11 More Success Factors: Strategic Partnerships Between Nonprofits and For-Profits

Part Two:  Nonprofit Perspective

Nonprofit organizations work tirelessly to aid the communities they support, but often find themselves lacking the resources needed to succeed.  For-profit companies maintain a laser focus on delivering results but can yearn for the corporate satisfaction of contributing to something greater than the bottom line.  A natural solution to both issues is a strategic partnership between for-profits and nonprofits.

Part one of this series focused on what the for-profit partner needs to display and deliver in the planning and execution of a strategic alliance.

Nonprofits face challenges from both inside and outside of the organization due to perceptions about interacting with for-profit companies.  The nonprofit must address these real or perceived issues for the strategic partnership to find success. The work begins long before the partnership is established and must continue throughout the arrangement and beyond. 

Nonprofit Company:  Accept & Act

Accept For-Profit Motivations

We’ll start with the biggie. When approaching a strategic partnership with a for-profit, expect that the for-profit’s motives have something to do with profit.  Nonprofits’ mission is the prime motivator, for-profits’ mission is increasing shareholder value.  So, nonprofits need to leave suspicion at the door by asking the for-profit up front about their expectations and desires.

As a corollary, nonprofits need to get off their high horse (or is it “high unicorn?”) about profit motivation.  There is a conceit within some nonprofit organizations that profit is an inherently bad thing and that for-profit and nonprofit organizations cannot work together effectively because nonprofits are good, and for-profits are evil. 

Successful strategic partnerships require some level of genuine understanding and entering into them with bias and suspicions is a great way to ensure failure.

Increase Your Velocity

Nonprofits often tend toward taking deliberate, well-considered action. Right is better than fast, and no decision is better than the wrong decision.  This can be the result of unclear lines of authority or strict limits on authority delegation and both are issues that need to be addressed.

The fact is that for-profit companies will want to move faster, want those involved in the project to have greater autonomy and want responsiveness to change course nimbly when new information or issues arise. 

Nonprofits need to find ways to allow for flexibility and autonomy for the strategic partnership.  To do so, consider establishing some higher authority levels or fast-tracked approval processes for decisions related to the strategic partnership.  For example, set up a temporary Board committee with responsibility and authority for project decisions. 

Embrace Evolution

A sweeping generalization that is not terribly inaccurate is that for-profits are more accustomed to rapid change.  The commercial marketplace tends to be fickler than government agencies and other funders of nonprofits, at least in the short-term.  So, nonprofits need to be prepared for the strategic partnership to change over time and a pace faster than they are used to.  The for-profit partner will likely be assessing the project regularly and looking to make course corrections or even major shifts.

This is an opportunity for the nonprofit to observe the for-profit’s planning and execution processes, so the nonprofit should invite the partner into their strategic planning processes and ask to be part of theirs.  Limitations will apply, but being aware of each other’s planning can uncover new opportunities for widening or deepening the partnership.

At a minimum, the nonprofit needs to inform the for-profit partner of changing needs in the nonprofit’s service community.  This will allow the for-profit to consider how they can evolve the partnership and fulfill longer-term needs.

Align Strategic Partnerships with Development Activities

Strategic partnerships are tough to start and maintain, so the nonprofit needs to establish a pipeline of potential for-profit partners and that is best done via the development function.  Development personnel, leaders and Board members should all be responsible for finding potential partners and projects.  The methods for growing these relationships is similar to the way that the development team builds other relationships, so they have the necessary skills.

The development team should identify current and future funding gaps and consider creative ways to fill them. Strategic partnerships are big effort for big results, so focus on projects with significant size and scope and build contacts and relationships in the right corporate spaces.

Be Prepared and Be Clear About What You Need

When approaching a for-profit organization, you should have already built relationships within the company’s leadership team.  Gain an understanding of their needs and capabilities.  Think of it like a job interview and do your research.

