May 1, 2011
Over the last few years, increasing attention has been paid to partnerships between nongovernmental organizations (NGOs) and private enterprise. Corporate social responsibility (CSR) initiatives such as the U.N. Global Compact, scrutiny by watchdog NGOs, and an increased focus on justice and poverty issues at venues like the World Economic Forum reflect a growing demand that companies behave responsibly. Large multinational corporations publish lengthy CSR reports displaying their accomplishments and commitment to the environment, human rights, and labor in the societies where they operate. A number of newer companies have sprung up and hold environmental and social responsibility as a core value of the business, and in some cases, even write it into their charters. As a result, more and more NGO/business partnerships have materialized as corporations invest in CSR. A multitude of case studies have examined such relationships, usually from the perspective of whether such partnerships create value for each organization, or challenging such CSR-based partnerships as corporate ‘greenwashing.’ Indeed, multiple studies have indicated there is often a disconnect between claimed CSR aims and what actually happens on the ground. For this reason, many NGOs are quite wary of partnering with corporations, fearing that their reputation might be sullied, or worse, the their constituents hurt.
In the instance where a business seriously wants to benefit a community by participating in a social project, or access an emerging market responsibly, there is a place for productive partnerships with NGOs. But finding the right partnership and getting such diverse organizations to work together productively and to the satisfaction of all stakeholders poses multiple challenges, particularly in the developing world. This paper proposes that there is a need for a third party in such NGO-business partnerships to broker such relationships, provide support in project design, and facilitate communication and collaboration among the parties to the benefit of all stakeholders in the partnership.
Why Partner in the First Place?
Why might an NGO and a business want to partner? For businesses, an NGO partnership makes a great deal of sense when they are entering a new market. NGOs are often community insiders that provide access to localized understanding and needs, and confer legitimacy to the business. Working with an NGO partner can provide a company an opportunity to “do good” and increase brand reputation and recognition through community contact. Linking with NGOs can provide unexpected customers to the business and unexpected solutions for the NGO, because NGOs frequently understand the unmet needs of the population that the company may not have thought of. An example of this occurred recently in Uganda. A group of colleagues of mine from Notre Dame were studying water issues in rural villages and discovered that the wells an NGO had installed used very old and fragile pump technology, causing the wells to break down within a year or two of use. The NGO had spent a few million dollars on such pumps, through a government grant, and had plans to purchase hundreds more. By coincidence, the students were also meeting with a General Electric representative in Kampala a few days later. At the meeting, one of the students asked what volume of businesses GE was doing in Uganda. The representative replied that they were taking in very little revenue because there was no market. Knowing GE made well pumps; the student asked if GE had reached out to any NGOs to see if they wanted to purchase pumps. The thought had not occurred to the representative. What if GE sold the pumps to the NGO? Even at a reduced price, GE would benefit from having their logo on critical infrastructure throughout the country and the NGO would provide working wells for the villages.
For NGOs, partnering with businesses might provide a certain amount of freedom from the 2-3 year grant-making cycle. NGOs are in a more powerful position to design the contours of the project with a business and demand the ability to utilize their own discretion and adapt to changing circumstances, rather than accommodating the often narrow and rigid dictates of a grant. The aforementioned project in Uganda provides another example: The NGO installing wells had a government grant to do “X” amount of wells over a two-year period. The design of the well, including the dated pumps, had been dictated by the grant. As a result, poor quality wells were installed, destined to fail, and instead of being able to fix the problem, the NGO just had to put more and more of them in to meet the grant requirement.
