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Nonprofits / For-profits Partnerships
Hosted by Patrick O'Heffernan (April 2007)
Non-profits and for-profits can achieve significant results together that are often impossible alone. And partnerships between the two can be smooth and mutually beneficial. Our experience has shown that they are a great tool for Social Entrepreneurship as long as the benefits to both are clearly understood and all obligations are adhered to. The benefits to for-profits organizations can range from added publicity to access to new, hard-to-reach, markets. Social benefit ventures can gain tools, resources and even skilled management assistance.
In my own case, a partnership between my non-profit advocacy website and a for-profit video website gave me online video editing tools, bandwidth and server storage I could have never afforded. The FPO (a start-up) got tens of thousands of new members, and my site was able to achieve its social objective.
How should you proceed if you work for a social benefit venture?
• Approach the FPO with a partnership arrangement that offers tangible benefits (not just "good PR"), i.e., 100,000 new web visitors or advertising in your newsletter.
• Ask the FPO to provide you with services or products that are part of its normal business. Resist the impulse to ask for cash – that is charity, not a partnership.
• Involve technical staff early in the discussions to ensure that operational problems are taken care of in the agreement, rather than fought over later.
• Write a Memorandum of Agreement (MOA) and send it back and forth for editing and changes. Make it as detailed as the project calls for. And remember, it is not the final agreement that is important, it is the communication process that creates it.
• Make sure that all stakeholders in both organizations sign off on the MOA –anyone who will be involved or impacted. Make sure you deal with non-stakeholders who may have negative opinions, so they don't sabotage the agreement.
• Stay involved and keep the relationships strong. Don't sign the MOA and then turn it over to staff to execute. Stay in touch with the project and the leadership of the for-profit organization – you may want to work with them again.
I love to work with start-ups. New companies are often easier to deal with than large established firms. They are hungry, open to new ideas, and have yet to grow a bureaucracy that throws up roadblocks to partnerships. And start-ups often have new tools and products that entrepreneurial NPOs can put to use quickly to gain publicity and new grants.
Join Patrick O'Heffernan in the discussion.


Nonprofits/For profits partnerships
Thanks for starting a discussion on this issue, Patrick.
Since the 80's when I co-founded and led a 30 person commercial consultancy in Europe that tithed 10% of our profits and 10% of our staff time to non-profit activities, I have known the direct benefits of such partnerships. More recently in the USA, for the last three years I've consulted full time to the Freeplay Foundation and Freeplay Energy Plc and currently project manage for the Foundation two rural economic development pilot initiatives in Rwanda and Zambia, where the synergies of partnership between the two Freeplays and other non-profit partners are really exciting.
I wholeheartedly support your recommendation to focus on tangible benefits, while also sensing that many benefits are non-tangible and none the less important for being so. The feel-good factor for people working for a profit-making venture through becoming involved with a non-profit can be hugely motivating. Opportunities to participate in a non-profit's activities and fieldwork offer fresh perspectives. Company staff often learn to look with fresh eyes and work more enthusiastically and creatively within their own business as a result of this contact. In the other direction, close working links with a staff from a commercial organization can remind people working for non-profits in a subtle way about the importance of the bottom line and the need to deliver projects efficiently and effectively to challenging deadlines.
Somewhat differently than you, perhaps, I think process and goal are both important and indeed inextricably interlinked: final agreements in any MOA can be vital if and when we need to remind ourselves exactly what we did agree when we started on the journey together, as for example in a learning review or to clarify points of apparent difference that develop along the path. At the same time MOAs can only be as good as the communication process that creates them and thereafter supports their implementation. As you stress in your piece, relationship is key - at all interfaces of both partnership organizations.
I'm heartened by the extent to which many of us may be waking up again to a systemic view of the universe: seeing the profit/non-profit parts as different facets of the same fundamental societal whole and focusing on the flows between these parts helps us to move beyond the limited perspectives of either. Building bridges between domains which have so much to gain from close cooperation is hugely satisfying work. Managing a profit/non-profit relationship in daily action can also challenge us to address more deeply how we can create and maintain a healthy balance between personal self-interest and public good.
Thanks again Patrick!