Relationship goals: What does it take to make a donor and business relationship work?

The Girls’ Education Challenge (GEC) was launched by the UK Department for International Development in 2012 to help a million of the world’s poorest girls improve their lives through education. As the largest global fund for girls’ education, this programme has been ground-breaking in a number of ways. Not least, in its engagement with the private sector.

The original GEC funding (£300 million) was disbursed under three ‘windows’. Step Change funding was provided to scale up successful interventions that were already having a positive impact.  Innovation funding was to support the application of new interventions, such as technological innovations and the adaptation of proven solutions for new geographies, communities or age groups

Finally, Strategic Partnerships were formed – with Discovery Communications, The Coca Cola Company, Avanti Communication and Ericsson – as a way for DFID to improve education for marginalised girls across the developing world by leveraging private sector resources and expertise. The perceived benefits of this association included:   

• Skin in the game– companies can share the financial risk with traditional donors
• New business models and approaches to sustainability– companies are driven to try new ways of generating income and revenue streams, which can reduce dependence on governments for sustainability
• Potential for transformational impact– because of their focus on scale and the wider economic ecosystem, company-led initiatives can often result in transformational changes to infrastructure, energy availability and the labour market
• New approaches to success and measurement– companies have a broader understanding of value (beyond development impact), often driven by their internal business cases
• Willingness to invest upfront and to take a long-term view– companies can provide substantial amounts of capital and infrastructure investment upfront, which NGOs may be unable to do
• Focus on innovation, technology and media – companies, more than other entities, recognise the need to ‘innovate or die’. Their specific expertise and assets in technology, media and innovation support the testing of new ideas with the potential to ‘leapfrog’ or fast-track specific development solutions
• Scale– companies are naturally interested in supporting large-scale initiatives that cover a wide range of communities.

Strategic Partnerships – a new model

The GEC Strategic Partnerships represent a model for DFID’s engagement with the private sector that is largely unprecedented, testing new approaches for delivering barriers to girls’ education, with measurable impacts. Although all Lead Partners were required to be private sector organisations, broader coalitions with other non-state organisations (such as social enterprises, civil society organisations and local businesses) were encouraged.

There were a number of criteria that all Strategic Partnerships were expected to fulfil. All were required to provide one-to-one match funding and had to be led by a for-profit commercial company. They had to demonstrate the potential to catalyse transformational change.  Companies were also expected to present a robust business case that outlined sustainable benefits beyond the GEC’s lifetime.  

As with any new relationship, the creation and development of these partnerships has been at times rewarding and, at times, challenging. This blog does not offer a blueprint for the perfect partnership but highlights some of the challenges that the GEC Strategic Partnerships have presented over the last four years, the ways in which these have been tackled and reflections on how others might use this learning to inform their programmes and partnerships.  

Establishing a shared vision

The Strategic Partnerships were intended to capitalise on situations where development and commercial objectives were aligned. Nevertheless, in practice there can sometimes be tensions between the two. For example, focusing on marginalised girls (as distinct from girls in general) can make for a more challenging business case for companies. Expectations on how closely these objectives should be aligned, and recommendations for addressing situations of potential conflict, should be clarified at the outset.  

Early conversations are often necessary to make sure the brief is properly understood and can be used by ‘frontline’ teams to build a business case for action within their own organisations. Transparency about the ‘deal breaker’ principles of any partnership from the beginning are also essential.

The Strategic Partnerships set a high level of ambition for companies, including exacting monitoring and evaluation standards and a limited timeframe. The level of ambition has proved challenging in some cases, but companies have ultimately appreciated the capacity built through this process.

It was more difficult than anticipated to engage the ‘core business’ as opposed to Corporate Social Responsibility (CSR) units of companies. Business cases for engagement with DFID were much broader and more complex than expected. All Lead Partners had a strong business case to participate but many companies took a longer-term view of returns, and saw returns as extending beyond simple profit. It is important to ‘demystify’ the mechanics of the business early on in order to understand the commercial drivers and business case.

Particular focus is needed on using language that the private sector understands and responds to.  Terms such as ‘logframe’ and ‘monitoring and evaluation’ can be foreign to companies, whereas the language of ‘results framework’ or ‘KPIs’ is more likely to resonate with, and engage, the private sector.

Technology has been an area where companies feel that they have a ‘value-add’ and advantage over other delivery partners in international development. Capitalising on the ‘digital dividend’ also often aligns with businesses’ wider strategies for emerging markets. Companies can require support in other technical areas, such as gender and social development. The GEC has experts who worked with the companies to develop capacity in this area.

Working together

Donors and companies need to build early understanding of how each other’s organisation works, including structures, processes and ‘pressure points’. Positive collaboration during selection and design phases can be put under strain by a focus on administrative process in the early stages of contracting and implementation. Typical grant contracts are very different to the commercial contracts that companies are used to dealing with and flexibility is required to establish the right balance for both partners.   

Successful engagement between business and development actors depends on each acknowledging the benefits the other brings to the relationship. In applications and propositions, businesses should be upfront about where they can add value as a business (their unique selling point), rather than trying to fit into a perceived ‘mould’. Similarly, donors and other development partners will need to adapt financing and cooperation mechanisms to recognise the areas where companies can add new and significant value, whilst helping to fill other ‘gaps’. By achieving this alignment, commercial objectives can be considered development objectives. As with any relationship, it’s all about getting the fundamentals right. Trust, open communication, dealing with conflict, and working towards the same shared goals and values are essential.

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For further information on the Girls’ Education Challenge, visit: https://www.gov.uk/guidance/girls-education-challenge or contact girlseducationchallenge@uk.pwc.com.

This blog is part of the January 2017 series on how, and why, donors and businesses work together for development impact. For more candid opinions on what works, and what doesn't, read the full series on demystifying donor-business collaborations.