Put on your storyteller hat and ponder how the for-profit will benefit from the partnership.  Don’t rely on good public relations as an encouragement, find concrete benefits such as broadening their brand awareness, addressing a target segment or aiding in the rollout of a new product or service. 

Also, build a solid assessment of your needs to limit ambiguity in your proposal.  The proposal should not be a request for funds, but a broad project that takes advantage of the for-profit’s skills, capabilities and differentiators while addressing its needs. 

Strategic partnerships are about win-win scenarios, so get creative on how both organizations can gain from working together. 

What to Ask for Beyond the Money

  • Engagement – cross learning opportunities, leadership sharing, future Board members
  • Expertise – best practice sharing
  • Relationships – vendors, negotiated pricing, trade or other associations
  • People – volunteered time outside of project
  • Publicity – beyond scope of project, thought leadership
  • Feedback – on project management, interpersonal and leadership skills

Push the Boundaries

Most for-profit organizations are not driven by providing shareholder value, but by increasing shareholder value.  They look for growth constantly because the “grow or die” mentality is deeply seated. 

Consider that mind-set as an opportunity and discover ways to broaden and deepen the strategic relationship.  The more connection points between the organizations, the more resilient and flexible the relationship will become. Also, the more dynamic the partnership, the longer it will likely continue.

Establish an Advocate

As with any partnership or major project, accountable leadership is required, but in addition, this leader will need a resource to advocate for the project within the organization.  This person is tasked with uncovering early stage issues related to cultural and communications-related differences.  The advocate ensures that every stakeholder in the project learns the value that the partner brings and is able to interpret discussions and actions without filters and bias.

Do Your Research

For-profit companies can be complex with multiple related or owning entities.  They may also be privately owned with very little publicly available information.  Check that for-profit doesn’t have practices, related companies or partners that could be viewed negatively by your donor base. 

Communicate Early and Often

These types of partnerships benefit from exposure, so design opportunities for early wins and regular updates or milestones in the project.  Internally, build communications plans that clearly define value, expectation and success factors.  Tailor those communications to stakeholders, employees, donors and other interested parties.

A project staff member should regularly monitor the partners’ websites, press releases and social media for any topics that could impact the other partner.  Once the partnership is established both organizations can determine what needs to be communicated to the partner before release.

Be Patient and Willing to Teach (and Learn)

Most for-profit leaders and employees will not have direct experience with the operations and culture of a nonprofit.  Prepare at all interaction points for initial resistance and communications challenges and help for-profit personnel understand the nonprofit environment and the commitment of those involved.  Encourage all of the program staff and leaders to get to know their for-profit counterparts and look for ways to learn from each other.

Bottom Line

Strategic partnerships between for-profit and nonprofit organizations can yield incredible results.  They can act as a force multiplier and increase exposure for the nonprofit and can energize the for-profit’s workforce and corporate reputation.  These arrangements work best when they are true partnerships, where both sides understand the expected value for both organizations.  Success comes when everyone involved is flexible, respectful and open to learning and innovating.

These partnerships can be a lot of work, but the rewards can be large on both the professional and personal level.  Done well these partnerships can be successful for the organizations involved and at the same time rewarding and enjoyable for the team members engaged.

About the author:

Michael F. Cade is a nonprofit leadership pathfinder, guiding nonprofits Beyond the Numbers to solve problems, optimize operations, execute strategy and ultimately attain long-term viability and relevance.  His Framework for Fiscal Sustainability is an innovative comprehensive evaluation tool for assessing organizational health and ongoing mission readiness.

Mr. Cade has been an executive coach for over 18 years working with leaders from for-profit and nonprofit organizations.  He specializes in facilitating executive advancement and transitions and strengthening leadership competencies.

Mr. Cade speaks on nonprofit leadership and strategy topics, and has authored articles, guest blogs and podcasts. He publishes the nonprofit leadership blog  Not for Profit Beyond the Numbers

If you have questions on this or other nonprofit leadership issues, contact him at:  mfcade@nfpbeyondthenumbers.com

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