GuideStar Blog

The Soft Underbelly of Nonprofit Collaboration

Diverse group touching fists over a cluttered desktop to indicate collaborationIt seems like everybody is talking about how important is for organizations to work together. Foundations, who are seeing a growing demand for their resources but want to see a greater impact for their donations, encourage organizations to work collaboratively around key issue areas, geography, and target groups. Elected officials like to see stakeholders come together to tackle problems that plague the community. After all, “it takes a village to raise a child,” and probably several villages to save the world. Organizations work collaboratively to share the workload; strengthen organizational capacity; share lessons learned; and create synergies around new and existing programs.

What we don’t talk about so much are the potential pitfalls and vulnerabilities of partnership. I like to call these the soft underbelly of collaboration. They include such things as inequitable compensation and visibility for collaborators in proportion to their contributions; financial risks exceeding the potential rewards; broken relationships; and lack of accountability, to name only a few. Every collaboration is different, and each one carries its own sets of issues and risks.

Like marriage, collaborations are not to be entered into unadvisedly. For every successful collaboration of which I’ve been a part, I can name several more that failed for one reason or another. Through the good, the bad, and the ugly, I have learned valuable lessons, and I’d like to share some of them with you. 

  1. Understand your self-interests. Most people who work in community development and nonprofit management are mission driven and get genuine satisfaction from making the world a better place. That does not negate other needs and desires you might have, such as being valued as a leader or team player; being able to participate in the financial value derived from your work; or wanting to establish relationships with people who can advance your cause or career. The list goes on. Before entering any partnership or recruiting others to work with you on an initiative you are thinking about, make sure you understand your motivations; your needs; how your needs will be met: and what you will do if they are not met. I also recommend that you talk to a lawyer to get a sense for what your involvement in the collaboration could mean from a legal standpoint.

  2. Understand your worth. Although, theoretically, everyone in the collaboration is on the same team, the value of everyone’s contributions may not be the same. There are some partners who work while others sleep, in both the literal and figurative senses. Other partners may lend their names to a project; have sketchy attendance; and do just enough work to keep from being kicked out of the project. It’s important to have very candid conversations about your workload, the value of your contributions, and potential compensation, should the collaborative start to generate income. These discussions need to start as soon as possible during the formation of the partnership. Do not proceed if you feel your contributions will not be valued or appreciated by other members of the collaboration.

  3. Understand the self-interests, value, and motivations of everyone else you’re considering adding to your team. After you have determined your self-interests, motivation, and worth, you need to do the same for everyone with whom you would like to be involved in the collaboration. Have candid conversations regarding your mutual self-interests and try to come up with triple-wins; that is, solutions that work for you and your organization, your collaborative partners, and the community. Before you negotiate, know what your own limitations and deal-breakers are.

  4. Don’t let funding proposals be the only factor that determines the terms and scope of your collaboration. Funders often encourage partnership among several organizations as a consideration for being funded and ask prospective grantees to provide a memorandum of understanding as evidence of collaboration. As a result, it is not uncommon for grant proposals to be the driving force for collaborations involving nonprofits. I jokingly call partnerships developed in this manner “nonprofit shotgun marriages.” Although the partners may or may not be “in love,” so to speak, there is a very good chance that their working relationships have not been tested, with time to get to know each other better and weather storms. They will find out how compatible they are as partners very soon after the grant agreement is signed and the funding starts to flow.

    In an ideal world, organizations should develop a collaboration first, in the absence of any funding. I say this, because, money, self-interest, and—sadly—greed often bring out negative dynamics that may not be apparent before funding. It is best to determine how partners will be compensated before any money flows into the collaboration—a time when collaborating partners, presumably, still have positive relationships with one another. If your collaboration is funded before a true meeting of the minds has been established in writing, the group leaves itself open for conflicts and the potential for some partners to take unfair financial and political advantage of the situation.

    After collaborating partners solidify the terms and conditions under which they will work, they should seek funding sources that are in alignment with what they are trying to achieve. This will take significantly longer than hammering out an agreement under the time pressures of meeting a proposal deadline. It significantly increases, however, the chances of the collaboration surviving for the long haul.

  5. Vet everyone with whom you want to collaborate, including people that you know and have worked with before. Just because you have known people in passing for years does not mean that you really know them, or that they would make good partners for the collaboration you have in mind. Some of the worst collaborating partners I’ve ever had are people that I thought I knew but didn’t vet. During these failed collaborations, I learned things that, had I known beforehand, would have prevented me from asking them to work with me.

    The higher the stakes of the proposed collaboration, the more in-depth your personal vetting process should be. Collaborations with potentially high stakes should include discussions with others who have worked with prospective partners; a review of their organizations’ financial statements and state and federal filings; a review of public documents, articles, etc. Red flags would be such things as prospective partnering organizations having consistent and growing financial deficits over several years; board members’ conflicts of interest; past disloyalty to team members; failure to follow through on commitments; minimal contributions to the team’s workload; etcetera.

    You should be concerned if a prospective collaborative partner refuses to share information on request, particularly public documents such as IRS Form 990. Not only is it illegal for organizations to refuse to share copies of their Form 990s upon request; their refusal to do so is a strong indicator that their organizations would be less than transparent in its dealings with other partners.

  6. Determine the legal structure of your collaboration. Collaboratives can take on many forms. They may be ad hoc, meaning that partners are coming together for an explicit purpose, and the collaboration will be dismantled after the purpose has been fulfilled. Or the collaborative may be permanent, and could be structured as a legally binding partnership, joint venture, merger, limited liability corporation (LLC), corporation (C Corp or 501 (c)(3)), low-profit limited liability company (L3C), etcetera. It is best to consult with your partners and attorney to determine the best legal structure for what you are trying to achieve.

  7. Have an exit strategy. Before your group starts the collaboration, it is important to come to agreement about how long it will last, and how to wind it down. Examples of triggering events include the fulfillment of the mission, vision, goals, and objectives of the collaboration. Collaborative partners may also want to consider how much time they will continue to work together if they are unable to meet the mission, vision, goals, and objectives within a certain time frame.

  8. Establish ground rules. Every collaboration, regardless of how formal or informal, should have a set of rules and policies outlining the mission, vision, core values, goals, and objectives of the collaboration; roles and responsibilities of each collaborator (individuals and organizations); provisions for decision-making methods and accountability; a structure for work flow; how finances will be managed; who owns the intellectual property developed during the collaboration; how the partnering organizations’ intellectual property will be protected; how conflicts will be resolved; and an exit strategy for the collaboration. Depending on the legal structure and complexity of the project or program for which collaboration is being sought, the terms of collaboration could be documented in a memorandum of understanding, contract, handbook, policies and procedures, or bylaws. Whatever the rules are, they should be developed and approved by the collaborating partners and reviewed by an attorney.

There you have it. I hope you find the eight lessons I’ve learned over the years useful in your collaborative efforts. If you have any questions, feel free to email me at valeriefleonard@nonprofitutopia.com.

Valerie F. LeonardValerie F. Leonard is the host of Nonprofit Uptopia, a community for emerging nonprofit leaders. She is an expert in community and organizational development and host of the Nonprofit Utopia podcast. Valerie is the former founding executive director of a neighborhood grantmaking organization and played an integral role in the framing of a comprehensive planning process for a changing community on Chicago's West Side.