Difference between revisions of "NGO-Business Partnerships"
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| − | ''The foundation for this article was a paper on "Networking with Business" prepared by Frances C. Gretes for the NGO Handbook'' | + | ''The foundation for this article was a paper on "Networking with Business" prepared by Frances C. Gretes for the NGO Handbook.'' |
| − | A partnership is defined as a relationship between individuals or groups that is characterized by mutual cooperation and responsibility and established for the achievement of a specified goal. Within the international development community, the term “partnership” often comprises the host country counterpart organizations, for-profit entities and program beneficiaries. The UN defines the private (for-profit) sector as having four components: | + | A [[NGO Networking|partnership]] is defined as a relationship between individuals or groups that is characterized by mutual cooperation and [[The Primary Responsibilities of an NGO Executive Director|responsibility]] and established for the achievement of a specified goal. Within the international development community, the term “partnership” often comprises the host country's counterpart organizations, for-profit entities, and program beneficiaries. The UN defines the private (for-profit) sector as having four components: |
| + | *Multi-national corporations (MNCs) | ||
| + | *Small and medium enterprises (SMEs) | ||
| + | *National large-scale enterprises (LSEs) | ||
| + | *Micro-enterprises. | ||
| + | Since 2000, MNCs have increasingly played a more active role as partners providing financial resources, expertise and other forms of support. (Cooley, 1) | ||
| − | Models for successful business-NGO partnerships have been slow to develop. As the number of NGOs grows | + | Models for successful business-NGO partnerships have been slow to develop. As the [[Numbers of NGOs|number of NGOs]] grows and NGOs face increasing competition, they are moving towards partnering as a means of differentiation. (Davies, 29) Both NGOs and businesses have learned lessons from early partnership experiences and are now developing meaningful relationships that provide mutual benefits. Each side, possessing certain knowledge, skills and infrastructure, is helping the other meet their goals, without sacrificing integrity or profit, and producing results for the common good. |
| − | Jeb Brugmann points out: “As their interests and capabilities converge, these corporations and NGOs are together creating business models that are helping to grow new markets at the bottom of the pyramid and niche segments in mature markets.” (Brugmann, | + | Jeb Brugmann points out: “As their interests and capabilities converge, these corporations and NGOs are together creating business models that are helping to grow new markets at the bottom of the pyramid and niche segments in mature markets.” (Brugmann, 2) |
Rajat Gupta, former McKinsey managing director, said to the UN General Assembly in 2005, “… there is no hope for development without business, and in the long term, there is no hope for business without development.” (Gupta) | Rajat Gupta, former McKinsey managing director, said to the UN General Assembly in 2005, “… there is no hope for development without business, and in the long term, there is no hope for business without development.” (Gupta) | ||
| − | To achieve partnership success, development and business experts agree that the requisites are common ground, effective leadership, and accountability at all levels. They recommend focusing on trust, people and on managing those relationships. Businesses need to have flexibility and work in circles other than those that are customary. NGOs, on the other hand, must understand that businesses work with different start timetables and protocols and that they expect their partners to respect deadlines and commitments. NGOs must also improve accountability to their partners as well as their communities. | + | To achieve partnership success, development and business experts agree that the requisites are common ground, effective leadership, and [[Methods of Enhancing Accountability|accountability]] at all levels. They recommend focusing on trust, people, and on [[Human Resources Best Management Practices|managing]] those relationships. Businesses need to have flexibility and work in circles other than those that are customary. NGOs, on the other hand, must understand that businesses work with different start timetables and protocols and that they expect their partners to respect deadlines and commitments. NGOs must also improve accountability to their partners as well as their communities. |
| − | Below is a presentation of the key issues and recommendations for building successful long-term partnerships. | + | Below is a presentation of the key issues and recommendations for building successful long-term partnerships. <membersonly> |
==Key Issues== | ==Key Issues== | ||
