(Updated 2025) Everyone knows that 2010 was a brutal year for nonprofits. Anecdotally, we had more requests to assist nonprofits in closing their doors than in my last 15 years of practice combined. In nearly every case, after meeting with the client, we found one or more key programs or core activities that could be salvaged. In every case where programs were saved, a collaborative partner made it possible for the nonprofit to continue on in some form or to at least ensure the continuity of its most crucial programs.
But there is some hope… Working together might save your vital programs when things get bad. If you know about the different kinds of nonprofit collaborations, you can work with other people to exchange ideas or resources.
This post will show you how to leverage mergers, collaborations with nonprofits, and strategic alliances to protect your cause, even if your group can’t stay open on its own. Read on to discover out how corporate social responsibility and collective impact can help you get through tough times without losing sight of what’s important!
Key Points
- In 2010, more nonprofits requested assistance in closing down than the total number that did so in the previous fifteen years combined. High costs and less funding made many groups think about shutting down.
- Working together keeps important programs going. Nonprofits can continue to help their communities by combining, developing partnerships, or sharing resources.
- There are several ways to work together, such as mergers, coalitions, networks, joint ventures, program transfers, and public-private partnerships. These plans let groups share money and staff without giving up their own mission.
- By developing smart collaborations, charities can also get more out of each dollar. For example, after a closure, two local food banks might share one pantry so that people can still get food.
- Working together isn’t a failure; it helps keep things running when things become tough. Working together usually keeps great causes going strong, even when some groups stop functioning.Â
Issues that Nonprofits Face
Nonprofits are under even greater stress now that more groups are having difficulties paying their bills and keeping their employees. Working together with NGOs and exchanging resources and planning tools can help some people feel more hopeful. There’s generally another way to move forward.
2010 saw a sharp rise in groups asking for nonprofit dissolution. The number of these requests was higher than all the requests from the past 15 years combined. Many boards and fundraisers felt growing pressure to keep programs running as costs went up and public funding got tighter.
More business owners called law firms for help with shutting down their businesses responsibly. Many NGOs had trouble keeping open since they didn’t have enough money, their staff kept changing, and they had to deal with new problems in society.
These dissolutions often left gaps in community services including disaster response, nutrition education, and others. Some groups thought about sharing resources or pooling them with other NGOs, but they still had difficulties with costs or collecting less money from corporate sponsors.
This rise showed us that we need to better plan our projects and find new ways to make money. It also set the stage for looking into how working together might help keep critical projects going.
Potential for collaboration to sustain initiatives
Many organizations still run initiatives that serve their communities even when they are set to go out of business or close. These groups usually keep critical services going by choosing to work together instead of splitting apart.
To make a difference, it is vital for the public and private sectors to work together and for nonprofits to work together. For example, organizations may have a stronger social impact without needing to undertake more fundraising campaigns if they pooled their resources and shared personnel or technology.
Strategic alliances also help diverse NGOs work together to reach their goals. In the last few years, struggling organizations have worked with businesses through Corporate Social Responsibility (CSR) programs to keep community health and education projects going that would have been lost otherwise.
When NGOs work together or join forces, they can save money and keep important initiatives continuing strong while also sharing their reputations. Next, we’ll talk about the many different types of partnerships that people who work for charity might form to grow and stay stable.
Types of Collaborative Relationships
When nonprofits cooperate together, they may share resources and solve social problems more efficiently. These strategies let groups collaborate with nonprofits and perform public-private partnerships to come up with new ideas for big problems.
Groups can work together in different ways and share resources to reach their common goals. Using networks or teams may help nonprofits do their jobs better, make the most of their money, and have a bigger impact on society.
Merger
When two nonprofits join forces, they become one legal entity. The organization that stays gets all of the absorbed group’s assets, obligations, and contracts. The board of the merging charity may be dissolved or asked to join the new main board.
After this full legal merger, there will only be one nonprofit left.
Groups choose to combine for a variety of reasons, including combining resources, decreasing costs, or having a bigger social impact through joint projects. A merger can make donations go further and keep important initiatives running well in global health NGOs or public-private partnerships.
This strategy often protects jobs and makes sure that everyone is working toward the same goal, even when the organization doesn’t have enough money to stay alive.
Consolidation
A consolidation makes a new collection of nonprofits. The two initial groups have both closed and are no longer separate. The new group gets a new name, logo, and mission statement.
Each older nonprofit sends a leader to work with the new board and staff. From now on, there will only be one CEO in charge of everything.
Through consolidation, nonprofits might share things like staff, ideas for generating money, or tech resources. It also helps corporate social responsibility programs or public-private collaborations stay united in one place. This is usually better for the mission and lets the charity sector use more resources for a bigger social impact.
