NGO/Corporate Partnerships

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NGO

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.

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