Scratch My Back, and I'll Scratch Yours: Scratching the Surface of the Duty of Care in Cross Sector Collaborations -- Are For-Profits Obligated to Ensure the Sustainability of Their Partner Nonprofits?
29 Pages Posted: 26 Aug 2012
Date Written: 2012
The cross-sector interactions between Nonprofit and For-profit institutions create rich opportunities to explore new and varied corporate dynamism through collaboration on the path to a philanthropic goal (the “Collaboration”). Each organization offers opportunities to the other collaborating entity from which to gain. In this way, a Nonprofit can benefit from collaborating in a cross-sector Collaboration from, among other things, access to funds, resource and time donations, availability of new ideas, learning and expertise, developing new contacts and business avenues, and broadening the Nonprofit's market. In turn, For-profits may benefit from the Collaboration by improving good will and respectability of the corporate image, engendering trust, accessing new learning, creating new markets, and attracting new employees. To accomplish effective implementation and continuation of the Collaboration, both entities should be aware of the possible corporate governance issues posed by the Collaboration and the corresponding options for the business. Too frequently the legal issues, such as corporate governance, are marginalized by management in favor of the business issues. The legalities can affect the business' viability and productivity depending on the information known and decisions made, and therefore, should be an integral part of management decision making.
Keywords: nonprofits, for-profits, collaboration, duty of care
JEL Classification: K2
Suggested Citation: Suggested Citation