Abstract
Researchers have addressed the implications of power imbalance for nonprofits engaging in collaborations with businesses. Yet as nonprofit–business collaboration intensifies, nonprofit managers’ perceptions of power asymmetry in these relationships remain scantly studied. We argue that investigating these perceptions can sharpen the understanding of determinants and processes of power relations from a nonprofit perspective. To do so, we studied nonprofit–business collaboration in a network of international cooperation nongovernmental organizations (NGOs). Based on our findings, we designed a nonprofit-centric “resource profile” framework of power relations in cross-sector collaborations. This framework provides an empirically grounded tool to inform nonprofit managers’ decision making as they engage in collaborations with businesses. Based on this framework, we elaborate a set of theoretical propositions to integrate existing knowledge and guide further nonprofit-centric research on power dynamics in cross-sector collaboration.
Introduction
Early writers on the topic have emphasized the potential of cross-sector collaboration to efficiently address complex societal issues by bridging diverging interests and pooling complementary resources (Gray, 1989; Waddock, 1989). However, recent studies have noted that power imbalance in collaborations can lead to undesired outcomes for nonprofits engaging resourceful businesses (Harris, 2012; Selsky & Parker, 2010). Focusing on outcomes, some scholars warn that nonprofit dependencies arising from collaborating with resourceful businesses may lead to their co-optation and mission drift—losing sights of their commitments to beneficiaries as they align their operations with the interests of their private collaborators (Baur & Schmitz, 2012; Herlin, 2015; Schiller & Almog-Bar, 2013). However, while the outcomes of power imbalance for nonprofits have been explored, research is scarce on determinants and processes of asymmetrical power relations from a nonprofit perspective.
As the cross-sector collaboration trend accelerates and nonprofits’ access to resources becomes increasingly dependent on engaging the private sector (Kindornay, Tissot, & Sheiban, 2014), nonprofit managers and researchers need sharper understanding of the determinants and processes of power imbalance. This processual understanding can inform decision making and contribute to better outcomes for nonprofits, their local partners, and intended beneficiaries. To address this need, we propose an analytical construct we call resource profile. We embed this construct into a broader conceptual framework of nonprofits’ collaborative relationships considered in their resource environment.
The resource profile construct integrates four key components of resources mobilized by nonprofits in collaborations with businesses: funding, learning, networking, and branding. Our framework provides nonprofit managers with an effective analytical tool to inform decision making as they engage in collaborations with businesses. We make important contributions to the nonprofit literature on cross-sector collaboration by (a) structuring a nonprofit-centric understanding of the determinants and processes of power imbalance in nonprofit–business collaboration, and (b) presenting a set of theoretical propositions to guide future research.
Our arguments are based on a study of collaborations with businesses in a sample of 18 international volunteer cooperation nongovernmental organizations (NGOs). We developed the resource profile framework by interpreting insights gained from this empirical study using a resource dependency lens. Applying the resource profile construct, we mapped our sample of NGOs into three clusters, ranging from weaker to stronger resource profiles. We called them Explorers, Intermediates, and the Seasoned, respectively. We conducted a cross-cluster analysis to explain how nonprofit managers’ differentiated perceptions of power relations linked to their expectations and challenges related to collaborations with businesses.
The article proceeds as follows. First, we review the literature on nonprofit–business collaboration from a nonprofit perspective, formulate research questions, summarize the resource dependency view of power relations, and introduce our resource profile construct. Second, we describe our data sample and explain the data collection methods and coding strategy. Third, we describe the core characteristics of the three resource profile clusters and perform the cross-cluster analysis, based on which we elaborate an integrative framework of power relations and formulate a set of propositions to guide future research. Finally, we summarize our contributions and point to promising opportunities for future research.
Power Relations From a Nonprofit Perspective
Cross-sector collaboration is being relentlessly promoted by funding agencies and seen by development experts as key to addressing global societal issues (Sachs, 2014). This trend takes place in a context of drying public funds for nonprofits as governments disengage from societal issues and shift the burden on the private sector (Austin, 2000; Yaziji & Doh, 2009). In this context, nonprofit scholars have called for the development of an “NPO-centric view of power relations” (Schiller & Almog-Bar, 2013, p. 959) and for further research on the “imbalance of resource transferred (and related imbalances of power) in such relationships” (Harris, 2012, p. 896). In this section, we identify four key resource components discussed in nonprofit studies of interorganizational collaboration.
