A recent survey of nonprofit organizations performed by the folks at BDO revealed that only 11% of nonprofits surveyed are likely to consider strategic partnerships with other nonprofits and only 5% are likely to partner with for profit organizations. Considering the funding challenges facing the nonprofit sector, these numbers are surprisingly low. What is stopping nonprofits from exploring these partnerships and why should they overcome their fears?
Follow this link to download the BDO Survey
Thinking About Perceived Risks and Opportunities
There are plenty of concerns associated with partnerships, such as;
- Will the partner use the relationship to its advantage and our disadvantage?
- Does partnering with an organization expose our nonprofit to their issues?
- What happens with our strategic needs diverge?
- How can there be alignment with a for-profit enterprise since they are only focused on the bottom line?
There are many other potential issues, however, the benefits should be considered as well. Risk Leadership is the process of considering what is best for the organization as a function of increasing opportunity in concert with managing risk. So, some of the benefits of partnerships include;
- Combining resources and experience to pursue larger opportunities.
- Having access to different skill sets to broaden the scope of potential opportunities.
- Creating critical mass to show a funder that capacity exists to deliver.
- Exposure to new ideas and best practices.
Ultimately, nonprofits need to weigh the benefits and risks to decide if strategic partnerships are right for the organization.
Four Types of Strategic Partnerships for Nonprofits
Partnerships can come in all shapes, sizes and styles, however, for nonprofits there are four that are generally worth exploring;
- Nonprofits with Similar Missions, but Different Location
- Nonprofits with Different Missions, but Similar Funders
- Nonprofits that provide Complimentary Services
- Partnerships with For Profit entities
Similar Missions, Different Location
Nonprofits often start in one location and grow from there. In some cases, an umbrella organization coordinates numerous small regional nonprofits segregated by location. In either case, nonprofits can benefit from working with their neighbors. These types of partnerships can allow the nonprofits to focus larger amounts of resources toward a funder that spreads money across both partners’ regions. In addition, the nonprofits can gain from consolidated spending when dealing with vendors and can consider joint events to build public consciousness for the cause.
Different Missions, Similar Funders
With the shift from output to outcomes and impacts, nonprofits are finding it challenging to cope with the broadening requirements from funders. Many smaller nonprofits cannot provide the range of services necessary to demonstrate outcomes and impact. This is because very few issues addressed by nonprofits have a single cause and fewer can be resolved with a single solution. Partnering with nonprofits that have different missions can address multiple causes of a problem. For example, if a funder wants to impact homelessness or underemployment, there may be several nonprofits addressing different underlying causes. Real progress on impact can only happen if those nonprofits are willing to work together. Unfortunately, due to their own resource limitations, funders are becoming less likely to fund multiple, small projects, opting instead for larger, consolidated projects.
Nonprofits with Complementary Services
Similar to the prior example, nonprofits may address different aspects of the same issue. In these cases, a strategic partnership may provide the client a “one-stop” approach. For example, some nonprofits focus on disease prevention and others on managing and caring for those impacted. There is a natural connection, however, it is seldom forged between organizations. As a result, the client must seek help from different providers and may slip through the cracks. A very simple style of strategic partnership, such as joint marketing or a referral process may help both nonprofits and provide a better service net for the client.
Partnerships with For Profits
The data that only 5% of nonprofits are even considering such partnerships is one of the most surprising from the BDO survey. For profit entities can be resource powerhouses and have capabilities far in excess of many nonprofits, specifically in the areas of marketing, communications and procurement. Many corporations are looking for ways to increase their exposure as “good corporate citizens” and that is an opportunity that nonprofits need to exploit. For profit organizations also have a wealth of human resources from staff to leadership that can become a volunteer pool for the nonprofit. Lastly, for profit organizations are far less likely to restrict funds by placing limitations on indirect costs, etc. If the for profit see value in a project, they simply are not going to meddle in how its partner allocates its funds.
Strategic partnerships are not easy, they require effort, focus and clear expectations for all parties involved. The best partnerships can be long lasting and evolve over time to benefit all sides, but they should not be forced to continue beyond their optimal usefulness.
For profit organizations are regularly asking themselves, what can we do well and what do we need help to do well. Large nonprofits are already following this course and have been for quite some time. Strategic partnerships are often the answer for those capability gaps. Unfortunately, many nonprofits cling to the idea that they can fix their own issues themselves and as the BDO survey suggests, they do not consider strategic partnerships as a tool. This needs to change.
Does your organization utilize strategic partnerships? If so, please share your thoughts, pros and cons, in the comments section.
About the author:
Michael F. Cade is a nonprofit advisor and executive coach, taking the nonprofit sector Beyond the Numbers. He is a leadership pathfinder, helping nonprofits optimize operations and strategy to attain long-term viability and relevance. His Framework for Fiscal Sustainability is an innovative approach for evaluating organizational health and securing the ongoing ability to deliver on its mission.
Mr. Cade publishes the nonprofit leadership blog Not for Profit Beyond the Numbers
If you have questions or would like a consultation on a nonprofit leadership or operational issue, contact him at: firstname.lastname@example.org