Joint Venture
Joint ventures let two or more businesses work together on a project. These flexible deals usually include both for-profit and charitable groups. They start a new firm, like a limited liability corporation (LLC), to manage shared operations or conduct shared programs.
Each partner has a say in choices and shares the risks, work, and rewards.
In 2023, there were 15% more partnerships between nonprofits and businesses. Groups that don’t have enough money or are about to go out of business might stay on track with their goals by forming strategic alliances.
For example, a business and a nonprofit might join together to put on health events in the community and share the costs of reaching out on social media. These kinds of deals let both sides share resources and find new methods to make money, all while making the social impact and purpose of both sides stronger.
Policymakers may also give tax benefits to people who create joint ventures that work on social issues like health or education.
Program Transfer
Program transfer is when the management of some programs is moved from one organization to another. Typically, this occurs when a company shifts its assets and obligations or signs a specialized management contract.
The new charity is responsible for all of these things, such as hiring people, getting resources, and finding ways to make money.
Nonprofits don’t have to shut down good programs; they can give them to another group instead. These adjustments enable the nonprofit sector keep doing social impact work. Nonprofits can work together toward the same goals and share resources without falling apart totally when they have this kind of partnership.
Public-private partnerships can also be advantageous if the government or a business is involved in running things on a daily basis.
Parent-Subsidiary
In a parent-subsidiary relationship, one company buys another but lets it keep its own legal identity. This architecture typically makes some administrative chores, such accounting or human resources, easier and can save money by sharing resources.
The original organization keeps its legal status, but the way the board makes decisions changes.
This is a terrific deal for nonprofits who are short on cash or wish to share resources without giving up their independence. This is a common way for many nonprofits to keep their programs and personnel safe while staying focused on their purpose.
It also lets partners test out strategic connections before they go more serious, like by merging. A parent firm and a child company can have a stronger impact on society if they work together to raise money and share resources better.
Contractual Relationship
Contracts make guarantee that each nonprofit is legally its own entity. They sign contracts to work together on certain projects or plans. For example, two groups could work together to handle things like training employees or keeping track of money.
Nonprofits may cooperate together to save money and fulfill their social goals by sending in joint grant proposals or sharing resources.
Many public-private partnerships also adopt this paradigm. This approach allows missions to collaborate without fully merging their operations. These contracts can help with fundraising and corporate social responsibility efforts by letting companies share resources. They also let companies be flexible in how they run their businesses.
In the charity sector, groups may concentrate on common issues by delegating duties or establishing strategic partnerships.
Strategic Alliance/Affiliation
Strategic alliances keep each nonprofit as its own legal entity. Boards often change, but certain members stay the same. This helps share responsibility and build trust between groups. This design sometimes gives one partner new rights to approve or reject things, which helps keep things under check.
Staff might start working together on things like how to raise money or share resources.
Nonprofits can work together on their goals through strategic alliances without giving up control over their own activity. It’s common for businesses to work together and with the government here. They work together to create a stronger impact on society.
A group that is going bankrupt might partner with a solid nonprofit to keep services going without having to close down completely. This is called fiscal sponsorship. These forms of strategic alliances bring together efforts to solve big social problems in the nonprofit sector without having to entirely merge or lose their independence.
Contribution and Affiliation
Contribution and affinity create a stronger bond than strategic links do. A good membership model enables one nonprofit join another. The group of members has the power to make decisions and help steer them.
In return, it gives the greater group some of its resources, such money or programs.
This deal opens up new ways for organizations in the field to work together. It includes both pooling resources and working together to achieve project or social impact goals. By combining resources and making explicit agreements, these public-private partnerships can help missions work together and make fundraising efforts more successful.
This model enables organizations keep their voice while still obtaining the benefits of shared governance. It maintains both autonomy and organization in corporate relationships or affiliations.
Partnerships
In the nonprofit world, a partnership is an agreement, either formal or informal, between two or more groups to work together to achieve a shared purpose. These agreements often use the same resources, ideas, and knowledge, even when they don’t officially merge.
For example, a public-private partnership might use a charity’s outreach and business finance to solve social problems faster. Groups can work together on one project or keep working together on many projects.
Nonprofit partnerships let groups exchange things like staff time, tools, and even space in clever ways. When groups share resources, they may individually perform what they do best while working together to realize bigger goals.
These forms of strategic alliances assist bring missions together and have a stronger effect on society without changing tax status or control.
This also includes corporate social responsibility. Companies can join together to benefit each other and their communities by sponsoring events, volunteering, or collecting money together.
Networks
Networks link many NGOs, enterprises, or even partnerships between the public and private sectors. These groups share information and ideas to help solve social problems. Their main goals are to push for change, have a wider impact, and make the nonprofit sector stronger.
