We analyse the tensions in a hybrid collaboration (specifically, a social alliance comprising three social enterprises and a local council) and how these are mitigated using boundary-spanning community impact, leading to compatibility between distinctive institutional logics. Our qualitative longitudinal study undertaken during 2011–2016 involved reviewing literature and archival data, key informant interviews, workshop and focus groups. We analysed common themes within the data, relating to our two research questions concerning how and why hybrids collaborate, and how resulting tensions are mitigated. The findings suggest a viable model of service delivery termed hybridized collaboration in which the inherent tensions from different institutional logics do not prevent success. Paradoxically, multiple logics are a basis for the partnership’s existence, but the ability to achieve different and occasionally conflicting aims simultaneously (including “value for money” and local community benefit) can be difficult, resulting in tensions. We offer two novel insights. First, we highlight how social enterprise hybrids collaborate locally and in multi-organizational relationships. We found that the initial opportunity to collaborate was catalysed by the existence of shared objectives (to address housing need and unemployment). Pre-existing relationships between organizations, and the existence of synergistic capabilities also influence the choice of partners. Secondly, we identify how tensions arise (from differences in organizational size and available resources; ambitions for growth; and issues related to values and ethics), and are mitigated via several factors including the pre-existing relationships, allowing for regular “spaces of negotiation” between collaborators, the shared social mission, community social impact, the resulting public relations, and shared resources and knowledge.