Video Kate Dewey discusses considerations for organizations forming strategic alliances.
Nonprofit organizations are exploring how 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.
- Some types of restructuring 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 formality, shared decision-making, and organizational integration.
The following types of strategic alliances 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.
- Collaboration: Includes information sharing, program coordination, and joint planning. Organizations involved in collaboration remain independent with full decision-making power.
- Administrative Consolidation: Typically aimed at increasing efficiency, includes formal agreement for contracting, exchanging, or sharing services. Organizations involved in administrative consolidations share decision-making powers.
- Joint Programming: A restructuring where organizations share the launch and management of one or more programs. Organizations involved in joint programming share decision-making powers for the progam while maintaining their independence in managing their own programs.
- Corporate Merger/Acquisition: Includes full integration of all programmatic assets and administrative functions.
See also our other resources on nonprofit collaboration:
- Collaboration Hub, which includes a searchable database of 650+ collaboration profiles that detail participants, missions, motivations, successes, and lessons learned.