Business-nonprofit engagement in sustainability-oriented innovation: what works for whom and why?

Sustainability-oriented innovation (SOI) involves changing products, processes, organizations and wider systems to deliver environmental, social and economic value. Nonprofit organizations can contribute the external knowledge required for SOI; however, businesses can find it difficult to engage with nonprofits due to their contrasting institutional logics. This article explores what works in these partnerships. Findings from five case studies of SOI projects involving business-nonprofit engagement are synthesized into a context-intervention-mechanism-outcome (CIMO)-logic framework. Value outcomes occur through three mechanisms where partners: 1) secure value by enforcing their own interests (agent control); 2) recombine their assets and capabilities to create value for partners, society and the environment (resource integration); and 3) navigate differences between institutional logics to enhance shared value (value empathy). The salience of contextual factors, including compatibility of what the authors term engagement logics as well as institutional logics, influences the interventions deployed, the mechanisms through which interventions operate, and outcomes. The framework offers practitioners a tool for selecting interventions in their own context.