shares findings from a study of nonprofit partnerships and examines why most failed to fulfill participants' expectations. Published: Spring 2005.

In addition, the following print publications can be found at Foundation Center libraries:

• Forming Alliances: Working Together to Achieve Mutual Goals by Linda Hoskins and Emil Angelica
• Uniting for Survival by Don Haider
• Time to Merge? Fundraising and Financial Implications by Priscilla Hung

Still have questions? Ask us.

-- Katie Artzner