| − | Over the past 20 years, countries have liberalized their economies and opened them to foreign goods competition. The NGO sector also increased. As governments play a lesser regulatory role, NGOs sometimes battle with corporations over social responsibility in certain jurisdictions and have emerged as “de facto regulators” to keep the actions of corporations in check. When they do not behave responsibly, NGOs | + | Over the past 20 years, countries have liberalized their economies and opened them to foreign goods competition. The NGO sector also increased. As governments play a lesser regulatory role, NGOs sometimes battle with corporations over social responsibility in certain jurisdictions and have emerged as “de facto regulators” to keep the actions of corporations in check. When they do not behave responsibly, NGOs can damage the reputations of businesses by publicly exposing them. For example, NGOs launched attacks on Nike for violating [[Human Rights NGOs|human rights]] and on Merck and GlaxoSmithKline for enforcing patents on AIDS medicines (Brugmann). |
| − | The most difficult issue that businesses and NGOs deal with is the conflict between ethics and commerce. If a business | + | The most difficult issue that businesses and NGOs deal with is the conflict between [[Overview of NGO Ethics|ethics]] and commerce. If a business does not make money, it is not going to be interested in partnering and NGOs may jeopardize their legitimacy by helping businesses make money. This trend however, is changing from “principles or profits” to “principles AND profits.” The characteristics that businesses and NGOs share make their differences almost indistinguishable. |
The International NGO Training and Research Centre’s (INTRAC ) Millennium Paper states: | The International NGO Training and Research Centre’s (INTRAC ) Millennium Paper states: | ||
| − | + | <blockquote>“...we have identified... the dramatic change in the nature and form of NGOs. Even the language used to describe NGOs is changing and identities and boundaries are clearly shifting. We see NGOs with no value base, as against commercial enterprises with very strong ethical values; certain non-profit organisations run counter to the traditional spirit of voluntarism; commercial consultancy firms compete with established NGOs to operate programmes in areas formerly considered 'NGO territory', and NGOs are setting up commercial consultancy wings” (INTRAC).</blockquote> | |
==Partnering for Success== | ==Partnering for Success== | ||
| − | The World Business Council for Sustainable Development (WBCSD) in their paper on sustainable livelihoods identifies six global trends that are encouraging NGO-business collaboration | + | The World Business Council for Sustainable Development (WBCSD) in their paper on sustainable livelihoods identifies six global trends that are encouraging NGO-business collaboration: |
| − | + | #Many companies see a need to break out of mature market sectors. | |
| − | + | #Framework conditions in many developing countries are improving. | |
| − | + | #Communications are faster and cheaper, making the world a smaller place. | |
| − | + | #Public expectations of corporations are changing. | |
| − | + | #New and better partners are available. | |
| − | + | #Aid and investment are beginning to reinforce one another. | |
With a win-win model, businesses would try to: | With a win-win model, businesses would try to: | ||
| − | * | + | *Blend financial and social values |
| − | * | + | *Create opportunities for the poor |
| − | * | + | *Engage the poor in a business relationship that relates directly to the companies’ core commercial operations |
| − | * | + | *Integrate the poor in the company’s value chain. |
| − | By studying the “win-win” case studies discussed by organizations such as the WBCSD, NGOs can learn to understand the business point of view and can negotiate more effectively during the process of selecting and developing a partnership | + | By studying the “win-win” case studies discussed by organizations such as the WBCSD, NGOs can learn to understand the business point of view and can negotiate more effectively during the process of selecting and developing a partnership (WBCSD). |
| − | The Global Corporate Citizenship Initiative | + | The Global Corporate Citizenship Initiative (GCCI) proposes several examples of ways to engage in partnerships: |
* Build framework conditions for good governance | * Build framework conditions for good governance | ||
| − | *# Spread industry-wide or global standards for accountability, transparency and responsible business practices. | + | *#Spread industry-wide or global standards for accountability, transparency and responsible business practices. |
*# Help to strengthen public institutions and administrative capacity. | *# Help to strengthen public institutions and administrative capacity. | ||
* Expand economic opportunities | * Expand economic opportunities | ||