Networks don’t usually create formal legal ties like mergers or joint ventures do.
Networks can help nonprofits raise money and share resources without getting in the way of their goal. One example of how this adaptable method might work is the National Council of Nonprofits.
In these networks, strategic ties often lead to shared resources while keeping programs independent. Instead of splitting up, they want its members to work together to make a bigger difference in the world.
Coalitions
The focus changes when you go from networks to coalitions. Coalitions are groups of people who come together to help a cause or reach a common goal. Each member keeps their own identity, yet they work together on marketing and messages.
This way of doing things helps fix problems in society including hunger, lack of education, and health issues.
Here, it’s crucial to share resources. Members usually exchange information, plans, and even ways to make money while still being independent. Nonprofits can form effective coalitions with government agencies or corporations when they work together. These coalitions can focus on public-private partnerships and accomplishing big changes.
The American Cancer Society, for instance, works with schools and companies to help individuals quit smoking. Food banks also work together across communities to help those who are hungry. These strategic collaborations allow everyone speak with one voice while still supporting the goals and social effect of each group.
Consortiums
A consortium is a group of NGOs that work together in an official way. Groups work together on initiatives, services, or funds that they all use. For consortium activities, each member may need to provide money or help operate the group.
These groups help nonprofits pool their resources and save money by exchanging things like fundraising tactics and outreach tools.
A lot of huge NGOs work together in groups called consortia to make the world a better place and push corporations to be more socially responsible. Government agencies and businesses can also work together in a consortium. For instance, health networks can work together to solve big problems in society.
These groups in the nonprofit sector can do more together than they could do alone by combining resources and power.
A Perspective on Nonprofit Dissolution
Nonprofit leaders can cooperate with other groups to turn risks into chances. They can do this by working together with the government and businesses, or with other nonprofits. When organizations work together, they may share resources, goals, and keep programs running that genuinely help people.
Collaboration as a solution, not a failure
Many groups see dissolution as a loss, but it can open up new possibilities to work together. Two methods to keep significant programs running include working together with other nonprofits and forming strategic alliances. In 2023, more NGOs joined public-private partnerships to share their resources. This indicates that it’s smart to work together, not weak.
Getting teams together or pooling workers provides them new ideas and helps them address societal problems better.
Groups can engage with corporations or create joint ventures to get things done more quickly. They might transfer programs or set up networks to make broader changes without spending a lot of money. In the nonprofit sector, sharing information makes it easier to get donations and share resources.
When you decide to work together, you should think about what’s best for the people you serve, not just how to maintain your organization’s name or logo.
Using savvy partnerships to keep useful initiatives continuing.
Collaboration is a strong answer, not a failure, and it is the best way to keep significant nonprofit projects alive. Even if a corporation goes under, strategic partnerships can help keep good work alive.
Partnerships between nonprofits or between the public and private sectors could relocate programs to other groups with similar purposes. Two local food banks could operate together, for instance, or one could take over the other’s pantry when it shuts so that families never lose aid.
Pooling resources makes every dollar go further and keeps the social impact strong. Nonprofits can benefit the community in new ways by sharing resources including strategies to raise money, staff skills, and tools for reaching out.
What took place? Public services never stop, and everyone wins when important causes get through tough times by working together instead of giving up.
Final Thoughts
Directors of nonprofits have to make tough choices, but shutting down isn’t the only one. By working together, partnerships and cooperative enterprises can help keep important initiatives alive. Working together and sharing resources is often simple and affordable.
Could a merger or a way to share services help you get what you want? Helping the individuals you serve by working with others can be very helpful. Ellis Carter is a charity lawyer who has worked with tax-exempt entities all throughout the country for many years. She has created other guides with tips on how to work with NGOs.
Keep moving forward; working with others can help your company not only survive but also thrive.
FAQs
1. Why should a nonprofit facing dissolution consider collaboration instead of closing?
In the field of nonprofits, working together lets groups pool their staff, resources, and work on social issues. This can help missions stay going and make a bigger effect in the globe.
2. How do public-private partnerships support struggling nonprofits?
Public-private partnerships let nonprofits work with companies and share resources. These partnerships usually lead to improved ways to get money and more reliable help.
3. What does mission alignment mean for nonprofit collaborations?
When two partners agree on their mission, it means they both care about the same things or goals. When NGOs work together to reach their goals, they may solve bigger problems as a group.
4. Can resource sharing really save a nonprofit from dissolving?
Yes, sharing resources can help cut costs by hiring outside support for things like marketing or accounting. This gives you more money for direct services or programs.
Corporate social responsibility tells firms to support other groups by giving them money or collaborating on initiatives with them. This makes NGOs and companies work together in ways that help both sides and generate long-lasting impacts in communities.