The importance of funding resources—secured monetary streams to plan and execute operations and programs—to enable nonprofits’ survival and the pursuit of their missions is often presented as self-evident in the nonprofit literature. Nonprofit researchers typically conceive funding as an exogenous prescription: Resource–environment pressures incentivize nonprofit managers to collaborate with businesses to satisfy donors’ expectations and diversify their resource streams away from governmental monies (MacIndoe & Sullivan, 2014). Nonprofits’ reliance on sponsors for funding is typically identified as a major dependency.
Some studies discuss the risk of nonprofits’ increased dependency on private-sector funding streams fostering their co-optation and mission drift away from beneficiaries’ interests (Baur & Schmitz, 2012; Schiller & Almog-Bar, 2013). Researchers insist that to fend off co-optation, nonprofits must learn to rigorously vet potential business collaborators and proactively manage asymmetrical power relations in collaboration with businesses (Al-Tabbaa, Leach, & March, 2013; Baur & Schmitz, 2012; Herlin, 2015). Prior socialization of nonprofit actors, joint decision making, and proactive management of power relations (Almog-Bar & Schmid, 2018) are found to enable the gradual development of the interorganizational trust needed for nonprofits to build their cross-sector collaboration capacities (Sanzo, Álvarez, Rey, & García, 2015). Together, these findings show that collaborating with businesses requires nonprofits to mobilize significant learning resources—organizational capacities to select, vet, govern, and evaluate collaborations. Similarly, Austin’s (2000) broadly accepted “collaboration continuum” implies that collaborators “are engaged in continual learning about the partnering process” (p. 85). In short, nonprofit research highlights the covariance of learning and networking: The ability to collaborate requires gaining capacities over time by collaborating.
Some studies observe that within a population of nonprofits, the ability to mobilize networking resources—collaborative ties within and across sectors—is asymmetrically distributed. Foster and Meinhard (2002) argue that because of their “limited resource base,” it is difficult for smaller voluntary organizations to grow collaborative ties because they “have less to share and thus are not attractive alliance partners” (p. 559). Correspondingly, researchers have found that nonprofits are more likely to collaborate with each other when they have broader and deeper resources (Guo & Acar, 2005), when they have similar organizational attributes and legitimacy statuses, and when they are headquartered in the same regions (Atouba & Shumate, 2015). Austin’s (2000) model highlights that extending collaborative ties initially requires network management organizational capacities. These studies suggest that, while nonprofits with broader resources enjoy abundant access to interorganizational collaboration, smaller nonprofits struggle to find interested counterparties to extend their networking resources.
Focusing on the public image of nonprofits, Herlin (2015) argues that given the frequency of power asymmetries favoring businesses, collaborations may become riskier to nonprofits’ legitimacy when they reach the integrative stage. Although nonprofits may bring distinct and valuable resources to cross-sector collaborative networks (Chapman & Varda, 2017), nonprofits’ branding resources—their public image and reputation—appear especially attractive for businesses interested in burnishing their corporate social responsibility credentials. Collaborating with some types of business, as for instance with luxury brands (Boenigk & Schuchardt, 2015), is found to bolster public attitudes toward nonprofits and incentivize support from private donors. However, Baur and Schmitz (2012) warn that nonprofits engaging with businesses on that basis of reputational motives may compromise their independence and be vulnerable to co-optation, putting their legitimacy at risk. These studies portrait branding in cross-sector collaboration as both a valuable and a fairly vulnerable resource for nonprofits.
In the nonprofit literature on collaboration, resource dependency is the most common theoretical lens adopted to conceptualize power relations. Most studies assume that power asymmetries usually favor businesses and point to the risks of collaboration for nonprofits related to dependencies on businesses. However, Elbers and Schulpen (2011) point in a direction that is often overlooked. They show that when large NGOs from developed countries collaborate with local partners in developing countries, power asymmetries tend to favor the aid agencies at the expense of their local partners. In some cases, aid agencies exclude local partners from decision making and collaborative governance. This highlights that nonprofits are not always on the weaker end of collaborations—Some nonprofits are indeed quite resourceful and influential.
In our investigation of the determinants and processes of power imbalance in nonprofit–business collaborations, we make two initial assumptions: (a) Resource profiles influence nonprofit managers’ perceptions of power relations, and (b) managers’ perceptions of power relations link to their expectations and challenges in collaborations. These two assumptions, illustrated in Figure 1, are well supported in the nonprofit literature and align with the core tenets of resource dependence theory.
Causality assumptions underpinning the research questions.
