In the early months of the economic downturn, many organizations considered the idea of collaboration. Many of our colleagues were open to the idea of strategic alliances ranging from shared back-office operations to full-blown mergers.
Yet in the Nonprofit Finance Fund’s 2010 survey of nonprofit groups, only 1 percent of the organizations actually reported having merged with another one. One conclusion is that it appears that the urgency for organizations to align themselves strategically has waned, although foundation funding to nonprofits continues to decline or disappear completely.
Anecdotally, in the communities I work with, collaborations have been minimal, if they exist at all. Perhaps organizations are waiting for foundation funding streams to reappear to pre-recession levels, negating the need for such collaboration. The truth of the matter is, funding as we knew it will not return to its glorious past. Organizations that do not seek to work closely with other groups only exacerbate the fragmented service-delivery system that prevents us from solving problems in our communities.
The lack of nonprofit strategic collaboration is not necessarily the fault of nonprofit leaders; they are occupied with other pressing matters. These leaders are managing organizations with diminishing resources, increased demand for services, and an understandable desire to serve as many people as possible.
One leader of an AIDS-serving organization in Atlanta told me, “We cannot turn away a client that comes to us because they have nowhere else to go.”
Nonprofit leaders are wired to get things done and are not necessarily focused on identifying new ways to structure their organizations to improve service delivery. This requires a different set of skills and the luxury of time for reflection and planning.
Further, as a foundation colleague told me, “many organization leaders have been trained to differentiate themselves from peer organizations as they compete for foundation funding.”
It would require a departure from the past if nonprofit managers should now view their peers as partners rather than competition.
The funding community can encourage changed behavior on this front. How many times has a nonprofit leader had to articulate her organization’s uniqueness to a program officer during the 60-minute update meeting, where an invitation to apply for a grant is the goal? This should stop.
Perhaps foundation program staff members, who know their grantees and communities intimately, should begin identifying and sharing what they observe as promising possible partnerships among nonprofits. This may be considered risky by some as foundation staff members resist “directing” organizations. However, with economic uncertainty here for a long time, if not now, then when? And if not from foundations, then where?
We need conversation starters and skilled intermediaries to help organizations recognize and realize new possibilities.
Nonprofit leaders also need a safe space and time to engage peer organizations in a new way.
Finally, we need capital to move organizations from conversation to execution. To our knowledge, there are three funds—created either by shared pools of foundation money or by single foundations—that assist organizations with the capital necessary to align strategically. It is clear that we need more than three funds if nonprofit organizations are going to get serious about reducing inefficiency and producing strong results.
6 Responses to Finding Incentives for Nonprofit Collaboration
hildyg - September 29, 2010 at 3:25 pm
Thank you for this, Garvester! Some random thoughts as I read, in no particular order.First, it is easier for foundations to encourage collaborations when they have actually experienced those structures themselves. Sadly, we see a lot of Do-as-I-say-not-as-I-do when it comes to funders and meaningful collaboration.The reason this is detrimental goes beyond merely walking the talk. The reality is that when things go wrong, funders cannot guide from personal experience about what works, and therefore wind up advising based only on what they speculate should work. The result becomes prescriptive, rather than everyone learning together.There is also the issue of why collaboration is important in the first place. When collaboration is rooted in what is possible rather than a place of fear and scarcity, success is more likely. When the motivation is not “We could save so much money!” but instead, “We can accomplish so much more together than separately,” change happens smoothly and gracefully and logically.There is tremendous potential for sharing resources in innovative ways, aimed at the greater impact of what is possible when we all work together. In our experience, that atmosphere of potential shrivels and dies when it is all about survival and scarce resources.Thanks again for raising the issue!Hildy Gottliebhttp://www.CreatingTheFuture.org
bill_miller - September 30, 2010 at 3:28 pm
The issue of collaboration is complex for all the reasons the article points out. Funders need to share some of the responsibility for the multitude of nonprofits that currently exist. Over the years, I have watched funders repeatedly encourage people with fresh ideas to launch their own organization, rather than join an established one. Often foundations and corporate donors establish grant limits and the result is that a larger organization can be at a disadvantage as compared with two smaller organizations doing similar things. If funder really want to encourage collaboration, they need to help finance the initial costs of bringing about a merger and they need to provide a financial incentative to the new organization. If the economics of collaboration and mergers was really positive, many nonprofits would respond despite the complexities of merging missions, founders egos, constitutencies, etc.
