A Window of Opportunity for Collaboration Between Nonprofits is Opening

Numerous changes have been thrust upon nonprofits in quick succession this year. While these changes have brought on stark challenges, they have also opened up new possibilities for collaboration between organizations. This window of opportunity may not be open for long, so nonprofits should act now to take a serious look.

Three changes in particular have been most significant. First, remote working and social distancing have changed how we work and how we deliver services. Second, demand for services and mission delivery changed as the needs of funders, constituents, and the general public moved in new unexpected directions. And third, economies, public confidence, and expectations have shifted downward after many years of positive momentum.

Innovative nonprofit organizations are recognizing these changes and pivoting to stay cutting-edge and relevant. Struggling nonprofits are just holding on and still resisting change.

Collaboration with other like-minded organizations can be a driver for positive change. This has always been the case, but six months of a pandemic has elevated this strategic focus to a new level. New economic, demand, and capacity pressures are pushing organizations to consider mergers, acquisitions, joint ventures, collaborative projects, cost-sharing and service-sharing opportunities that, in the past, have been held back by political and legacy barriers.

Whether your organization is in a weak, stable, or strong operational and financial position, all organizations will benefit from taking early strategic initiatives to search out new opportunities for collaboration.

For weakened organizations, getting started early is imperative. The weaker you get, the less attractive a partner you become. Your ability to drive a mutually beneficial deal will be significantly diminished. One new joint venture or partnership can be an immediate game-changer and enhance your ability to survive this downturn.

For stable organizations, resist the temptation to stay the course. Sustainability and growth are weakened by stagnation and enhanced by strategic change and new initiatives. There are new opportunities out there. Do not stay on the sidelines and let them slip by.

For strong organizations, play your venture capital card and leverage your position of strength. Be proactive and seek out new opportunities. Consider forming a strategic working group with internal and maybe even external partners to explore both vertical and horizontal opportunities that have surfaced as a result of the pandemic.

Vertical opportunities help your organization grow engagement with members, donors and constituents and increase capacity for current programs and services. Horizontal opportunities allow your organization to grow its footprint, expanding into new programs, activities and services that you did not otherwise have the expertise and capacity to fulfill. A vertical opportunity could include, for example, acquiring or joint venturing with an organization that is active in a geographic region not currently accessible to your organization. A horizontal opportunity could include, for example, acquiring or joint venturing with an organization that has a certification program, research laboratory, virtual training program, or other line of service that your organization does not currently provide.

Planning Tip – Start by considering collaborations that were explored in the last five to ten years but were abandoned or were not successful. Next, discuss changing funder and constituent needs and what critical service capabilities need to be added. Finally, be proactive in searching out organizations that are struggling and exploring whether and how you could acquire all or parts of their programs and operations.

Final recommendation: make this a new strategic initiative for both senior management and your Board. Discuss which drivers of change are most impacting your organization and which new vertical and horizontal opportunities would most help you expand on mission delivery. Be proactive in your approach, aggressive in your search efforts, and open-minded to new possibilities.