Based on these assumptions, we formulate these sequential research questions:
Before moving to the research methods and findings, we briefly summarize the resource dependency conception of power relations and introduce the key components of our resource profile construct.
The Resource Profile Construct
We developed the resource profile construct through iterations between literature and empirical data, a process neither fully inductive nor deductive and best described as “abductive” (Suddaby, 2006). An initially broad review of the nonprofit–business collaboration literature informed our interview data coding. In turn, data coding generated themes and subthemes, from which we narrowed down our literature review to focus on the core resource components emerging as most relevant to our informants’ reported experiences. Thus, the sequential presentation of the literature review, methods, and data analysis, standard in academic articles, does not reflect the iterative interplay of our theory-building process but is nonetheless adopted for reader friendliness.
To address our research questions, we developed the resource profile construct by combining insights from resource dependence theory with themes and subthemes emerging from the experiences reported by our informants. Resource dependence theory highlights that organizations adapt to their shifting task environments by accessing “monetary or physical resources, information, or social legitimacy” (Pfeffer & Salancik, 1978, p. 43) through their exchanges with other organizations. Resource dependency, a well-established perspective in social theory, takes root in an earlier perspective known as social exchange theory. Homans (1958), a leading social exchange theorist, explained social behavior in terms of exchange between individuals or groups—both material (i.e., goods and services) and symbolic (e.g., status and authority)—and linked the reproduction of social relationships to the mutual perception of reciprocity in social exchange. Importantly, in Homans’s social–psychological conception of exchange, power is not absolute but contingent on interrelated actors’ perceptions. Drawing on Homans’s work, Emerson (1962) focused on power imbalances resulting from asymmetrical interdependency to argue that the “power of actor A over actor B is the amount of resistance on the part of B which can be potentially overcome by A” (p. 32). Building on this view of power as asymmetrical interdependency, Blau (1964) argues that an actor gains power over counterparties by providing benefits on which they depend in exchange for their compliance, with benefit discontinuation as an implied threat to dissuade noncompliance.
Resource dependence theory is relevant to the analysis of power relations in nonprofit–business collaborations because (a) nonprofits engage in collaborations to mobilize scarce resources to mitigate environmental uncertainty and (b) these collaborations are often characterized by asymmetrical interdependencies potentially leading to co-optative dynamics (Baur & Schmitz, 2012; Herlin, 2015). Based on the resources mobilized by nonprofits in our sample, we elaborate the resource profile construct to operationalize our study of power relations. We define resource profile as the array of resources mobilized by a nonprofit organization in collaborating with businesses. Our resource profile construct, summarized in Table 1, is composed of four key components: funding, learning, networking, and branding.
Components of Nonprofit Resource Profile.
Method
We initially conducted the study for the International Forum for Volunteering in Development, a global network of international volunteer cooperation organizations (IVCOs), and presented a practice-oriented version of the study at the network’s 2014 annual conference.
Data Collection
Among the 20 organizations that responded to our web survey, 14 were NGOs (either headquartered in a single country or “federated,” that is, with branches registered in several countries), three were networks or associations of NGOs with some supervisory function (“umbrella” organizations), and three were governmental agencies involved in international volunteer cooperation with field operations (including one umbrella). Umbrellas responded to the survey by reporting on the activities of the NGOs under their purview. We determined that two of the three governmental agencies initially surveyed were unrepresentative of the population we were studying and excluded them from our final data set.
In the 18 organizations included in our final sample, 15 were involved in volunteer-sending and capacity-building work, 13 in democracy and governance, 12 in small enterprises and the informal sector, 12 in agriculture, and 11 in the environment. Nine of the 18 had or supported advocacy initiatives. Seven had a 2013 annual budget of US$20 million or more, while 11 had annual budgets scattered throughout the US$0–US$20 million range.
Web Survey
The web survey described in Table 2 comprised 44 multiple-choice questions and one open-ended comments section. It served as a first exploratory step to uncover key issues related to collaboration with businesses identified in our initial literature review. The survey showed that the sample contained a wide range of resource profiles, geographies, and programs, which we identified as an analytical opportunity to explore further.
Structure of Web Survey.
Note. NGO = nongovernmental organization.
