Yet despite their differences, these alliances tended to follow similar paths. We compared their experiences to partnership development processes recommended by social sector and business analysts for same-sector alliances and found many similarities. From this information we constructed a step-by-step process to guide business and social sector organizations seeking cross-sector relationships. 

Of course, the challenges of cross-sector partnerships vary from those typical in either sector. Many common pitfalls of social sector partnerships, such as turf battles and competition for resources, don’t apply in a cross-sector context. Similarly, some of the typical challenges of business alliances, such as the threat of acquisition and concerns about sharing proprietary information with a potential competitor, should not arise when the partner is a social sector organization. 

Instead, other obstacles loom large in cross-sector partnerships. These include:

Different language–neither sector has a monopoly on jargon.

Different culture--the stereotypical business with its “time is money” orientation will clash head-on with a slower moving, consensus-oriented, and resource-conserving nonprofit.

Different status–implicitly, because of their greater resources, businesses may expect or receive deference from their nonprofit partners.

Different world views–nonprofits may consider business to be “part of the problem” and view a business partner only as a check writer, while a business may believe social sector organizations are inefficient and unaccountable.

Different bottom lines–because each sector measures success differently, cross-sector partners may clash over goals for the alliance.

If the parties talk about their differences and work to appreciate the others’ needs and style, meaningful cross-sector partnerships can develop and flourish. Following the process laid out below will help organizations address differences and form strong, mutually beneficial alliances.

To continue reading about the five phases of cross-sector partnership development, click to download PDF file.

Table 1

Philanthropic transactions

A business donates funds, goods, or services to a social sector organization

Examples:
Home Depot provides employees, supplies, and cash to KaBOOM! to build playgrounds in low-income neighborhoods
Microsoft provides software, hardware, and technical expertise to public libraries through the American Library Association if furtherance of the ALA’s goal of providing public access to computers through libraries

Marketing transactions

A business affiliates itself with a social sector organization to improve its marketing position

Examples:
Denny’s rebuilds its public image and employee morale after negative publicity by raising money for Save the Children’s new US urban programs
Bank Boston strengthens its community relationships by sponsoring a team of City Year members to spend a year in full-time national service
Calphalon increases sales and association with top chefs through a cause-related marketing deal with Share Our Strength, a leading anti-hunger organization

Operating transactions

A social sector organization helps a business improve its capacity to produce goods or services more competitively

Examples:
Pioneer Human Services provides jobs for its ex-offender clients by contracting with Boeing to parts for commercial aircraft
Newton-Conover Middle School increase parent involvement by sending guidance counselors to meet with parents at their workplace, Ridgeview, Inc., a hosiery manufacturer seeking to improve its ability to attract workers through its family-friendly policies