Better together: How startups and the third sector can collaborate

Collaboration between the third sector and startups can benefit both sides.

For third sector organisations, tapping into startups’ innovative ideas and ways of working can lead to increased impact. For startups, it can make the difference between failing and scaling.

This new report by Nesta and Save the Children, in partnership with Bond, UN Innovation Network and others, analyses cases of third sector-startup collaborations, including examples from UNICEF, Save the Children and Alzheimer’s Society. The report finds that:

• The third sector is experimenting with a range of collaboration models to engage with startups, such as co-working spaces, accelerator programmes and investment funds.
• When the third sector collaborates with startups, it can increase its impact in four complementary ways: by supporting startups with similar missions and values; by rejuvenating internal mindsets, behaviours and methods; by solving challenges more effectively together; and by ensuring the long-term viability of their organisation.
• For third sector organisations, key barriers to collaboration include a lack of flexible funds that can be dedicated to innovative startup collaboration and the risk of reputational damage if collaboration goes wrong.
• For startups, key barriers include understanding how the third sector works, navigating its processes and identifying contact points.

The report aims to help third sector leaders and startups:

• Understand the value of collaborating and assess whether it is right for them.
• Identify the necessary steps to prepare for, design and carry out collaborations – and the key challenges to anticipate.
• Learn from the experience of others.

For policymakers, the report lists recommendations for sector-level changes to encourage collaboration:

• Embed innovation in trustee guidelines, for example, by including a guideline to appoint a dedicated trustee responsible for innovation.
• Broker multi-party collaborations, for example between the third sector, startups, government and corporates.
• Investigate the role of intermediaries, for example, to hold equity on behalf of third sector organisations.
• Address the funding gap, for example in the form of a sector-wide venture fund.