*# Ensure that local communities benefit from major development projects. | *# Ensure that local communities benefit from major development projects. | ||
*# Support small and micro-enterprise development. | *# Support small and micro-enterprise development. | ||
| − | *# Invest in youth entrepreneurship and employment. | + | *# Invest in [[Youth NGOs|youth]] entrepreneurship and employment. |
*# Engage in integrated approaches to poverty reduction. | *# Engage in integrated approaches to poverty reduction. | ||
| − | * Invest in physical infrastructure | + | * Invest in physical infrastructure (water, energy and transportation) |
| − | *# Preserve and provide access to clean water | + | *# Preserve and provide access to clean water. |
| − | *# Provide access to clean energy | + | *# Provide access to clean energy. |
*# Leverage logistics and transportation competencies. | *# Leverage logistics and transportation competencies. | ||
| − | * Improve access to and quality of education | + | * Improve access to and quality of [[Educational NGOs|education]] |
| − | *# Build national business coalitions for education | + | *# Build national business coalitions for education. |
| − | *# Mobilize private resources and technology for education | + | *# Mobilize private resources and technology for education. |
| − | *# Prevent child exploitation | + | *# Prevent [[Children's NGOs|child]] exploitation. |
* Provide better healthcare and affordable treatments | * Provide better healthcare and affordable treatments | ||
| − | *# Help to build capacity and infrastructure in public health systems | + | *# Help to build capacity and infrastructure in public health systems. |
| − | *# Support global and national alliances for health | + | *# Support global and national alliances for health. |
* Build partnership skills | * Build partnership skills | ||
*# Invest in training and experiential learning programs. | *# Invest in training and experiential learning programs. | ||
| − | + | ==Potential Reasons for Forming Partnerships== | |
| − | ==Potential | ||
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What the private sector wants from NGOs: | What the private sector wants from NGOs: | ||
* Chance to demonstrate corporate philanthropy (Corporate Social Responsibility) | * Chance to demonstrate corporate philanthropy (Corporate Social Responsibility) | ||
| − | * Enhance reputation (market differentiation) | + | * Enhance reputation ([[NGO Marketing|market]] differentiation) |
* Financial benefits (profit) | * Financial benefits (profit) | ||
* Competitive advantage (healthy community thrives economically) | * Competitive advantage (healthy community thrives economically) | ||
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* Expertise and innovation | * Expertise and innovation | ||
* Distribution networks | * Distribution networks | ||
| − | + | ||
| − | ==Types of NGO- | + | ==Types of NGO-Business Alliances== |
''Independent Sector'' identifies three major categories of NGO-business alliances:. | ''Independent Sector'' identifies three major categories of NGO-business alliances:. | ||
| − | + | #'''Strategic Alliance'''. This kind of relationship goes beyond a donation, grant, or other contracting arrangement. In a [[Strategic Planning|strategic]] alliance, both partners contribute resources necessary to carry out a set of activities that, when accomplished, will achieve the goal. Resources might include people with a relative set of skills, money, materials, and other pertinent tangible or intangible assets. The goal is one in which both organizations believe is important and relative to its organizational mandate. The partners agree to work together to monitor progress, identify problems and success, and make adjustments. | |
| − | + | #'''Issue Specific Engagement'''. This relationship is similar to the strategic alliance with the exception that it is focused on an issue that is having a negative impact on sustainable development. An NGO must be careful not to accept a grant from a corporation to implement a community-based project if that same corporation’s behavior is harming efforts to achieve sustainable development. | |
| − | + | #'''Advocacy and Constructive Dialogue'''. In this relationship, NGOs do not develop a partnership or accept any form of contribution from the corporation. The relationship is solely based on a constructive dialogue between the NGO and the corporation regarding the issues at hand. An example of advocacy and constructive dialogue could be the diamond industry in conflict zones like Sierra Leone, Angola, and the Democratic Republic of Congo. Diamond companies, such as De Beers, are under pressure from human rights organizations to verify that they do not purchase diamonds from [[Peace and Conflict NGOs|conflict]] areas where the revenue can be used to fuel the civil war. Interested NGOs could band together to advocate that diamond companies develop a verification and certification system that demonstrates that the revenues from the purchase of its diamonds are not used to continue the fighting. | |