Qualitative Interviews
Based on insights emerging from survey data, we conducted 17 semi-structured qualitative interviews to investigate NGO managers’ expectations and challenges experienced in collaborating with businesses. We excluded two transcripts (the same two as in the surveys) from the analysis for the reasons given above. Our interview guide was composed of 10 open questions, with sub-questions used for optional follow-ups. Interviews lasted from 30 to 70 min. Of the 15 interviews retained in our final sample, seven informants were top executives, six were program managers or equivalent, one was policy officer, and one was public relations manager. We consider our informants broadly representative of a global population of volunteer cooperation nonprofit managers. The interview guide included three dimensions: (a) the institutional, financial, and international development-specific context in which nonprofits operate; (b) nonprofit managers’ level and nature of experience in collaborations with businesses; and (c) their expectations and challenges in these collaborations. Interviews were conducted through Skype or in-person, audio-recorded, and transcribed verbatim.
From our initial readings of transcripts, perceptions of power imbalance and concerns with mission drift related to resource dependency emerged as major issues for nonprofit managers. We then conducted a narrower literature review focused on resource dependency and power relations. The “material” and “symbolic” nature of exchanges referred to in the resource dependency literature appeared insufficiently specific to operationalize our data analysis. Thus, we elaborated the resource profile construct to specify the terms of our resource-based analysis of managers’ perceptions of power relations. We coded the interview transcripts with NVivo by identifying analytical themes and subthemes (Miles & Huberman, 1994). We established the following thematic structure: resource profile (subthemes: funding, learning, networking, branding), power, expectations, challenges, organizational description, and governmental relations. We also labeled all organizations by resource profile cluster (Explorers, Intermediates, Seasoned), type of organization (federated nonprofit, non-federated nonprofit, governmental agency), and core focus (field operations, umbrella/network).
This coding strategy facilitated our identification of relationships between themes/subthemes that were either common across resource profile clusters (e.g., power/learning) or cluster-specific (e.g., expectations/funding/Explorers). Adopting organizational population ecology as our primary analytical level, we generated coding matrices with resource profile clusters in rows and themes/subthemes in columns for managers’ (a) perceptions of power relations, (b) expectations related to collaborations, and (c) challenges experienced in collaborations. This structured a robust comparative analysis of subthemes within and across clusters. Quotes presented below were edited to preserve informants’ confidentiality. Both a strength and a limitation of our data are its focus on a global population of nonprofit managers with a broad range of resource profiles across countries but facing common macro-trends and meso-issues.
Analysis and Findings
We present our findings in two sections. First, we analytically describe the resource profile clusters. Second, we perform a cross-cluster analysis of resource profiles and elaborate a set of theoretical propositions to specify our contributions and guide future research.
Analytical Description of Clusters
We call the three distinct resource profile clusters emerging from our empirical analysis: Explorers, Intermediates, and the Seasoned. First, for each cluster, we use survey data to describe the general characteristics of organizations included. Then, we use interview data to qualitatively describe the four components of resource profiles in each cluster. We support our cluster descriptions with tables featuring representative informants’ quotes.
Cluster 1: Explorers
This cluster is composed of eight organizations: five non-federated NGOs and three nonprofit umbrellas. The five NGOs are headquartered in developing countries. The three umbrellas are headquartered in developed countries; each umbrella oversees several small NGOs. All organizations had 2013 budgets under US$2 million. Explorers had engaged in 0 to 4 collaborations with businesses in the 5-year period prior to the study. Table 3 contains representative quotes for each component of Explorers’ resource profiles.
Explorers Cluster: Informants’ Quotes.
Note. NGOs = nongovernmental organizations.
Explorers deal with stretched and often temporary human resources. Their funding sources are scarce and precarious. As the majority are headquartered in developing countries, their access to core funding from their home governments is limited or inexistent. Their geographical location limits opportunities to find businesses interested in collaborating with them. “Large international companies operating here are all headquartered in New York or London, where they have their corporate social responsibility (CSR) budget,” said one informant. Because of Explorers’ weak branding resources, businesses seeking reputational benefits are often uninterested in collaborating with Explorers.
The scarcity of opportunities available to Explorers for collaborating with businesses makes it difficult to gather learning resources. Their few past or ongoing collaborations with businesses, if any, are at a philanthropic or early transactional level (Austin, 2000). Some receive technical assistance or monetary contributions from businesses to support short-term initiatives. Given the rare governmental funds available to them, tapping into private-sector resources is key to Explorers’ survival and organizational development. Yet, their managers tended to be quite concerned that collaborating with large companies may force them to drift away from their commitments to beneficiaries. They tended to view collaborations with small and medium-sized enterprises (SMEs) as a wiser and safer initial step to initiate the learning process.
