3 Principles to Guide Nonprofit/For-Profit Partnerships

How to think about when and when not to partner.

September 9, 2021

Recently, we discussed some of our concerns about colleges and universities outsourcing core functions to external partners. As we hope we made clear there, despite our concerns, we fully appreciate that healthy partnerships with external vendors are necessary for many of the aspects of running a complex organization.

But many institutions choose to outsource functions for reasons that are often shortsighted. Sometimes it’s because near-term profit targets drive decisions rather than long-term investments that shore up the stability of the institution.

Occasionally, it’s simply because of a concern about a competitive advantage that other schools might have. We suspect that more often than not it’s because of a lack of understanding of what it means to create these services in-house (and fear of the up-front costs).

So when should schools make decisions to create these partnerships? We want to suggest three principles to guide these partnership decisions, particularly as they relate to teaching and learning.

Principle No. 1: Partner when the function is tangential to the core mission.

Delivering on the teaching and learning mission of higher education requires significant infrastructure. Some aspects of this infrastructure are expensive to develop and maintain, and it will often make good sense for an institution to choose to work with an external partner.

Schools are almost always better off buying (or renting) the digital platforms utilized in blended and online learning rather than trying to create them internally. Coding new video-meeting platforms, learning management systems or collaboration tools are not necessarily core competencies of universities. We need these platforms to deliver online and blended learning, but we should not be creating them ourselves.

While there are examples of exceptions to this rule, very few schools have the capacity to design and develop unique enterprise-scale teaching and learning tools.

Principle No. 2: Partner when the necessary expertise is too specialized to create in-house.

This is a corollary to the first principle. There are many core competencies that a university must develop to run educational programs. Faculty bring both subject matter expertise and teaching experiences. Instructional designers and educational developers are trained in pedagogical best practices, learning science and the utilization of educational platforms. We could go on and on.

Some aspects of running degree and certificate programs, however, require specialized knowledge that might be harder to build in-house. Digital marketing for a small number of degree programs in one school may be one example. It is not clear to us that universities can develop and maintain effective and efficient domain expertise in digital marketing if these services are not serving the institution at scale.

As with the first principle, there are clear exceptions to this rule. Many schools have, for example, developed robust digital marketing services in-house, despite it being a heavy lift for others to do so.

Principle No. 3: Partner when it is impossible to go up an institutional learning curve alone.

Given the dearth of talent in certain areas, some schools may not be able to develop the internal capacities and expertise related to digitally mediated teaching and learning on their own. For schools that have neglected to build internal capacities around digital and online learning, partnering with a for-profit company may be a necessary short-term solution.

In these cases where nonprofit/for-profit partnerships are initiated due to a lack of internal knowledge or capacity, it should be the goal of the school to build toward that expertise.

Collaborations with companies should be initiated with the explicit goal of eventually bringing in-house a core set of educational capacities.

What principles do you follow when thinking about the wisdom of nonprofit/for-profit partnerships?

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