Public services, particularly in sparsely populated areas, are increasingly required to demonstrate their value-especially in terms of the public benefits they provide to local communities. In Scandinavia, local civil society organizations have long been overlooked as key partners in creating public value together with municipalities. Since 2010, Sweden has been experimenting with collaborative co-creation models that involve both municipal and third sector service providers. This article explores the specifics and reception of such models in rural areas of Finland and identifies the key lessons learned. It delves into the impact of legal frameworks and entrenched public sector norms on the success of these initiatives. The aim is to enhance the understanding of the prerequisites for applying this model among public and civil society actors. The article explores the spread of an innovative model for state-third sector partnerships used in Sweden among local governments in Finland. The study employed action-based research to generate and analyse data from four self-selected municipalities. The study reveals major facilitators and obstacles in spreading and adopting collaborative cross-sector models as they go beyond simple methodological or legal issues and require a shift in public sector logics and identities. The results suggest that resistance is more 'in the heads' of municipal managers and politicians and engrained in administrative traditions than in legal paragraphs or financial shortages.