However, some Explorers highlighted that their small size could also be an asset as it makes them more agile and closer to local communities, in comparison with larger NGOs that can be entrenched into established procedures and institutional interests. They presented this as an overlooked strength which they needed to find how to brand to attract businesses’ interest in collaborating with them. An Explorer’s manager mentioned focusing on collaborations with foreign companies doing business in their home (developing) country, in which this NGO had a strong, grounded understanding of the local culture and presence in community networks. They hoped to build on these local ties as a springboard to engage with businesses and expand their activities abroad.
Cluster 2: Intermediates
This cluster is composed of five organizations: two non-federated NGOs, two federated NGOs, and one governmental umbrella agency. All are headquartered in developed countries. Their 2013 budgets ranged from US$2 to US$49 million. Intermediates had engaged in three to more than 10 collaborations with businesses in the 5-year period prior to the study. Table 4 contains two representative quotes for each component of Intermediates’ resource profiles.
Intermediates Cluster: Informants’ Quotes.
Note. NGO = nongovernmental organization.
Compared with Explorers, Intermediates are more advanced in gathering learning resources related to collaboration with businesses. All were founded several decades ago and receive significant core funding from their home governments. Their established networks among nonprofits and with public- and private-sector entities are significantly more extensive. Their branding resources are stronger: They tend to be a known brand to private companies, public agencies, and the public at large. Some are part of an international federation, which allows them to leverage their confederates’ learning resources and networks across countries.
These organizations have been cultivating symbiotic relationships with their home governments, collaborating with public-sector agencies and engaging with multilateral funders for a long time. However, collaborating with businesses remains a recent organizational development for them. It is a trend that has been accelerating and in which they seek to expand their engagement in terms of number, depth, and time horizon of collaborations. They are actively learning how to select and vet collaborators (due diligence), co-manage and co-govern, engage stakeholders, and evaluate the outcomes of collaborations.
Intermediates are exploring diverse modes of collaboration such as corporate volunteering programs and co-bidding (i.e., jointly submitting a funding proposal with a business). Most of them are opposed or reluctant to engaging with extractive companies, seeing it as too risky to their reputation and difficult to manage given the typically large size of some of these firms and consortia. They proceed step by step and cautiously along Austin’s (2000) collaboration continuum, engaging in philanthropic, transactional, and early integrative collaborations. Intermediates’ managers tend to see collaborating with SMEs as closer to their “comfort zone” and many remain hesitant to collaborate with multinational corporations.
Cluster 3: Seasoned
This cluster is composed of five organizations: three federated NGOs and two non-federated NGOs. All are headquartered in developed countries. Their 2013 annual budgets ranged from US$20 million to more than US$50 million. They had been involved in more than 10 to several hundreds of collaborations with businesses in the 5-year period prior to the study. Table 5 contains two representative quotes for each component of the Seasoned’s resource profiles.
Seasoned Cluster: Informants’ Quotes.
The Seasoned mobilize impressive arrays of resources. All are headquartered in developed countries, all have been operating for several decades, and several of them are part of an international federation. They are engaged in large numbers of collaborations with businesses across various countries and industries. Their networks encompass close collaborative relationships with governmental agencies in both developed and developing countries as well as with various types of nonprofits, including professional and industry associations both at home and abroad.
The Seasoned engage in a broad array of ongoing philanthropic, transactional, and integrative collaborations (Austin, 2000). Some of these collaborations span long-term horizons and include multiple collaborators across sectors. They deploy wide-ranging and systematized learning resources, enabling them to rigorously vet collaboration candidates and implement structured co-governance and monitoring mechanisms both at the headquarters and in field operations. For decades, the Seasoned have benefited from significant core funding and very close relationships with their home governments.
The Seasoned’s collaborations with businesses sometimes include joint bids for governmental or multilateral agency funding. In such arrangements, an NGO and a business engage in collaboration before the inception of a project to respond together to requests for proposals from funding agencies. In some cases, the business collaborator even manages the collaborative project’s joint budget. Such collaborations imply deep reciprocal commitment and mutual strategic adaptation. Several informants highlighted that much of the success of nonprofit–business collaboration depends on developing an understanding of cultural differences across sectors and on cultivating strong and frequent relational ties with collaborators, which they describe as a resource-intensive process unfolding over a long-term horizon.
Contrary to the other two clusters, the Seasoned display much greater confidence in their branding resources. They leverage their global reputations to collaborate with large and highly resourceful corporations with very little fear of being co-opted. As part of their branding resources, their track record as an experienced and reliable cross-sector collaborator gives them access to multiple opportunities to collaborate and further expand their already extensive networking resources.
