Mission and purpose drive recent growth in strategic corporate-NGO partnering
With their focus on blending commercial and social value, inclusive businesses have long understood the benefit of partnerships to their business models, and such partnerships often involve other businesses, large corporations, as well as NGOs. But what is happening in the current corporate-NGO partnering landscape and what is the direction of travel?
Eight years ago, the C&E Corporate-NGO Partnerships Barometer was launched as an annual study to assess the motivations, drivers, barriers, enablers, role models, trends and forecasts for Corporate-NGO partnering. Created with input from nearly 130 leading businesses and NGOs, the recently released 2017 edition highlights some notable findings.
- For corporates, reputation and credibility (cited by 92% of companies), and for NGOs access to funds (with a 93% NGO score) remain the primary reasons for partnering with each other. However, things are changing for NGOs
- NGOs are increasingly motivated by the need to achieve greater innovation through their partnerships (up a striking 22% year on year).
- NGOs are also increasingly interested in the effectiveness and efficiencies (up 14% and 15% respectively year on year) and possibilities for human resource development (up 13% year on year) to be gained through partnering with companies
Partnering practice and effectiveness
Here, the 2017 Barometer report found:
- A notable increase in the scale of resources invested in or secured from partnerships
- Strategic partnering is on the rise across corporates and NGOs but there are clearly divergent approaches to portfolio management across the two sectors: Over three quarters (79%) of corporates categorise their partnerships with NGOs as "strategic", compared to an equivalent figure of just 32% partnerships in NGOs partnering portfolios that are deemed to be strategic in nature.
- Perhaps the most encouraging finding in the 2017 Barometer report is the discovery that the emphasis on deeper, problem-solving partnerships between corporates and NGOs has accelerated as purpose and mission increasingly take centre-stage in partnerships. 42% of respondents categorise their organisations as engaging in "deeper, problem-solving partnerships designed to address core, mission-relevant or purpose-led issues in ways that create value for society, for ourselves and for our partners." A significant 18% uplift on the 2016 figure (24%).
What value do partners bring to each other?
The report found that aside from reputational and financial gains, strategic partnerships are creating strong value as corporates and NGOs leverage each other's assets, revenue models, expertise, organisational capacity and competencies to scale and sustain social, environmental and commercial solutions for targeted constituencies.
Companies (97%) and NGOs (85%) state that partnerships across both sectors help to improve business understanding of social and environmental issues. Additionally, 63% of corporate and NGO respondents (year on year increases of 4% and 12% respectively) state that partnerships have helped change business practices for the better. So, from working with companies to eliminate single-use plastics in their operations, to driving inclusive, pro-poor practices across their value-chains, cross-sector partnerships appear to be moving the dial for NGOs, for businesses, and for society.
Likely future developments
Looking to the next 3 years, the 2017 Barometer found that:
- Corporate-NGO partnerships are anticipated to become even more important (90% of respondents)
- Over three-quarters (77%) of corporates and NGOs expect that their investments in cross-sector partnerships will increase in the medium term
- Opportunities for leveraging each party's assets, external pressure on companies, and evidence of partnership success are key drivers for the likely continuing importance of - and investment in - cross-sector partnering. The SDGs were deemed to be an important supporting factor in encouraging cross-sector partnering
Final thoughts and challenges
The 2017 Barometer clearly illustrates that strategic partnerships between businesses and NGOs are increasing in scale, sophistication and potential as their true value becomes more apparent. That more organisations are engaging in deeper, problem-solving partnerships designed to address core, mission-relevant or purpose-led issues in ways that create value for society, is clearly cause for celebration. However, challenges remain, particularly for NGOs.
- Reputation (corporates) and cash (NGOs) are still too dominant as motives for partnering. Too much emphasis on these factors risks diluting the true value of cross-sector partnering
- Some NGOs are rapidly evolving their approach to partnering, so that they place mission-delivery at the heart of partnering and make explicit the intangible, but often significant benefits of partnering. A leading humanitarian NGO has created a clear hierarchy of benefits for partnering with the corporate sector, flowing from 1) humanitarian value 2) organisational improvement 3) reputation & influence, and then 4) financial value.
- Fully leveraging the potential of partnerships will require leaders in NGOs to not only re-define and re-configure the definition of value, but also to drive extensive changes (mind-set and cultural, as well as operational and structural) within their organisations, so that an enabling environment exists within their organisations
Increasingly, innovation blossoms where the sectors converge. At these intersections, the exchanges of ideas and values, shifts in roles and relationships, and integration of private capital with public good generate new and better approaches to creating more sustainable social, environmental and shareholder value. So wrote Prof Rosabeth Moss Kanter in the Stanford Social Innovation Review several years ago.
As the private sector becomes more important actors in the development and social business eco-system, courageous leadership is required, if the potential of cross-sector collaboration encapsulated by Rosabeth Moss Kanter is to be realised.
This blog is a part of the October 2017 series on NGOs in inclusive business, in partnership with endeva.
Read the full series for insights on what kind of roles NGOs have carved out for themselves, either as partners of companies, as intermediaries, investors, or even as entrepreneurs and their lessons learnt in doing so.