Board Members Guide to Partnership Planning
Partnerships may arise with the potential to allow nonprofit organizations (NPOs) to carry out their missions more effectively and efficiently. Board involvement is imperative when such an opportunity arises. Although the level of board involvement may differ depending on the complexity of the arrangement, yet its role in leading discussions on the potential impact on organizational performance is critical to all types of arrangements. Please click on the headings below to view some of the key factors NPO boards should consider when entering a partnership arrangement.
Authors: Dr. Ramya Ramanath and John A. Van Eyk*
*The authors gratefully acknowledge the work of Janean Brown, Mutebi Gardner, and Tera Qualls.
This publication was created by the Johnson Center for Philanthropy. In partnership with the AIM Alliance. In support of The Collaboration Prize presented by The Lodestar Foundation www.thecollaborationprize.org
Creating consensus for change is critical to a successful partnership. Organizational culture can be a negative influence if the staff perceives change as a threat. Specific attention needs to be paid to helping staff see value in entering a partnership that can strengthen mission achievement. Fully integrating staff in planning can go a long way in creating a culture of cooperation and help the partnership be more successful.
When considering an organization with which to partner, it is important to ensure financial stability by exercising due diligence. Due diligence is “doing one’s homework” on another organization. When due diligence is exercised, details of bad debt or financial commitments should surface, which would allow the prospective partner to make an informed decision. If there is a question, just ask it! After all, no organization wishes to be left holding a stack of unpaid bills at the end of the day.
It is critical the board play a role in evaluating outcomes of the partnership, putting methods in place at the planning stages of the partnership itself. This requires reviewing periodic reports of financial aspects and needs assessments to ensure the partnership is meeting the needs of the clients. Feedback should be solicited from clients and staff in formal and informal ways. Such evaluations must be organized to serve to keep staff enthusiastic and tracking mission achievement.
It is critical for boards to ensure that partnerships are prompted by a desire not merely to maximize financial resources but to improve efficiency and realize better outcomes for the intended beneficiaries, namely the communities being served. The board must ensure that the NPO has a plan with respect to what it wishes to achieve and how this achievement will enhance mission effectiveness. Boards must participate in such planning and assist in implementation.
Often the executive director is so involved in daily operations, s/he is likely to need considerable support in seeking beneficial partnerships. When an appropriate partner is found, the board must empower the executive director to carry out the details of the collaboration. Policies and resources must be in place to enable staff. The board must, however, resist the urge to micromanage and work to monitor outcomes continually to ensure they are well-aligned with the nonprofit’s mission.
An MoU is a legal agreement setting roles and responsibilities of all involved parties. While some might feel an MoU implies the absence of trust between the organizations; this is not the case. Board members must remember they are not acting on their own behalf, but rather have been given charge to act in good faith on behalf of the taxpaying public. Necessary precautions must therefore be taken to ensure long-term sustainability and implied agreements must be put into a formal MoU.
The appeal of a much needed resource held by a potential partner can cause an NPO to lose sight of its own mission. On the other hand, when two or more organizations with complimentary missions partner, it is highly likely to lead to greater efficiency and effectiveness for all involved. Care must therefore be exercised in selecting partners after a careful analysis of mission, vision and values.
While partnerships can produce benefits for an NPO, the costs must not be forgotten. NPOs considering partnerships must commit financial resources. Apart from these real costs, there are also opportunity costs. Managerial time may be taken away from other routine tasks. Hiring additional staff may need to be considered. The long-term benefits will not be realized if the partnership cannot invest resources to help plan the very act of partnering.
Rare is the partnership where both sides are equal in all respects. An imbalance may provide one of the partners with opportunity to dominate the relationship such that the partnership reflects the interests of the stronger partner. Leadership must have a good understanding of the NPO’s strengths and weaknesses. If leadership finds the organization may be overshadowed in the partnership, they should identify the NPO’s particular niche and clearly demonstrate it's value.
The overall number of partners involved can influence the stability of the arrangement. In partnerships involving multiple organizations, there will need to be a firm commitment from all partners to dedicate human resources toward managing the arrangement. Usually, larger arrangements are well publicized and if poorly managed, each involved party could lose legitimacy, funding, and even become liable in case legal issues arise.