I really like this post from Entry Level Living about the need for nonprofits and for-profits to collaborate in these dicy economic times. She lays out some good examples of collaboration and ties it into a compelling sandwich. But it also begins with a an false cliche (nonprofits war with the for-profits) and doesn’t actually get beyond the the assumption that collaboration is an intrinsic good. The interesting and unanswered piece (for anyone who isn’t a millennial, like the Allison of Entry Level Living and I) is: why the hooey should we care about collaboration?

The answer: you shouldn’t. You should care about creating value, collaboration is just a means to getting there (and not the only one, at that). Entry Level Living lays out some fine examples that do create value, but doesn’t provide a strict method for thinking about value-creation.

So let’s talk about value:

Nonprofits tend to talk more about values—our mission, our vision, our culture of caring—than the value (no ‘s’) we create. Most of the value we do talk about is tied up into our values. The value theory of nonprofits mostly has to do with creating moral goods: things someone is morally obligated to strive for (education, self-reliance, non-violence, positive familial and community relations, etc.). In nonprofit parlance that is called Social Value.

We tend not to talk about the Economic Value we have: our brand and name-recognition; our well-developed skills or expertise; and our general social authority and legitimacy (a fancy way of saying people trust us)… to name a few.

While Social Value is good (duh!), it has no meaning in cross-sector collaboration: it’s just not the business of business. Economic Value is meaningful for cross-sector collaboration, and that’s where nonprofits should be spending their time. If you’ve ever heard someone say “ Monetize your Core Competencies”, they’re talking about your Economic Value, not your Social one.

So now that you know about value, how do you create it in cross-sector collaboration? To begin with, we’re going to toss the word collobaration and replace it with a broader and more neutral term: negotiation. While collaboration may be a strategy within negotiation, negotiation encompasses the entire scope of communication that you may be engaged in.

Cross-sector negotiation means thinking of creative ways to combine your nonprofit’s Economic Value with a for-profit’s Economic Value in such a way that you create more value than existed in the first place.. In negotiation theory, this is called “joint value”. In more metaphorical terms, you’ve just enlarged the pie.

For example, if you’ve ever had a corporate volunteer day, you’ve done exactly this: you combined your social authority and legitimacy as do gooders with a for-profit’s staff-as-volunteers. The for-profit received CSR (Corporate Social Responsibility) PR and personal development (the warm fuzzies) for staff; you received cheap labor; and both of you did it for less than the cost of an alternative plan (advertising campaign and professional staff development for them; part-time paid labor for you).

Nonprofits and for-profits aren’t at war; they are just similar looking games with somewhat different rules. The secret to winning is to look for cross-over skills, strategies and players. Evaluating the economic value of your nonprofit is a good place to start.