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| − | + | ==Strengths and Risks/Weaknesses in NGO-Business Partnerships== | |
| − | + | There are many benefits for both businesses and NGOs when forming partnerships. However, it is also important to understand that there are some risks for both parties involved. | |
| − | + | ===Benefits=== | |
| − | + | ====Business==== | |
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| − | ==Benefits== | ||
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| − | Business | ||
* Money | * Money | ||
* Technical knowledge | * Technical knowledge | ||
* Management skills | * Management skills | ||
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* Ability to work in a country with less government interference | * Ability to work in a country with less government interference | ||
* Enhanced reputation and ‘license to operate’ | * Enhanced reputation and ‘license to operate’ | ||
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* Ethical investing that may contribute to increase of share price | * Ethical investing that may contribute to increase of share price | ||
* Access to local knowledge and capabilities | * Access to local knowledge and capabilities | ||
| − | + | ====NGOs==== | |
| − | + | * Local knowledge and expertise | |
| + | * Ability to enhance a business’ reputation | ||
| + | * Moral influence on business by fostering responsible business practices | ||
| + | * Established distribution networks and infrastructure | ||
| + | * Relief to businesses of certain kinds of administrative tasks | ||
* Ability to reach more people | * Ability to reach more people | ||
* Improved credibility and program visibility | * Improved credibility and program visibility | ||
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* Production of safe and affordable products and services | * Production of safe and affordable products and services | ||
* Income generation and investment | * Income generation and investment | ||
| − | * Improved business environment | + | * Improved business [[Environmental NGOs|environment]] |
* Inside knowledge of how a company or industry works helps influence change | * Inside knowledge of how a company or industry works helps influence change | ||
| − | + | ===Risks/Weaknesses=== | |
| + | ====Business==== | ||
| + | * Wasting resources | ||
| + | * Divulging sensitive information which can be misused | ||
| + | * Complex bureaucracies | ||
| + | * Fines and litigation costs if something goes awry | ||
| + | * Possible damage to reputation | ||
| + | * Loss of customers or profits | ||
| + | * Negative press | ||
| + | ====NGOs==== | ||
| + | * Compromising principles | ||
| + | * Administrative costs could be a drain on resources | ||
| + | * Potential loss of credibility among the public or donors | ||
| + | * Lack of funding | ||
| + | * Poor communication | ||
| + | * Lack of management skills | ||
==Recommendations for Establishing a Partnership== | ==Recommendations for Establishing a Partnership== | ||
| + | There are many reccommendations for establishing a partnership that are useful to both businesses and NGOs. | ||
| + | Global Corporate Citizenship Initiative suggests the following: | ||
| + | #Build trust and understanding through openness, transparency and good communication. | ||
| + | #Establish clear roles, responsibilities and ground rules. | ||
| + | #Respect differences in approach, competence, timeframes and objectives of different partners. | ||
| + | #Apply the same professional rigor and discipline focused on achieving goals that would be applied to other business alliances. | ||
| + | #Focus on achieving mutual benefit in a manner that enables the partners to meet their own objectives as well as common goals. | ||
| + | #Understand the needs of local partners and beneficiaries, with a focus on building their own capacity and capability rather than creating dependence. | ||
| − | + | Aspen Institute’s Nonprofit Sector Strategy [[Blogs and Community Groups|Group]] reccommends the following: | |
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| − | Aspen Institute’s Nonprofit Sector Strategy Group: | ||
* Identify specific projects for collaboration | * Identify specific projects for collaboration | ||
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** Agree on joint report process and results | ** Agree on joint report process and results | ||
| − | Roger Cowe lists these key success factors identified by | + | Roger Cowe lists these key success factors identified by Sustainability, a consultancy: |
| − | + | #The company must be serious about changing its behavior and should be able to drive change in its own sector and across the business community generally. | |
| − | + | #The NGO must be able to maintain clear accountability to its own key stakeholders, and must maintain its independence from the business partner. | |