A Resource Profile Framework of Power Relations
In this section, we present cross-cluster analysis of resource profiles. To address our research questions, we elaborate an integrative framework based on which we develop theoretical propositions to explicate how nonprofit resource profiles affect managers’ perceptions of power relations, and in turn, how these perceptions link to their expectations and challenges related to collaborations with businesses.
Figure 2 illustrates our integrative framework. The dotted box around the framework represents the resource environment within which nonprofits and businesses interact. The unidirectional, dotted arrow pointing downward represents resource–environment pressures on nonprofits. The bidirectional full arrows represent collaborations among nonprofits on the left, and nonprofit–business collaborations on the right.
Resource profile framework of power relations.
First, we compare across clusters the influence of nonprofit resource profiles on managers’ perceptions of power relations in collaborations with businesses. Table 6 offers a matrix of representative informants’ quotes to support the analysis.
Nonprofit Managers’ Perceptions of Power Relations in Collaboration.
Note. CSR = corporate social responsibility; NGOs = nongovernmental organizations.
Managers in all three clusters perceive collaborating with SMEs as closer to their “comfort zone.” However, attitudes toward collaborating with large corporations vary greatly across clusters. While co-optation is a major concern for Explorers due to their general lack of resources, the Seasoned express strong confidence in their capability to manage power relations with large corporations given their wide-ranging resource profiles. Over the years, the Seasoned and to a lesser degree Intermediates have developed an array of tools, processes, structures, and cultural understandings enabling them to effectively select and vet collaborators, proactively manage and evaluate collaborations, and institutionalize co-governance.
Explorers perceive collaborations with SMEs as a safer initial step to gather collaborative learning resources. Explorers are mostly reluctant to collaborate with large corporations in the short term as they seek to protect their independence and guard against mission drift. While Intermediates tend to stay away from extractive companies, the Seasoned actively engage in these collaborations and manage power relations by diversifying alliances, forming coalitions, and mediating between extractive companies, local authorities, foreign and local businesses, and local communities.
With weak learning resources and overstretched staffing, Explorers’ managers tend to perceive their organizations as simultaneously vulnerable to the whims of their private-sector counterparts and dependent on resources from them to survive and pursue their missions. Comparatively, Intermediates and the Seasoned possess broader and deeper learning resources related to collaboration (due diligence, co-governance, stakeholder engagement, outcome evaluation), wider cross-sector networks (including, for some, membership in an international federation), and higher brand recognition both at home and internationally.
We observed major differences across clusters in the length, depth, and complexity of collaborations undertaken with businesses. Using Austin’s (2000) typology, while Explorers’ collaborations do not tend to go beyond the philanthropic and early transactional stages, the Seasoned manage broad portfolios of philanthropic, transactional, and integrative collaborations with small, medium, and large businesses. “We’ve been working with some of our corporate volunteering multinational partners for over 10 years, but . . . now it’s more about real partnerships involving co-designing and co-managing projects, although we’re not there with all partners,” says a Seasoned’s manager. Comparatively, an Intermediate’s manager notes, “We haven’t yet implemented specific corporate volunteering programs; it’s more in the form of internships . . . We’re open to that but it’s a beast we have yet to domesticate.”
Our cross-cluster analysis of managers’ perceptions suggests significant covariance between learning and networking resources. Collaborative capacities enable the expansion of collaborative network ties. Concurrently, a nonprofit’s broad and expanding pool of collaborative networking feeds opportunities to further expand collaborative capacities.
Meanwhile, what appears to work as a virtuous circle for the Seasoned—and to some extent for Intermediates—seems like vicious circle for Explorers. With weak established capacities to collaborate with businesses, Explorers experience difficulties to engage in collaborations of even low strategic significance with businesses. Concurrently, restricted access to collaborations with businesses may severely limit their opportunities to build collaborative capacities.
Next, we analyze nonprofit managers’ expectations in collaboration with businesses across resource profile clusters. Table 7 presents a matrix of illustrative quotes in support of this analysis.
Nonprofit Managers’ Expectations in Collaboration.
Note. NGO = nongovernmental organization.
Nonprofit managers across resource profile clusters experience an increasingly competitive resource environment characterized by heightened competition among NGOs over shrinking governmental funding dedicated to international development. They experience growing pressures from governmental and multilateral sponsors to collaborate with businesses. Formal collaboration agreements between NGOs and businesses are increasingly becoming mandatory in requests for proposal posted by international development funding agencies.