jgeberle - September 30, 2010 at 3:28 pm
Thanks Garvester. I really appreciated reading this article as we are still learning about how our foundation can encourage and support collaborating organizations. I also appreciated the wisdom from Hildy. About a year and a half ago we created a Strategic Partnership Fund to assist organizations with everything from joint programming to all-out mergers. The fund is managed by a Strategic Partnership Work team consisting of representatives from four foundations and some active community leaders/members. The fund makes grants of up to $25,000 to organizations that have made a commitment to collaborate or partner is a formal manner. Costs associated with making that happen (legal, accounting, consulting, etc.) are supported, along with any other expenses that can make the efforts work (post MOU/Affiliation/Merger needs). The emphasis has been to create and support new synergies (program or system innovations) – opportunities to enhance services, while also saving on some operational expenses. It’s a work in progress and we are thrilled to learn with our many partners through this process. We don’t have all the answers, but have enjoyed seeing some early successes of those courageous leaders that have done this work in our community.Thanks again,John G. EberleVice President, Grants and Community InitiativesCentral New York Community Foundationhttp-://www.cnycf.org
richardmarker - October 1, 2010 at 8:32 am
There are numerous overlapping issues which Mr. Kelly raises – some of which are addressed above. A few bullet point comments:1. Both the funder and non profit world are characterized by “competition”. It is quite correct that funders are as guilty of this as n-f-p’s. While this may encourage creativity, it also works against open collaboration. As suggested above, how does one encourage open and honest collaboration when organizations perceive [correctly most of the time] that they are in competition for limited funds with the very organizations they are asked to collaborate with.2. Most organizations are not culturally prepared for genuine collaboration. What seems evident to funders stumbles on the details of decision making, style, priorities, organizational history, and board differentiation – to say nothing of organizational practice. If organizations are reluctant, it may be because so many collaborations have fallen apart.3. The underlying question t all of this is “is collaboration inherently superior?” Much of the pressure to collaborate has been driven by a push for efficiency rather than improved effectiveness. But who is to say that bigger is better or that particular stakeholders are better served by a merged or collaborative model? Bigger is not necessarily better; smaller is not necessarily worse; scale is not necessarily desirable. So the issue is “collaboration for what?” It is hard to argue against the efficiency of ‘back office’ collaboration; direct service requires much deeper assessment. 4. This is no inherent conflict between encouraging start-ups as a way to innovate and experiment and at the same time encouraging appropriate collaborative models. The agility of start-ups is a superb way to test out new ideas without the long term planning and consensus process which characterizes most established nfp’s. And if they end up being wiser or more effective than the established groups, they deserve to supplant them. There is room within a funding portfolio for both.5. In general, it is probably better for collaborations to be tried on a small scale at first to develop self understanding and mutual trust before large scale institutional commitments. I fully concur that funders often don’t walk the walk; if they did, they would appreciate the courage and commitment demonstrated by the comments of Mr. Eberle.R. MarkerSenior Fellow and Chair, NYU Academy for Funder EducationandCo-principal, Marker Goldsmith Philanthropy Advisors
81154412 - October 1, 2010 at 12:10 pm
Collaborative programming makes sense only if it can result in improved and seamless services to the consumer. Collaboration is damaging when we have to tell a client, “You can benefit from this project, but to get this particular part of the service you must go to another organization, in another building, on a different bus route. And you’ll have to fill out a new set of paperwork because they need to maintain their own data.” Unless both the intent and actual result of collaboration is to provide better services for the consumer, it’s a waste of effort.
stevenbert - October 19, 2010 at 6:52 am
The reason this is detrimental goes beyond merely walking the talk. The reality is that when things go wrong, funders cannot guide from personal experience about what works, and therefore wind up advising based only on what they speculate should work. The result becomes prescriptive, rather than everyone learning together.There is also the issue of why collaboration is important in the first place. When collaboration is rooted in what is possible rather than a place of fear and scarcity, success is more likely. When the motivation is not “We could save so much money!” but instead, “We can accomplish so much more together than separately,” change happens smoothly and gracefully and logically.Often foundations and corporate donors establish grant limits and the result is that a larger organization can be at a disadvantage as compared with two smaller organizations doing similar things.
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