According to the Amherst H. Wilder Foundation collaboration is defined as “a mutually beneficial and well-defined relationship entered into by two or more organizations to achieve common goals.  The relationship includes a commitment to mutual relationship and goals; a jointly developed structure and shared responsibility; mutual authority and accountability for success; and sharing of resources and rewards.”

Collaboration, cooperation, and coordination are often interchanged.  However, each has distinct characteristics from the others:
 

Cooperation	Coordination	Collaboration
Informal relationships No commonly defined mission No formal structure No formal planning effort	More formal relationships Compatible missions	More durable pervasive relationship Separated organizations form a new structure Full commitment to a common mission Comprehensive planning effort Well defined communication efforts on many levels Resources and reputations joined/pooled causing greater risk

Because of recent natural disasters and fewer funding sources the importance of collaboration within the nonprofit community is increasingly important.  Funders are looking more and more for those organizations that are coming together in collaborative efforts to truly impact the communities in which they serve.  Every organization had its strengths and weaknesses.  By pooling resources and services organizations, especially small grassroots organizations, are able to operate more effectively and efficiently; services are not duplicated.  

Funders and nonprofit organizations are looking to get the most "bang for the buck."  Collaborations are an effective way of achieving this goal.

Source:  Mattessich, Paul. The Wilder Collaboration Factors Inventory:  Assessing Your Collaboration’s Strengths and Weaknesses.  Amherst H. Wilder Foundation, 2001.