(This post, written by Cynthia Bailie, director of the Cleveland office and special information initiatives at the Foudation Center, was originally published in PhilanTopic, a blog of opinion and commentary from Philanthropy News Digest.)
Show of hands please: Who thinks that nonprofit collaboration (the dreaded "c" word) is difficult and the "m" word (as in "merger") is best left unspoken? When I asked my Magic 8-Ball whether nonprofits could continue the all-too-typical avoidance of these important strategies, it replied, "Don't count on it." So I asked, "Is it true that joint programming, alliances, mergers, and other forms of collaboration are becoming more important than ever?" And it said: "All signs point to yes." Amazing. Even in the real world of nonprofits, all signs are pointing to an increased interest in this thing called collaboration -- and the need for nonprofits to get smarter about it.
That being the case, last year I decided to enroll myself in a class on mergers and acquisitions at Case Western Reserve University's Weatherhead School of Management, hoping to pick up some best practices from the corporate world that might be transferable to the nonprofit world. What did I learn? Well, as Lois Savage, president of the Phoenix-based Lodestar Foundation, wrote in a PhilanTopic post back in 2008, I learned that "while there is a wealth of information about collaboration in the business world, including case studies, models and how-to books, there is very little information about the unique realities of nonprofit collaboration."
Here are some other things I learned.
For-profit mergers, acquisitions, and alliances are not driven by a desire to rescue the asset-depleted and financially endangered. And that kind of rationale shouldn't apply in the nonprofit world either, where mergers and other types of nonprofit restructurings tend to be the option of last resort. Why would a financially sound, healthy organization want to assume the liabilities of a sinking organization? Instead, what if we adjusted our thinking on this issue and gave ourselves permission to look for partnerships with the potential to make our organizations stronger, better, more responsive to the needs of those we exist to serve and therefore more relevant? What if we gave ourselves permission to reach out to and enter into partnerships with our peer organizations and, yes, our "competitors" even before our funders suggested (or demanded) it? What would our sector look like if mergers, acquisitions, alliances, consolidations, and partnerships were the norm?
For much of the last fifty years, value creation in the nonprofit sector has been seen through the lens of organic growth -- that is, if we start a new nonprofit and begin offering needed services to our community, we've created value and are contributing to the quality of life for community members. That's true, but it's also true that there are likely to be many other nonprofits operating in the same programmatic space. With each going after the same donor dollars, potential employees, volunteers, and community resources, the infrastructure to support them is stretched thinner, even as the low barriers to becoming a nonprofit encourage the establishment of ever more nonprofits.
All of which begs the question: Would our communities be better served by a nonprofit sector that strengthens itself through a systematic, field-tested mergers-and-acquisitions/alliances program? And could the sector benefit from some rigorous thinking and research on best practices in this area? I believe it could, though I'm less sure about who should spearhead that process and who might create a toolkit enabling all nonprofits to participate.
Here's a starting place: the Lodestar Foundation's 2011 Collaboration Prize was recently launched by the AIM Alliance, the Foundation Center, La Piana Consulting, and other foundation and nonprofit leaders.
As a partner, the Foundation Center is pleased to be the new home of the Nonprofit Collaboration Database, which was developed as part of the 2009 Collaboration Prize competition. Providing real-life models and best practices for anyone seeking information about how nonprofit organizations are working together, the database contains fully searchable, detailed information about more than 250 collaborations nominated for the prize. Future iterations will include new examples from the 2011 Collaboration Prize competition, as well as other enhancements such as giving any nonprofit the ability to comment or submit its own collaboration materials. In addition, the center has developed a new information portal, Nonprofit Collaboration Resources, that offers podcasts, videos, reports, and links to case studies, initiatives, and other sites with information about how nonprofits are collaborating for the greater good.
The collaboration database and information portal are just two of the tools the center has developed or is offering to help level the playing field for all nonprofits, especially those that are under-resourced or struggling to battle through the economic recession. We're confident these new resources will contribute to the development of stronger and more strategic nonprofits while increasing their impact. And we remain committed to providing the data infrastructure and information assets that nonprofits everywhere have come to rely on.
So, if you have been avoiding the subject of nonprofit collaboration but are ready to take the plunge, we invite you to dive in, get informed, and free yourself up to think about the "c" and "m" words as additional tools your organization can use to strengthen its programs and expand its reach. As Foundation Center president Brad Smith recently commented in a post on PhilanTopic, "The way forward for all our organizations is through collaboration, competition, and 'coopetition'. We will need to get much better at not doing what is already being done by someone else and foundations will have to be more careful about encouraging (and supporting) unnecessary duplication. Along the way there will be mergers, alliances, and maybe even a few dogfights."
Is your organization considering a merger, acquisition, or alliance? Are you bracing your organization for some dogfights?! We'd love to hear about it -- and so would our readers. Use the comments section to share your thoughts.
-- Cynthia Bailie
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