Across the world, leaders of organizations from all three sectors increasingly recognize the necessity of leading beyond the walls by developing partnerships that thrive on the shared strengths of their participants. The value of productive alliances for building healthy, cohesive communities has long been clear to leaders of nonprofit social sector organizations. The challenges our society faces cannot be met - nor our opportunities fully realized - by any one organization or sector alone. Effective collaboration with other nonprofits, government agencies, and businesses is an imperative.

We are witnessing a proliferation of powerful partnerships between nonprofit organizations and businesses. The development of these strategic and complex relationships is profiled in The Collaboration Challenge: How Nonprofits and Businesses Succeed Through Strategic Alliances (Jossey-Bass, 2000). James Austin’s book provides extensive case studies, frameworks, and lessons to help nonprofit organizations and businesses connect with each other, ensure strategic fit, generate value, and manage their relationships.

Developing effective nonprofit-business collaborations is a demanding task but quite achievable. This workbook, the accompanying thirty-minute videotape, and additional information on the Drucker Foundation Web site are designed to complement The Collaboration Challenge and help your nonprofit organization further its mission through strategic alliances with businesses. These resources can be used, alone or in combination, to encourage your board, volunteers, and staff to consider carefully whether and how to develop alliances with businesses. Through this systematic process for developing your nonprofit’s portfolio of alliances with businesses, you can introduce concepts and examples, stimulate discussion, and unleash the creative energy of the organization.

Successful alliances justify the investment of focused attention and other resources because they directly further both the nonprofit and business missions. The thousands of practitioners who have read The Collaboration Challenge discovered powerful frameworks for thinking about alliances and practical guidance for designing more productive relationships. Our research, conferences, and workshops confirmed the value of this information, and our customers expressed interest in having additional practical tools to help their nonprofits develop alliances.

Inspired by The Collaboration Challenge and feedback from nonprofit practitioners, this workbook presents a four-phase process to help your organization prepare to meet the collaboration challenge, plan strategic alliances with businesses, develop alliances with businesses, and periodically renew business alliances. Each phase is designed to encourage appropriate participation, organize necessary information, and guide board, volunteer, and staff discussions toward successful nonprofit-business alliances. .

The Drucker Foundation Vision 2010 sees the social sector as the "equal partner of business and government in developing responsible leaders, caring citizens, and a healthy, inclusive society." In this position of equity, all social sector nonprofit organizations must lead beyond the walls by forming partnerships, alliances, and collaborations that produce mutual benefits and results. They must be aware of the assets they possess, alert to the benefits they require, and able to act on opportunities to further their missions of building community and changing lives.

We look forward to learning how you have used these resources and how the Drucker Foundation may better serve social sector organizations in developing successful alliances with businesses. Please take a moment to complete and return the feedback form at the back of this workbook. We wish you the best as your organization meets the collaboration challenge to further its mission.

January 2002

James E. Austin
John G. McLean Professor of Business Administration
Chair of the HBS Initiative on Social Enterprise
Harvard Business School
Frances Hesselbein
Chairman of the Board of Governors
The Peter F. Drucker Foundation for Nonprofit Management

Acknowledgments

The board and staff of the Drucker Foundation are grateful to the collaboration partners who made this workbook (and the accompanying video) possible. We thank James E. Austin for The Collaboration Challenge and his long-standing devotion to the social sector and to understanding how it can grow through cross sector alliances. For leading beyond the walls, we thank Frances Hesselbein, chairman of the Drucker Foundation Board of Governors, and long-time practitioner in building productive partnerships. This workbook is the product of many authors. Jim Austin provided the frameworks, cases, lessons, and oversight that are its thoughtful and heartfelt basis. We thank Holly Hartstone, Jill Markowitz, and Gary J. Stern, who crafted a process true to Jim Austin’s work and to nonprofit practice. Sonya Grier provided a review of literature on nonprofit-business collaboration, and other members of the Drucker Foundation Training Team contributed numerous insights. The review and participation of many nonprofit leaders also contributed to the development of the workbook. We thank the hundreds of leaders at the Drucker Foundation conference and at the Peter F. Drucker School of Claremont Graduate University who reviewed the first efforts, and the members of the Milwaukee nonprofit community who reviewed the subsequent draft and workshop and provided the essential voice of the customer. For help with this Milwaukee pilot we thank Leigh Kunde of the Nonprofit Management Center for hosting, Richard Pieper of Pieper Power for financial support, and the many others who assisted. We thank Ken Witty for producing the Meeting the Collaboration Challenge Video. It presents real stories of collaboration success. Our publishing partners at Jossey-Bass joined us in the development and launch of these tools. We are grateful for this ongoing collaboration. Finally, we are grateful to our funders who enabled this dispersed team to collaborate.

