Recently published with support from the Lodestar Foundation, this study has inspired my past two blog posts focused on this premise: if collaborations work, why aren’t there more? Today, I'm highlighting my own insights and learnings from being involved with collaborative processes in philanthropy.
Scaling is a hot topic in the philanthropic world. Funders and nonprofits are seeking ladders to scale their impact. Collaborations are key in this effort and there's no better place to begin than with joint programs.
As pointed out in the study, joint programs are by far the largest category at 78 percent. (This percentage is also in line with the Collaboration Prize database—a survey also sponsored by Lodestar.) Instead of describing what a joint venture is—and what it seeks to achieve—I thought it would be best to provide this case study by La Piana Consulting.
Trying out collaborations through joint ventures
I frequently suggest to nonprofits that joint ventures are a good way to try out collaborations. So, I was surprised to learn they have the highest (about 30 percent) failure rates until I thought more about the structure—and read more. I turn, again, to La Piana for the thoughtfully outlined reasons.
Let’s put this in common scenario. What’s the difference between the behavior of a couple that has chosen to live together vs. one that is married? If you’ve ever lived with a mate, you know that it’s easier to (a) leave if things aren’t going your way (b) hold your ground when compromise is needed (c) hold onto a ‘I’m single’ state of mind; and (d) not invest in the relationship because you have another lifestyle to support. Joint ventures are still great places to begin, but now I'm smarter and will share this information with organizations.
Who is collaborating? Two hundred thirty-seven nonprofits from across the spectrum and country responded to the survey. A couple of surprises, though. The nonprofit industry is dominated by small organizations -- and by that I mean 70 percent have less than $500,000 annual operations. But these smaller organizations play a minor role in the collaborations stats. This makes some sense as small organizations are focused on survival and are striving for stability.
The collaboration sweet spot is centered on organizations that are in the $1 million to $5 million range. These organizations have successfully negotiated the start-up/survival stage and are ready to leverage. In the crowded nonprofit field—1.8 million today and reportedly 100 new organizations are registering daily with the IRS—it’s no surprise that growth will come by leveraging your strengths and filling service or admin gaps.
The first surprise was that the space with the most collaboration activity is only 20 percent of the total field. I understand the logic, but the reality is perplexing.
The second surprise is that around 30 percent of the smaller organizations responded to the survey and are making their place in the collaboration field. The nonprofit demographics in the west coast of Florida mirror the national statistics. I look forward to sharing this news.
What are your insights from the study?
Learn about these and other concepts used in TPF's approach to philanthropy.
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