In this resource environment, nonprofits in all clusters feel pressured to collaborate with businesses to meet funding agencies’ expectations and requirements. Nonprofits across clusters also see collaboration with businesses as necessary to diversify their funding resources away from governmental dependency. These funding environment pressures motivate nonprofits to strengthen their cross-sector networking resources. While some Seasoned managers noted that collaborating with businesses enhanced their branding, Explorers and Intermediates did not mention this as an expectation. Funding pressures appear as a major incentive driving nonprofit managers’ motivation to expand their collaborations with businesses.
This proposition combines with earlier propositions to the effect that, although higher competition for public funding may incentivize all nonprofits to pursue greater collaboration with businesses, different levels of learning resources will enable large nonprofits to effectively expand their cross-sector networking resources while constraining small nonprofits from doing so. Next, we compare the major challenges experienced by nonprofit managers in collaborating with businesses. Table 8 presents illustrative quotes to support this analysis.
Nonprofit Managers’ Challenges in Collaboration.
Note. CSR = corporate social responsibility.
Nonprofit managers across resource profile clusters experience increasing competition for governmental funding and growing pressure from public-sector funders to collaborate with businesses may have the adverse effect of eroding collaborative ties among nonprofits, as observed by this Intermediate’s manager: In the last few years, there has been a slowdown in collaborations with other NGOs . . . Our government has created an environment where NGOs are in competition with one another, which has brought us to turn inwards and protect our secret recipes.
Informants across clusters reported similar experiences confirming this trend. Lesser collaboration among nonprofits may, in turn, increase nonprofits’ dependency on collaborations with businesses.
With difficult access to public funding, Explorers’ ability to survive and develop their activities largely depends on accessing alternative sources of funding from the private sector. Meanwhile, the weakness of learning resources makes it difficult for Explorers to engage in collaboration with businesses without concerns of co-optation and mission drift. Although Intermediates and the Seasoned possess stronger capacities to find, vet, govern, and evaluate collaborations with businesses, informants in these resource profile clusters also frequently highlight the importance of actively managing the operational and reputational risks associated with asymmetrical power relations. However, while Explorers’ managers perceive their organization as being vulnerable to the influence of resourceful business counterparts, observations from several informants suggest that managers of resourceful nonprofits should keep in mind the opposite risk as well. That is, highly resourceful nonprofits may generate significant dependencies on the part of SME collaborators and risk exercising dominant influence on these collaborations, especially when they occur in resource-poor environments.
In summary, our comparative analysis of nonprofit resource profile clusters in terms of their managers’ perceptions of power relations and expectations and challenges in collaborations with businesses suggests several lines of inquiry. Based on this analysis, we invite nonprofit researchers to test and complement our theoretical propositions to advance nonprofit-centric understandings of power relations in collaborations with businesses.
Discussion and Conclusion
Our exploration of nonprofit managers’ perceptions of power relations in collaborations with businesses revealed the need for greater integration in the nonprofit-centric understandings of power relations. To address this gap, we elaborated the nonprofit resource profile analytical construct which integrates funding, learning, networking, and branding resources. We then embedded this construct into a broader framework that connects these resource components to each other and considers them within nonprofits’ broader resource environment.
With this framework, we make several contributions to research and practice. The first contribution is practical. We offer an empirically grounded analytical tool for nonprofit managers to evaluate power relations with business based on organizational resources at their disposal. This tool embeds the resource profile analysis into the broader dynamics of the cross-sector population ecology in which nonprofits operate. The framework can usefully inform nonprofit managers’ decision making in ongoing and prospective collaborations with businesses.
The second contribution is conceptual. We assemble research efforts on power relations in nonprofit collaborations with businesses into an integrative construct specifying the main components of nonprofit resources. We then place this construct within a broader framework bridging the meso (organizational resource mobilization) and macro (cross-sector resource environment) levels of analysis. The third contribution concerns future research on nonprofits. We guide future research by offering a set of theoretical propositions on power relations in nonprofit–business collaboration. We invite nonprofit researchers to test and complement our propositions to advance existing knowledge in this field.
