What’s in a name? Everything.
Having recently finished Tom McLaughlin’s terrific second edition of Nonprofit Mergers & Alliances, I find myself looking at collaborations with the benefit of his helpful lexicon. And now that I have an improved working knowledge of the many shapes, sizes and formalities in which collaboration can be formed, according to his C.O.R.E. model, I have a greater respect for the robust effort behind them. What’s more, this book gave me clarity on the existing partnerships I have. If you have ever considered a collaboration or are currently in one or more, I encourage you to read on. You’ll find it very interesting to see how your personal definitions are realigned by McLaughlin’s perspective. Before we take a look at McLaughlin’s mini-glossary, let’s take a brief look at his model.
The C.O.R.E. Continuum
According to McLaughlin, the C.O.R.E. model is based on the premise that different forms of collaboration affect different aspects of the nonprofit. The four aspects affected are: 1) Corporate, 2) Operations, 3) Responsibility, 4) Economics. By corporate, the author means the legal entity of the nonprofit corporation or the business structure that has an official purpose: board of directors, officers, bylaws, etc. Many collaborations affect the operations, or the heart of the nonprofit’s unique reason for being, often referred to as programming. Responsibility in this model means the backbone that makes the organization run or oversight of program activity such as paychecks, paying bills, etc. Lastly, economics can be affected by collaborations and can be as simple as bartering free office rent for services or as complicated as establishing a jointly owned company.
Applying the model is best explained by stacking the acronym vertically with “C” at the top and “E” at the bottom. This silo of letters, representing each affected aspect in collaboration, shows the earliest and easiest area of impact at the bottom (Economics) and highest, most powerful choice that takes the longest to achieve, a single entity in the marketplace (Corporate). Collaborations involving any or all three of the O, R and E levels are alliances. Those involving all four levels of the C.O.R.E.™ Continuum are mergers.
What each level of collaboration on the C.O.R.E.™ Continuum looks like
Economic-level collaboration is characterized by sharing information or bidding jointly, for example. Sharing information is quick, easy and inexpensive. However, disadvantages include: there are no guarantees of gain, there are no structured means of following up on any gains and any gains are hard to document. Responsibility-level collaboration means sharing management and administrative chores, and it requires standardization, replicability and scale. For example, United Way standardized and centralized their campaign pledge forms through a national electronic system. Another example is referred to as “circuit riders” or professionals who travel from one partner to the next, performing the same task for everyone, such as accounting. Operations-level collaboration is the level of integration that ultimately means the most for any merger or alliance of nonprofits because without success here, nothing else matters. This level of cooperation looks like shared training, joint programming and/or joint quality standards. McLaughlin notes that, “Good programmatic collaboration requires excellent planning, patience, and time.” Corporate-level mergers experience the most profound level of change. It carries the identity that our programs use in their interactions with the outside world. It is also the basis of accountability and the reconciler of conflicting demands on resources. And, it is the level at which partners will integrate at the structural, governance, and board levels, including ancillary boards and committees.
McLaughlin’s Mini-Glossary further illustrates the different points of collaboration along his continuum:
Affiliation. The lowest level of collaboration. Requires little more than meetings and good faith.
Alliance. Collaborations that entail change on any one or all three of the C.O.R.E. levels.
Collaboration. Our generic term for what happens any time two or more nonprofits work together in some formalized way.
Merger. A collaboration that entails change on all four C.O.R.E. levels.
Network. Another name for alliance, or a shortened reference to integrated service network.
Partnership. A legally binding agreement between two or more entities that is intended to produce economic benefit for both that is to be shared in some predetermined fashion. Partnerships can operate at any level of the C.O.R.E. continuum because they are simply legal vehicles for collaboration.
Email us at Mail@CausePlanet.org for a free article by author Thomas McLaughlin, “Management Company Model: It’s a Nonprofit Merger by Another Name”