Abstract

This article aims to clarify the potential impact of cross-sector partnerships on nonprofit organizational legitimacy and to provide nonprofit organizations with strategic direction on how to approach cross-sector partnerships to avoid running into a legitimacy crisis. Five theoretical propositions are developed based on existing theory on cross-sector partnerships, organizational legitimacy, and identity and are matched with empirical data consisting of 257 survey responses and seven in-depth interviews in a single case study of a Finnish social welfare organization. Results suggest that engagement with companies may threaten NPO legitimacy by challenging core values and identity traits. Due to power asymmetries in favor of the company, the legitimacy risk is particularly serious for integrative partnerships compared with philanthropic and transactional partnerships. This condition is paradoxical, because integrative partnerships are praised for their greater societal impact and ability to generate joint innovations. Safer options include short-term, project-based partnerships managed and controlled by the NPO, except for brand licensing, which is a high-risk option. Regarding partner selection NPOs should select companies with similar values