Rob Johnston
President and CEO
Drucker Foundation

Lead Funding
W. K. Kellogg Foundation
Additional Funding
GE Fund
John A. McNeice Jr.
ServiceMaster Company
United Way of New York City
University of St. Thomas
Washington Mutual
Drucker Foundation members and funding partners

Relationships Between Nonprofit Organizations and Businesses

Relationships between nonprofit organizations and businesses are becoming increasingly complex and strategic. They are migrating from charitable relationships between benevolent donors and grateful recipients to varied alliances that create diverse benefits for both partners and added value for communities. Today there is growing interest in the evolving range of partnerships, alliances, ventures, and collaborations between nonprofit organizations and businesses. These relationships result from opportunities and careful planning. To lead beyond the walls, nonprofit organizations need to be ready both to respond to serendipity and to seek out business partners systematically to develop alliances that further their missions.

The Range of Nonprofit-Business Relationships

The types of relationships between businesses and nonprofit organizations are evolving, as is the language that describes them. Most familiar are contributions of money and goods and sponsorships of events, activities, publications, and otherproducts. These relationships provide goodwill for businesses and funds for nonprofitorganizations. Businesses continue to encourage employees to volunteer with nonprofit organizations as board members, as fundraisers, in developing and delivering programs, and by providing pro bono technical expertise. Many nonprofit organizations regularly provide employee services under contract to businesses, in areas including child care, health, education, and job training and readiness.

Cause-related marketing has become increasingly familiar as businesses contribute a portion of revenue generated by specific marketing activities to the nonprofit organizations featured in those campaigns. Businesses and nonprofits are also joining in social marketing projects designed to create social benefits or behavioral change. Nonprofit organizations are arranging licensing and "branding" agreements in which businesses pay to use nonprofits’ names, logos and images to enhance the businesses’ marketing activities and the nonprofits’ visibility and finances. And some nonprofit entrepreneurs are partnering with businesses in social enterprises to generate surplus revenues for nonprofits from creating, testing, distributing, or selling services and products.

Businesses’Benefits

The growth and the variety of relationships between businesses and non profit organizations are compelling evidence that businesses are obtaining benefits beyond the satisfactions of traditional philanthropy. These benefits are real and resource management and the corporate culture, and supporting corporate strategiesthrough community improvement.

A strategic alliance with a nonprofit organization can help generate business by enhancing a company’s reputation, building goodwill, and strengthening its image. Such alliances can also expand a business’s network, markets, and access tokey customer groups. Alliance projects can provide arenas for developing and testingthe business’s products, services, and innovations.

As an expression of corporate values and a source of opportunities for communityservice, a strategic alliance with a nonprofit organization can strengthen human resource management and corporate culture

Alliance activities can:
• Enhance employee motivation, morale, loyalty, and retention.
• Foster empathy and caring that reinforce a focus on service.
• Expand opportunities for employees to practice leadership and management.
• Strengthen the organizational "glue" created by common values.
• Illuminate individuals’ capabilities, values, and attitudes.
• Increase the organization’s ability to attract potential employees.

Finally, community improvement has increasingly become part of corporate strategy. Alliances with nonprofit organizations provide opportunities for businessesto lead beyond the walls. Businesses can fulfill civic responsibilities and strengthen business conditions through positive impact on communities while simultaneously enhancing their images.

Nonprofit Organizations’Assets and Benefits

Nonprofit organizations are recognizing that their own broad range of assets and capabilities produces these benefits for businesses. Strategic alliances depend onnonprofits’ powerful missions and strong public images, access to customers and markets, extensive communication and distribution systems, relationships with community leaders and other influential people, organizational expertise and programs, and other assets.

Through alliances with businesses, nonprofit organizations are realizing abroad range of benefits for their customers as well as for their organizational infrastructure and operations. These benefits come from relationships not only with those who manage businesses’ philanthropic contributions but also with those in marketing, product development, human resources, public relations, and other business units. The benefits nonprofit organizations can realize range from program innovation and delivery to revenues and goods, from people to facilities, and from publicity to information. Nonprofit organizations can increase public awareness of issues and causes and achieve greater organizational visibility through alliances’ public relations and marketing communications. Businesses can also provide experts’ pro bono assistance and access to other businesses and influential people to expand nonprofit organizations’ contacts.

Meeting the Challenge

The evolving range of relationships between nonprofit organizations and businessespresents opportunities for mutual benefits and results beyond those anyorganization or any sector could achieve alone. By meeting the collaborationchallenge, nonprofit leaders can realize numerous benefits for their organizationsand the communities they serve.

Introduction: Leading Beyond the Walls