A strong, sustained relationship with a business puts an NGO in a position to possibly affect the policy and decision-making of the business in a positive way beyond the specific project. With knowledge of local context, needs, and sensitivities, NGOs might help avoid destructive corporate decisions made out of ignorance. NGOs can help the company identify critical stakeholders that the company’s analysis missed, or avoid conflict by foreseeing the effect of benefits conferred on one group over another. Such partnership of insiders and outsiders may provide space for the corporation to become more involved in the community and develop positive roots there. Finally, NGOs often look a lot like business consultants for their constituents; complete with erasable whiteboards and problem trees. Particularly in agricultural and consumer goods projects, NGOs are analyzing value chains, offering marketing advice, organizing fair trade distribution networks, and finding or providing sources of financing such as microcredit or SILC organizations. Under such circumstances, business insight from business partners could contribute to the quality and scope of such initiatives.
The Need for an Intermediary
A recent trip to the Philippines did much to confirm my suspicions of the need for an intermediary in business-NGO partnerships. I was with a different group of Notre Dame students, studying the coffee industry for an international NGO that works with smallholder farmers in rural Mindanao. The goal of the study was to provide a strategic decision making tool for the NGO to decide how to best advise farmers who grow coffee, and to analyze the value chain from coffee tree to cup. Coffee is a high value crop that grows well in much of Mindanao, and the NGO’s agricultural section had worked with local partners to organize groups of farmers into something akin to cooperatives. With the local and global demand for coffee growing significantly, the NGO was interested in how their farmers might take advantage of the trend. While the mountains and valleys of central Mindanao are extremely fertile, the region continues to shoulder a disproportionate share of the nation’s violence and poverty. The farmers working with the NGO were no exception; these communities are remote and have no access to electricity or other infrastructure. Many have recently experienced violent conflict between the government and rebel groups. Most of the land ownership among individual farmers is small, 1-2 hectares (10,000 square meters). However, the NGO found that economies of scale could be reached by organizing farmers into cooperatives. Our study mainly involved interviewing people: farmers, middlemen, local government officials, and representatives from coffee companies of all shapes and sizes.
During one such interview with the president of a Western multinational coffee company, I was struck by the gaping need for an intermediary. The company buys coffee from farmers all over the Philippines, including Mindanao. The president explained his company’s CSR policy and initiatives, which includes job creation, promotion of gender equality, and emergency assistance, as well as corporate sponsorship of health, education, and social welfare projects. From all indications, the company seemed to genuinely hold these social values as core to the business and sought to facilitate the farmers’ prosperity.
“The problem with all the things we’re doing is that we are becoming overstretched,” he said. “We are committed to providing these benefits to our farming partners, but it’s increasingly difficult to operate the business and do the social stuff simultaneously. We really aren’t the best people to do it anyway.” He then asked us if we could find him an NGO partner to handle that aspect for the company so they could get back to their core competencies of producing and selling good coffee. I asked him why he had not found one himself. He replied that finding a trustworthy NGO partner was a massive job in itself and he could not spare the time. He had a list of criteria that, while not unreasonable, would disqualify a number of NGOs on capacity grounds.
The coffee company’s problem illustrated that finding an appropriate partnership is hard enough, but finding one that has the potential to really work over the long run is a whole other matter. Considering the vast differences between corporations and NGOs in structure, capacity, funding source, objectives, organizational culture and language, mission, vision, and stakeholders, it's a wonder any of these partnerships exist at all. How might a third party, committed to the best interests of the company, the NGO, and the farmers proceed in this case? Put simply, the coffee farmers want to farm and make money, an NGO wants to help the farmers use their land to escape poverty without doing greater harm, and the coffee company wants to facilitate the NGO, buy what the farmers produce, and sell it to markets in the Philippines, Europe, and North America.
But for any potential partnership, the threshold issue is who is an appropriate partner? What are the NGO’s needs and what business might have a solution? What are the corporation’s needs and which NGO might have a solution? The right partner depends on the type of project, its location, and the identity of the parties. Clearly, not all companies will fit the bill for an appropriate NGO partnership, for a “corporation seeking to actualize a contribution toward peace through its activities has to have a fairly sophisticated level of moral maturity.” Collaborative projects may vary from the lower risk-types, such as corporate sponsorship of a program (donor model) and corporate participation in an event (like employees building a house), to a more substantial investment by both parties. In such investments, the risk is heightened, and there is a huge trust issue to overcome on both sides. Like any relationship, trust is built over time, but comprehensive research done by the intermediary on the track record of both parties can do much to assuage fears and separate the wheat from the chaff. An intermediary would hunt out the right organization for the other, make sure their interests were aligned, and work to build trust.
