Magazine article Stanford Social Innovation Review

Partnerships for LEARNING

Magazine article Stanford Social Innovation Review

Partnerships for LEARNING

Article excerpt

Managing Tensions in Nonprofit Organizations' Alliances with Corporations

aMONG THE peaks of the Sierra Madre Mountains lies the verdant El Triunfo Biosphere Reserve, one of the most pristine areas remaining in Mexico and the laboratory for a new kind of business and nonprofit partnership. Hidden under the canopy of giant ferns and evergreens grow "shade" coffee shrubs, flourishing not only with less sunlight and water but with less chemicals and soil. Protected from the elements and nurtured through organic farming, the crop yields a dark roasted harvest - one destined for a Starbucks near you. Last year, Starbucks bought 1.5 million pounds of Organic Shade Grown Mexico coffee from that region of Chiapas.

Symbiotic, too, is the public-private alliance behind the coffee: a partnership founded five years ago by Starbucks and nonprofit group Conservation International (CI). After CI identified Starbucks as a potential partner, its senior staff set up a meeting with corporate representatives.1 After four months of negotiation, the two decided what each would provide and when. With funding from Starbucks, CI has trained local growers in organic farming methods and has run a nursery that sells seedlings and organic fertilizer at nominal prices. As farmers deliver, CI samples and grades each lot, attending to the quality control needed to sustain Starbucks' market for the coffee.

The result? "Our project in Chiapas has resulted in a 40 percent average increase in coffee farmers' earnings, a 100 percent growth in the cooperative's international coffee sales, and $200,000 in non-Starbucks harvest loans to farmers' cooperatives," said Peter Seligmann, Conservation International's chairman and CEO.2 Starbucks is also pleased: "The project has produced a sustainable solution for protecting the reserve, raising farmer income, and producing high-quality shade-grown coffee for Starbucks customers," said Orin Smith, the company's president and CEO.3

Beyond the success of its project, the alliance illustrates a growing shift toward cooperation among corporations and environmentalists. In researching nonprofit-corporate alliances that address internal operating practices, we discovered that one of the most important reasons behind the trend is that both see cooperation as potentially more effective for learning how to solve environmental problems than the adversarial tensions that often accompany public conflicts over business practices. By working together, companies can draw on the experience of environmental interest groups to improve both environmental and economic performance. In turn, nonprofits learn about how corporations deal with environmental issues, thereby increasing their capability to influence changes in corporate management practices. And by working directly with corporations to create programs to address environmental impacts of company facilities and operations, nonprofits can help prevent environmental harm from manufacturing and distribution instead of simply reacting to the results after the fact.

How can corporations and nonprofits best manage these kinds of partnerships? We examined the collaborative activities of a sample of 50 international corporations whose environmental performance reports were listed on the Web site of the United Kingdom's Centre for Environmental Informatics.4 Together, the 50 companies had more than $1.8 trillion in worldwide annual sales and employed more than 5.3 million people. We also conducted a more in-depth analysis of eight major alliances, including interviews with 16 nonprofit and corporate participants.5

We found that even if all of the critical individual characteristics of the partners are in place (sidebars, p. 33), the success of nonprofit-corporate alliances seems to depend on another set of factors - the ability of both parties to manage internal tensions arising from differences in their purposes, structures, and perspectives. Most of the participants in the alliances we examined noted the opportunity for nonprofits and corporations to learn from each other as one of the strongest mutual benefits of collaborating. …

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