Short Takes
Selected new research by HBS faculty.

New Alliances: Forming For-Profit and Nonprofit Partnerships

Where once "corporate giving" meant writing an annual check to a favorite charity, more recently for-profit firms and nonprofit recipients have begun to join forces to better carry out their separate, but related, missions. When many of these relationships began to cross the line from traditional philanthropy to more strategic and mutually beneficial alliances, HBS professor James E. Austin, head of the School's Initiative on Social Enterprise (ISE), took note. "Here was a new arena," he says, "in which the goals of different kinds of organizations were very productively linked and in which significant value was being created, both for the collaborating nonprofits and for the businesses."

A 1997 ISE research forum at the School spurred Austin to delve more deeply into this phenomenon. Identifying a core group of five cross-sector alliances, he interviewed key executives on both sides of each partnership to document the process of their unfolding relationships. Austin's initial research corroborated his hypothesis that these alliances were creating value - for themselves and society - far surpassing what each party could do on its own. In addition, the research led to a survey of ten other alliances in his new book, The Collaboration Challenge.

Austin found that most of the partnerships he studied went through three stages of development he terms "the collaborative continuum." "Recognizing that relationships can evolve along this continuum, forward or backward," he says, "is a useful strategic tool for managers who are assessing what type of relationship they're in and considering if and how they should progress to the next stage."

In the first, or philanthropic, stage (which some partnerships skip entirely), the parties assume the traditional roles of "benevolent donor" and "grateful recipient." For example, urban community-service nonprofit City

Year began its relationship with Timberland, a maker of outdoor apparel and footwear, when City Year requested fifty pairs of boots for its youth service corps program. The second, or transactional, stage begins when the organizations start to regard each other as partners. For City Year and Timberland, this transition occurred when leaders of both groups realized they had similar visions of how to make a positive impact on society. By the third, or integrative, stage of a relationship, Austin notes, "resources from both organizations have been mobilized and meshed to create a new set of services, activities, and resources unique to that collaboration." His example is the 1995 pilot rollout of a new line of Timberland apparel called City Year Gear.

While Austin's research underscores the importance of ensuring a good fit between partners' missions, strategies, and values, this fit may not always be readily apparent. Consider, for instance, the alliance struck between The Nature Conservancy, the largest private owner of nature preserves in the United States, and Georgia-Pacific, one of the world's biggest forest products companies. The two longtime foes decided to join forces in 1994 to create a landmark agreement enabling both of them to manage some forested wetlands in North Carolina. "These organizations are combining their core competencies to devise a unique approach to resource and business management," says Austin.

Austin also found that leadership is frequently of paramount importance in the creation and development of cross-sector alliances. Strategic unions "need champions, or internal entrepreneurs (intrapreneurs), at high levels on both sides [who] largely determine the acceptance and vigor of the collaboration," he writes. Not all successful alliances, however, start from the top. For example, the CARE-Starbucks relationship began when a CARE regional officer bought a cup of Starbucks coffee and noticed that the two organizations did business in the same countries. A telephone call to a Starbucks official followed, and a short time later, their partnership development process began.

"Underlying the sustainability and power of a partnership," Austin emphasizes, "is the amount of value that's being created through the collaborative process." He also notes that "in cross-sector social-purpose collaborations, unlike commercial business alliances, an essential ingredient for strong leadership involvement is an emotional connection individuals make with the social mission and with their counterparts in the other organization."

Austin's hope for these new alliances is that "greater interaction will result in productive two-way learning: corporations can be enriched by finding out how nonprofits mobilize and motivate personnel, while nonprofits can learn more about marketing and financial management. As a result," Austin concludes, "we'll see the stark differences between nonprofits and businesses diminish, revealing a new world of integrated, rather than independent, sectors."

by Nancy O. Perry

(Adapted from the Fall 1999 edition of Working Knowledge, a publication of the HBS Division of Research.)

Finding Your Religion
by Scotty Mclennan
(HarperSanFrancisco)

When the faith of one's youth loses its meaning, there is no ingrained cultural habit of looking elsewhere," writes cartoonist Garry Trudeau in the introduction to Finding Your Religion: When the Faith You Grew Up With Has Lost Its Meaning. The book's author, the Reverend William ("Scotty") McLennan, Jr., was Trudeau's roommate at Yale and the real-life inspiration for his hard-working, ever-optimistic Doonesbury character, the Reverend Scot Sloan. A senior lecturer at HBS for the last nine years, McLennan teaches the elective course The Business World: Moral and Spiritual Inquiry Through Literature.

Finding Your Religion offers guidance and inspiration to people who may harbor negative childhood associations with religion or feel daunted by the seeming remoteness of religious institutions. It has particular relevance at a time when 30 to 40 percent of Americans switch religions during their lifetimes. A graduate of Harvard Law School and Harvard Divinity School, McLennan is a Unitarian Universalist minister and chaplain at Tufts University who has spent some thirty years researching the stages of spiritual development. The book represents a milestone in a lifelong personal spiritual odyssey, a process he likens to climbing a mountain with many paths to the top.

Richly anecdotal, the volume provides examples of spiritual journeys drawn from literature and the lives of great figures, such as Carl Jung and Mahatma Gandhi. It includes dozens of interviews with Tufts students, faculty, and alumni as well as McLennan's compelling descriptions of his own religious experiences during his travels around the world. McLennan outlines six specific stages of faith - magic, reality, dependence, independence, interdependence, and unity - that serve as markers to help readers find their own place in the seeking process and lead them to a religion that has meaning for them.

"Discovering our religion," McLennan observes, "should be an exciting, dynamic process that ebbs and flows with the seasons of our lives." His next project, in collaboration with Laura Nash of Harvard Divinity School, is a book on the role of institutional religion in helping businesspeople to integrate spirituality and work.

by Nancy O. Perry

Down to Earth
by Forest L. Reinhardt
(HBS Press)

In Down to Earth: Applying Business Principles to Environmental Management, Associate Professor Forest Reinhardt argues that managers should treat environmental management as an integral part of corporate strategy rather than merely as an exercise in public relations. "Social responsibility is often invoked in discussions about business and the environment," he writes. "I have been more concerned in this book with a manager's responsibilities to shareholders and to his or her own intellectual integrity."

Reinhardt asserts that discussions of business and the environment have become bogged down in a sterile debate about whether it pays to be "green," as though there were a categorical answer. "Of course, the answer is, 'It depends.' The appropriate environmental policies for a firm depend on the firm's circumstances: the basic economics of its industry, its position within the industry, its internal capabilities, and the strategy it has chosen." In Down to Earth, Reinhardt draws on studies of companies in industries as diverse as energy and packaged consumer goods to illustrate approaches for reconciling shareholder value with environmental performance. One such company, Switzerland-based Ciba Specialty Chemicals, reengineered its textile dyes so that its customers could reduce their use of other raw materials and their costs for end-of-pipe waste treatment. Ciba could then capture some of these cost savings.

Another example is the Ventura, California-based Patagonia sportswear clothing business. Inspired by its founder, mountaineer Yvon Chouinard, the company differentiates its clothing along environmental lines, using expensive organic cotton and polyester made from recycled bottles. Patagonia's margins shrank, but sales to its high-end retail clientele grew and, along with it, the association of the Patagonia name with quality.

Reinhardt reminds managers that social concerns about the environment will not go away and that the underlying conditions that made the environment relevant to business in the first place are intensifying. Down to Earth provides guidance to business leaders who must develop policies that satisfy consumer preferences and regulatory concerns without sacrificing a healthy bottom line.

by Jay Chrepta