Another key ingredient in finding the right partner is understanding that operational projects (distinguished from donor or event models), will be more effective if they harness the core competencies of both parties. For example, GE engineers things. GE is an ideal partner for engineering issues like building a better well pump, or getting a light source to rural villages, but they would not be an ideal partner in some random agricultural project. Likewise, an NGO accustomed to community organizing shouldn’t branch into rural agronomy simply because a business is willing to bankroll it. While the lack of efficacy in such situations is problematic for organizations, the real damage affects program beneficiaries when partnerships are unsuccessful. Demonstrated track records of competence in a particular field are necessary for a successful partnership.
Once a partnership is formed, it is critical to translate the organizational language that derives from separate organizational identities and worldviews. Generally, corporations speak in terms of ‘emerging markets,’ and ‘human capital,’ while NGOs operate in the ‘developing world,’ working among ‘program beneficiaries.’ Goals and objectives must be clearly communicated and understood. While NGOs have increasingly adopted business practices in management and businesses concerns are branching out far beyond profit making, they are still different creatures that attract different personalities. A good intermediary would spot potential for miscommunication and make sure both parties spoke the same language. The intermediary would also help with project design, implementation, and monitoring, in particular with stakeholder analysis and impact assessment. As Mary Anderson writes:
“The best partnerships occur when insiders and outsiders work as a team in a coordinated program that includes both perspectives as valuable. Some roles need to overlap. In every partnership, both insiders and outsiders should be jointly engaged in planning, evaluation, analysis, and monitoring because the combination of insider and outsider perspectives provides a necessary reality-check for the biases of both.”
Because corporations and NGOs are accustomed to dealing with different sets of stakeholders, an intermediary would provide a sounding board and external perspective. When problems come up, as they inevitably will during an operational project, the intermediary will be able to help resolve disputes. Such an intermediary would encourage leadership to visit project sites personally, meet the beneficiaries, and truly understand what they are building.
Finding and nurturing a partnership between a NGO and a business is a full time job that must balance a number of needs and objectives. Like all relationships, there are many bridges that must be built and maintained, but the very nature of the parties can make it quite difficult. However, with the right intermediary, these relationships can grow and develop into partnerships full of possibility.
World Economic Forum. (2002). Global corporate citizenship: the leadership challenge for CEOs and boards. Retrieved from http://www.weforum.org/pdf/GCCI/GCC-CEOstatement.pdf.
Such as those designated as “B corporations.” See, http://www.bcorporation.net/.
Newell, P. (2005). Citizenship, accountability and community: the limits of the CSR agenda. International Affairs, 81(3), 541-557.
Zandvliet, L., & Anderson, M. (2009). Getting it Right: Making Corporate-Community Relations Work. Sheffield, UK: Greenleaf Publishing, Ltd, 24.
Fort, F. & Westerman-Behaylo, M. (2008). Moral maturity, peace, and the partnership dimension. In Williams, O. (Ed.), Peace Through Commerce (55-74). Notre Dame, IN: University of Notre Dame Press, 57.
Anderson, M. & Olson, L. (2003). Confronting War: Critical Lessons for Peace Practitioners. Cambridge, MA: The Collaborative for Development Action, Inc., 42.
Use the following to cite this article:
Benjamin Bernard. "NGO/Corporate Partnerships and the Need for a Bridgebuilder." Beyond Intractability. Eds. Heidi Burgess and Guy Burgess. Conflict Information Consortium, University of Colorado, Boulder. Posted: May 1, 2001 <http://www.beyondintractability.org/essay/ngo-corporate-partnerships>.