by Barbara Turk - CRE is currently working with nonprofit organizations that are in various stages of exploring strategic alliances. These alliances usually take the form of a parent-subsidiary relationship. In this kind of alliance, one organization assumes decision-making and fiduciary responsibilities for both organizations. The other organization becomes a subsidiary of the other.
Nonprofits usually want to have the conversation about structure, but it’s important to put first things first. Defining the purpose of the alliance, then identifying a partner that will help you realize that purpose have to come first. Here are some thoughts from experience about what makes for successful alliances from the perspective of subsidiary organizations.
1. Plan for your clients and your community, not your organization
The best strategic alliances are put together by organizations that put the concerns of their clients and communities first. There is nothing particularly strategic or valuable in pursuing an alliance if, in your heart of hearts, the most important thing is keeping the organization’s name on the letterhead. The success of a strategic alliance should be defined in terms of success for the people you are organized to help.
2. Dating do’s and don’ts
As in life, finding the right partner makes the journey that much easier. The Amherst H. Wilder Foundation researched predictors of success for collaboration and developed a collaboration factors inventory, available on their website. Not surprisingly, the list looks a lot like what we need in any important relationship: trust, respect, values, mutuality, and flexibility. David La Piana has done extensive work on non-profit mergers, and finds that organizations having a history of working together, with similar organizational cultures and values, and complementary interests in collaboration have a leg up.
Once you’ve identified your prospects, dating etiquette applies. Don’t negotiate with more than one organization at a time, unless you’re prepared to face the consequences.
3. Don’t wait until it’s too late
Strategic alliances require a lot of up front work. Strategic alliances are not a solution for your cash flow problems. And, it’s going to be tough to find a partner who is willing to take on your aged accounts payable. An alliance with another organization is something you plan for. Don’t wait.
If you’re reading this and have been thinking that an alliance might be a strategic solution for your organization, now is a good time to commit to exploring this scenario -- what motivates this thinking, what you would like to gain from an alliance, and what you are looking for in a partnering organization. CRE is currently working with organizations in various stages of exploring strategic alliances, and we would welcome the opportunity to work with you. And, whether your organization ends up seriously pursuing a strategic alliance or not, the strategic thinking you do can be invaluable.
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