| − | + | #Each partner needs to benefit directly and to understand the other’s benefits. | |
| − | + | #The “rules of engagement” need to be clearly agreed at the outset. | |
| − | + | #Individual participants must be sufficiently senior to have their organization’s mandate and be able to make difficult decisions without constantly having to refer back. | |
| − | + | #The people involved must trust each other. | |
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| − | + | The twelve principles in Robyn Shepherd’s toolkit are: | |
| + | #'''Understanding''': Both partners should demonstrate mutual understanding and a shared commitment. If they cannot achieve between themselves a balanced level of enthusiasm and dedication to the partnership, other partners should be sought. | ||
| + | #'''Representation''': Each organization should carefully choose its representatives when forming the partnership. Even if both organizations are generally committed to the partnership, it could fail if the designated representatives are not adequately motivated. | ||
| + | #'''Power''': Power in the partnership should be balanced. No one party should dominate discussions or decision-making. Dispute resolution procedures should be established early. | ||
| + | #'''Openness''': Partners should hold open, candid discussions about power to further transparency and trust. | ||
| + | #'''Loyalty''': Partnerships are based on a common purpose and shared responsibility toward the goal and toward each other. To achieve mutual accountability, each partner should demonstrate loyalty and consideration. | ||
| + | #'''Joint Action''': Partners should work together harmoniously in the partnership, including when evaluating and reporting on partnership activities. | ||
| + | #'''Ownership''': The organizations should share ownership of the partnership. Any work done belongs to the collective partnership and not to any single party. Both partners should take credit for all outcomes – achievements and failures. | ||
| + | #'''Information''': There should be a balanced flow of [[NGO Information Management|information]] among partners. All reports and documents generated through collaborative work should be shared and open to all partners for review, comment, reference and use. | ||
| + | #'''Communication''': Communications should be fair, open, effective, respectful, and candid. | ||
| + | #'''Respect''': Partners must demonstrate mutual respect and trust in negotiations and decision-making. | ||
| + | #'''Values''': Shared values on development and social action are crucial to the success of the partnership. In order to find common approaches, partners must understand each other’s views of development and the particular work in which they are engaged. | ||
| + | #'''Vision''': Partners should conduct their partnership using shared priorities and organizational visions. They must agree on how to address not only complex issues such as finances, information sharing, program activities, but also basic issues such as meeting schedules and logistics. | ||
| − | === | + | ==Key Questions to Ask== |
| + | These questions are adapted the Asian Development Bank (ADB) Proceedings. | ||
| + | ===Choose the Rights Partner: Seek Mutual Trust and Respect=== | ||
* What is the mandate of the organization/company? | * What is the mandate of the organization/company? | ||
* What is its reputation in the target community? | * What is its reputation in the target community? | ||
* Is the NGOs reputation likely to be damaged through association with this entity? | * Is the NGOs reputation likely to be damaged through association with this entity? | ||
* If this individual or entity has been critical of the NGO’s operations in the past, will a partnership help alleviate such criticisms or will it exacerbate them? | * If this individual or entity has been critical of the NGO’s operations in the past, will a partnership help alleviate such criticisms or will it exacerbate them? | ||
| − | * “If I were working for their organization or in their line of business, would I conduct myself in a similar fashion?” If the answer is yes, then there may be a basis for respect. | + | * “If I were working for their organization or in their line of business, would I conduct myself in a similar fashion?” (If the answer is yes, then there may be a basis for respect.) |
| − | ===Managing the | + | ===Managing the Partnership: Establish Shared Objectives, Clearly Defined Expectations and Systems for Communication=== |
| − | + | Do you agree on the objectives? The issue of misaligned expectations is one of the common causes of failure. Among the issues that should be clarified are: | |
