Does cross-sector collaboration lead to higher non-profit capacity?

blogimage_nonprofitcapacityBy Michelle Shumate, J. Sophia Fu, and Katherine R. Cooper

Over the past several decades, non-profits have been encouraged to partner with other organizations to increase their capacity and effectiveness. Funders and non-profit consultants alike take for granted that partnering with businesses, governments, and other non-profits breeds non-profit capacity, defined as the “processes, practices, and people that the organization has at its disposal that enable it to produce, perform, or deploy resources to achieve its mission.” For example, both the guide for partnering with USAID and the common grant application used by many states ask non-profits to describe their partnerships with other organizations in the non-profit, private, and public sectors as evidence of their suitability for receiving funding.

At the Network for Nonprofit and Social Impact, a research lab at Northwestern University, we study how non-profits work with other organizations to move the needle on social issues. We are working on several large scale research projects to understand evidence-based practice for non-profit coalitions and partnerships. However, to date, there has not been a large empirical study that examines the relationship between non-profit capacity and non-profit collaboration. In a forthcoming Journal of Business Ethics paper, we examine the question: Does cross-sector collaboration lead to higher non-profit capacity? Based on a survey of 452 non-profit organizations in the United States, we conclude that collaboration, including cross-sector collaboration with government agencies and businesses, does not result in higher non-profit capacity.

Funders and non-profit consultants alike take for granted that partnering with businesses, governments, and other non-profits breeds non-profit capacity.

In this study, we examined non-profits with three types of interorganizational network portfolios, or what might be considered collaboration personalities. Non-profits with a restricted within-sector portfolio have, on average, four collaboration partners that are within the non-profit sector. In essence, this is the “introvert” personality, with a few close non-profit collaborators. Non-profits with robust within-sector portfolios have the most within-sector relationships, about 16 non-profit partners on average. In addition, they have two partnerships with either businesses or government agencies that extend beyond funder-recipient. In other words, this is an “extrovert” personality, with many connections. In the last portfolio, the cross-sector partnership portfolio, non-profits have relationships with both non-profits (11 on average) and businesses or government agencies (15 on average). Fifty-three percent of cross-sector partnerships (those with businesses or government agencies) were more involved than funder-recipient. To continue the metaphor, this is also an “extrovert” personality, but one who is confident enough to cross borders, cultures, and boundaries. The restricted within-sector portfolio was the most common among non-profit organizations in our sample and the cross-sector partnership portfolio was the least common. In this research, we compared non-profits with either robust-within-sector portfolios or cross-sector portfolios to those with restricted-within-sector portfolios.

We examined non-profit capacity using an instrument we developed (see this article or contact us for a copy of the instrument or details). The non-profit capacity instrument measures eight dimensions of non-profit capacity: board leadership, mission-orientation, external communication, staff development, financial capacity, strategic planning, operational capacity, and adaptive capacity. We chose this instrument because we demonstrated that it was both reliable and valid (meaning that it measures what it says it does and it does so in a consistent way across organizational types). In this study, we examined the first six dimensions of non-profit capacity and how operational capacity and adaptive capacity might enhance the influence of networking on the other capacity dimensions.

Back to the question — does cross-sector (and actually robust within-sector) collaboration result in higher levels of capacity? The answer, surprisingly, is no. Since these results run against the prevailing wisdom of funders and consultants, you might wonder how you should interpret this and what the implications are for your organization. We suggest a few possibilities.

Does cross-sector (and actually robust within-sector) collaboration result in higher levels of capacity? The answer, surprisingly, is no.

First, individual non-profit organizations that don’t grow in their capacity within collaborations may still produce good outputs (e.g., kids educated, people fed, environment restored). In other words, the collaborations might not lead to better organizational capacity, but they still might offer benefits to the community.

Second, we take a large-scale approach, which may not capture the nuances of individual non-profit activities within their collaboration. For instance, some non-profits may undertake specific activities that lead them to build capacity, but collaboration in and of itself doesn’t lead to improved capacity.

Third, collaboration typically requires financial and human resources, and many of the non-profits in our study are maintaining relationships with 20 or 30 partners. Some of the energy spent cultivating and maintaining partnerships might be better spent improving other capacities. For example, non-profits in our research tend to have lower operational capacity than the other dimensions — that means that they don’t have the ability to set goals, accurately measure performance, and then improve based on those results. It might be that organizations that focus on improving their operational capacity do better than those who pursue a lot of partnerships. In fact, we find that increasing adaptive and operational capacity is related to increases in other types of capacity. If we are right, then scholars, funders, and consultants should be careful about prescribing partnerships as the solution to capacity ills — the prescription doesn’t seem as effective as it is often assumed to be.

Michelle Shumate, Ph.D. is a Professor of Communication Studies at Northwestern University. In addition, she is the founder and director of the Network for Nonprofit and Social Impact.

Sophia Fu is a PhD student at the Media, Technology, and Society program of Northwestern University. Her research interests include social networks, technology, entrepreneurship, and organizational innovation.

Katherine R. Cooper, Ph.D. is a researcher whose main interest is how non-profits collaborate with others to increase their impact. She is currently the Associate Director of the Network for Nonprofit and Social Impact.