Earlier studies have highlighted the key importance of nonprofits’ learning resources—their capacities to find, vet, govern, and evaluate collaborations—to enable the scaling up of their engagement in collaborations with businesses (Austin, 2000). Nonprofits’ learning resources have been described as critical to the effective management of risks related to their branding resources—their public image, reputation, and credibility—in collaborations with businesses (Al-Tabbaa et al., 2013; Baur & Schmitz, 2012; Herlin, 2015). Our findings support these observations and highlight that nonprofits’ degree of learning resources significantly conditions their ability to expand their cross-sector networking resources.
Also in line with earlier studies (Austin, 2000; Yaziji & Doh, 2009), many of our informants noted that pressures from the funding environment, including the decline of governmental funds for development and growing support of sponsors for cross-sector collaboration, incentivized them to intensify their engagement with businesses. Our findings suggest that these resource–environment pressures tend to increase the competition among nonprofits for collaborations with businesses (cross-sector networking) and erode collaborative ties among nonprofits (intra-sector networking). This erosion of intra-sector networking resources may in turn increase nonprofits’ resource dependency on collaborating with businesses.
Nonprofit studies tend to assume that power asymmetries in collaborations typically favor businesses at nonprofits’ expense. Consequently, several studies highlight the risk that collaborations with businesses result in nonprofits’ co-optation and mission drift (Baur & Schmitz, 2012; Herlin, 2015; Schiller & Almog-Bar, 2013). Elbers and Schulpen (2011), however, point in a different direction. They show that some resourceful nonprofits wield controlling influence over collaborations by excluding or limiting the participation of their local partners in strategic decision-making processes. Our findings suggest that this infrequent line of inquiry deserves further research. Indeed, some multinational nonprofits based in developed countries mobilize extensive resource profiles and have a vastly greater influence capacities than their multiple microenterprise and SME collaborators in developing countries. Given the major ethical implications of such power dynamics, we argue that resourceful nonprofits may consider implementing measures to prevent their exercise of controlling influence and preserve the independence of their smaller local business and nonprofit collaborators.
Based on this discussion, we suggest three important opportunities for future research. The first opportunity concerns the trajectories of nonprofit resource profiles in collaborations with businesses. Future research could investigate whether Explorers are stuck in this cluster given the constraints posed by their resource limitations or if critical paths exist to enable their shift to more advanced resource profile clusters. Such research should investigate the conditions and processes enabling nonprofits to shift from one cluster to the next.
The second research opportunity focuses on nonprofits’ different types of business collaborators. By assuming that power asymmetries disadvantage nonprofits in collaborations with businesses, nonprofit-centric research on cross-sector collaboration (Baur & Schmitz, 2012; Harris, 2012; Schiller & Almog-Bar, 2013) has tended to overlook the diversity of nonprofits’ business collaborators. Accordingly, future research could examine power relations in nonprofits’ collaborations with businesses of different sizes—including microenterprises and SMEs—located in both developed and developing countries. Such research may well challenge the dominant view of power asymmetries in nonprofit–business collaboration by highlighting the vulnerability to co-optation by resourceful nonprofits of small enterprises operating in resource-poor environments.
As for the third research opportunity, although our study has focused on nonprofit–business collaboration, we believe that our resource profile framework can inform the practice and research related to collaboration among nonprofits. Indeed, collaboration among nonprofits is an important endogenous variable in our resource–environment model of analysis (as illustrated in Figure 2). We argue that many of our arguments and propositions related to nonprofit–business collaboration are also relevant to the analysis of collaboration among nonprofits, although they may apply differently. Thus, we invite researchers of collaboration among nonprofits to adapt our resource profile framework and extend its implications to that distinct although intimately related domain of empirical research.
Finally, while our study considers power as derived from resource dependency, research on interorganizational collaboration highlights that power is a complex and multidimensional notion. For instance, Hardy and Phillips’s (1998) study of cross-sector collaboration in the U.K. refugee system indicated that collaborations are shaped by covert conflict dynamics. They also noted that power in interorganizational collaboration is derived not only from resource dependency but also from control over decision-making processes, as well as from the discursive legitimacy that enables actors seen as credible to define the issues in collaborative domains. Resource dependency being the primary lens of power analysis in existing nonprofit-centric studies of cross-sector collaboration, we argue that research on other “faces” and “sites” of power (Fleming & Spicer, 2014) is needed to complement and diversify the understandings of power dynamics in this emerging body of studies.
Footnotes
Acknowledgements
We wish to thank Michel Chaurette, Christina Jenkins, Ann Langley, and Julia Sánchez for their important contributions to the study, as well as Editor Chao Guo and the anonymous reviewers for their insightful guidance which has greatly improved this article.
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
