Stories
Stories
Short Takes
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."
(Adapted from the Fall 1999 edition of Working Knowledge, a publication of the HBS Division of Research.)
Post a Comment
Related Stories
-
- 01 Mar 2024
- HBS Alumni Bulletin
The War Within
Re: Elizabeth Ames (MBA 1985); Elaine Klein (MBA 1985); Colin Greenstreet (MBA 1985); By: Janelle Nanos; illustration by Daniel Bejar -
- 29 Nov 2023
- HBS Clubs
A Holiday Benefit Dinner in LA; Seattle Club Revival Underway
By: Margie Kelley -
- 18 Oct 2023
- HBS Alumni News
Spreading the Words
Re: Shafiq Khan (MBA 1982); By: April White -
- 10 Aug 2023
- MassNonprofit News
Kraft’s Foundation to Combat Antisemitism Appoints Alumna as President
Re: Tara Levine (MBA 2001)