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ASU Lodestar Center Blog

Advantages to collaboration between nonprofit and for-profit organizations


Since the 1980s, nonprofit, for-profit and public organizations have formed partnerships to produce and distribute various goods and services. The growing magnitude and complexity of socioeconomic problems that face societies throughout the world has generated the urgency for cross-sector collaboration to emerge. Examining these cross-sector collaborations reveals advantages for nonprofit leaders seeking greater impact.

In addition, the interdependence between nonprofits, corporations and governments will continue to intensify during the 21st century.  In Nonprofit and Voluntary Sector Quarterly, James E. Austin and M. May Seitanidi said, “Collaboration creation will continue to accelerate and likely become the organizational modality of choice in this century.”

What are cross-sector partnerships?

A cross-sector partnership is an alliance between organizations from two or more sectors that commit themselves to working together to develop and implement a specific project. These alliances are becoming more strategically important for all sectors. 

They can be from business, government and civil society, and they combine the competencies of each sector to resolve a specified problem or challenge. Public/private partnerships have flourished since the beginning of the 21st century in countries throughout the world “often as a means for governments to cope with resource scarcity by engaging private organizations,” according to Nonprofit Hub.

Why is collaboration so necessary?

Collaboration is not only encouraged, but often required for nonprofit organizations. In recent years, social problems have significantly grown, and nonprofit organizations (NPOs) have risen up to address these. NPOs and corporations have come together because of the need for additional funding resources and new strategies for organizational approaches. 

To make these collaborations work, organizations need to find at least one common goal to work with one another, not against. Collaboration among different sectors is not only difficult to create and manage, but difficult to define and to analyze common goals. 

The four types of collaboration

All involved organizations must think strategically to find the right fit with existing missions, organizational values, and current and future needs. The different types of collaboration have distinct characteristics and functions. They include four stages: philanthropic, transactional, integrative and transformational. The type of collaboration will be the vehicle by which all partners will go forward. All parties need to be cognizant of their organization’s own values and needs, maintain honest communication and use of multiple sources to sustain positive interaction.

Examples of cross-sector collaboration

There are numerous examples of nonprofit organizations benefiting from cross-sector alliances. One noted example is that of ChildFund International benefiting from its relationship with the for-profit organization TOMs shoes. “For every pair of trendy shoes that TOMs sells, a pair is donated to a child in need through one of their on-the-ground partner organizations,” writes Nonprofit Hub. It is estimated that 15 percent of children do not have any shoes to put on their feet, so this is indeed a necessity to children worldwide.

Another example of nonprofits benefiting from partnerships with for-profit organizations is Pact, an international development nonprofit. Pact’s involvement with Coca-Cola funded several million dollars for female economic empowerment in Southeast Asia. The Coca-Cola Foundation has also donated more than half a billion dollars in grants for “women, water, and well-being.”

Working together can benefit everyone

Cross-sector collaboration provides advantages for all parties involved. If organizations can find a commonality amongst them, they can work together to form partnerships that produce and distribute various goods and services. This provides the framework for successful implementation of projects as these teams work together.

Nicholas Linsk is a graduate of the Master of Nonprofit Leadership and Management program at Arizona State UniversityLinsk earned his Bachelor of Science degree in Marketing from the W.P. Carey School of Business at ASU. Linsk was inspired and motivated during his collegiate studies to pursue a career with a nonprofit or private organization as an organizer/collaborator. His career goal is to pursue new social enterprise initiatives to impact community connections for families and individuals. Linsk believes that community-driven partnerships create sustainability and longevity.


ASU Lodestar Center Blog