The Soft Underbelly of Nonprofit Collaboration Pt. 2

Last week, we looked at the first part of Valerie F. Leonard’s blog “The Soft Underbelly of Nonprofit Collaboration.” This week, we continue with part 2. Her blog focuses on the opportunities and pitfalls of collaboration between agencies and organizations.

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This blog was first posted on Guidestar Blog by Valerie F. Leonard on May 2, 2019.

  • 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; and a review of public documents, articles, and so on. 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, and minimal contributions to the team’s workload.

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, but their refusal to do so is a strong indicator that the organizations would be less than transparent in dealings with other partners.

  • 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)), or low-profit limited liability company (L3C). It is best to consult with your partners and attorney to determine the best legal structure for what you are trying to achieve.
  1. 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.
  1. 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 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. Leonard is the host of Nonprofit Utopia, 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.

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