In the current economic climate, nonprofit organizations are being urged now more than ever to work together in new and creative ways. Why?
- Demand for services is up, along with competition for financial resources, making the drive towards efficiency increasingly important.
- Duplication of services is viewed as wasteful.
- Collaborations are equated with cost-savings.
- The social issues that nonprofits address are larger and more complex and call for scaled-up solutions.
Understanding the types of strategic alliances is a good first step in determining a fit for your organization. There’s general agreement that the types of strategic alliances follow a continuum. At one end are informal arrangements. At the other end are those that require high levels of intensity, complexity, and formality.
The following types are taken from the work of Dr. John Yankey, Ph.D., retired professor, Case Western Reserve University:
- Endorsement: Providing approval or support of a concept or action already conceptualized or completed by someone else. Example:letters of support.
- Co-sponsorship: Two or more organizations share (although not always equally) in providing a program or service.
- Affiliation: A loosely connected system of two or more organizations with a similar interest(s).
- Federation/Association: An alliance of member organizations established to centralize common functions.
- Coalition: Independent organizations that usually share a political or social change goal.
- Consortium: Organizations and individuals representing customers, service providers, and other agencies who identify themselves with a specific community, neighborhood or domain.
- Network: Organizations that share resources for mutual benefit, such as service provision.
- Joint Venture: A legally formed alliance in which member organizations maintain joint ownership (generally through a joint governance board) to carry out specific tasks or provide specific services.
- Acquisition: One organization acquires a program or service previously administered by another organization.
- Divestiture: One organization "spins off" a program or service to another organization.
- Merger: A statutorily defined alliance in which one organization is totally absorbed by another.
The Fieldstone Nonprofit Guide to Forming Alliances uses these categories, based on the work of Michael Winer and Karen Ray (Collaboration Handbook) and David LaPiana (Nonprofit Mergers Workbook):
Cooperation: Informal arrangements and relationships with no change in organizational structure of participating entities.
Coordination: More formal arrangements and relationships that focus on specific programs or projects and are accompanied by plans and a shared mission.
Collaboration: Longer-term, formal arrangements and relationships where separate organizations are brought into a new structure with a shared mission.
Merger: Arrangement in which two organizations become one.
The selected resources below will help you to learn more and understand the costs and benefits of strategic alliances.
You can read an abridged online version here of the book, Best Practices of Effective Nonprofit Organizations, by Philip Bernstein. This volume provides guidance for nonprofit professionals eager to advance their organizations' goals.
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