| − | * Roles: Does the private sector partner wish to play an active or passive role in program implementation? Is the NGO an equal partner in all decision-making, or is it playing a supporting role? Roles will vary from case to case and no single approach works in every circumstance. The ADB recommends that NGOs be prepared for a negotiation in which both partners compromise to ensure a win-win situation for all. | + | :* Roles: Does the private sector partner wish to play an active or passive role in program implementation? Is the NGO an equal partner in all decision-making, or is it playing a supporting role? Roles will vary from case to case and no single approach works in every circumstance. The ADB recommends that NGOs be prepared for a negotiation in which both partners compromise to ensure a win-win situation for all. |
| − | * Accountabilities: To ensure a necessary transparent decision-making structure, negotiators must be clear from the outset who will be responsible for what. Which partner, for example, will ensure that funds are properly spent and accounted for? What deadlines and milestones have been agreed to, and are there consequences if they are not met? | + | :* Accountabilities: To ensure a necessary transparent decision-making structure, negotiators must be clear from the outset who will be responsible for what. Which partner, for example, will ensure that funds are properly spent and accounted for? What deadlines and milestones have been agreed to, and are there consequences if they are not met? |
| − | * Policies: Partners should jointly develop operational procedures or policies. It is useful to have clear guidelines on such issues as confidentiality and public relations in advance. | + | :* Policies: Partners should jointly develop operational procedures or policies. It is useful to have clear guidelines on such issues as confidentiality and public relations in advance. |
| − | * Communication: Establish a mechanism on the frequency and manner of communication. The language of NGOs differs from that of the private sector. A pervasive argument or reasonable excuse in one sector may not be seen as legitimate in another. Recognize these differences and try to talk the same talk. This is just as important during the implementation of a project as it is during the exploration or negotiation phase. | + | :* Communication: Establish a mechanism on the frequency and manner of communication. The language of NGOs differs from that of the private sector. A pervasive argument or reasonable excuse in one sector may not be seen as legitimate in another. Recognize these differences and try to talk the same talk. This is just as important during the implementation of a project as it is during the exploration or negotiation phase. |
==Need for International Standards== | ==Need for International Standards== | ||
| − | The limited use of international codes and standards by both | + | The limited use of international codes and standards by both business and NGOs causes considerable concern. According to a survey conducted by the UK-based Forster Company, only 18% of NGOs use any form of standards to assist them in their work, despite the fact that these codes and standards are the only objective benchmarks that are available to check the behavior of business. The most frequently used by respondents was the Ethical Trading Initiative Base Code, followed by the use of Global Reporting Initiative criteria for best practice CSR reporting (Forster, 7). |
Forster proposes five stages during which international standards might add real value to an NGO: | Forster proposes five stages during which international standards might add real value to an NGO: | ||
| − | + | #Identifying or confirming the need for collaboration | |
| − | + | #Identifying the shortlist of potential partners. | |
| − | + | #Selecting the partner for the collaboration. | |
| − | + | #Setting the aims and objectives of an agreed partnership. | |
| − | + | #Monitoring and reporting of collaboration against international standards (Forster,7). | |
| − | (Forster, | ||
==Examples of Successful Alliances== | ==Examples of Successful Alliances== | ||
| − | * BP worked with local groups to develop a fuel-efficient stove for poor consumers in rural India. | + | * BP worked with local groups to develop a fuel-efficient stove for poor consumers in rural [[India NGO Sector|India]]. |
* Coca-Cola transformed libraries into youth learning centers in Indonesia. | * Coca-Cola transformed libraries into youth learning centers in Indonesia. | ||
| − | * Chevron built local business and civil society in Angola and worked with Citibank on microfinance in Vietnam. | + | * Chevron built local business and civil society in Angola and worked with Citibank on microfinance in [[Vietnam NGO Sector|Vietnam]]. |
| − | * Hewlett Packard has helped to provide microfinance in Uganda. | + | * Hewlett Packard has helped to provide microfinance in [[Uganda NGO Sector|Uganda]]. |
* Microsoft has teamed with NGO Pratham to deliver personal computers to Indian villagers. | * Microsoft has teamed with NGO Pratham to deliver personal computers to Indian villagers. | ||
* Starbucks maintains alliances with groups impacted by the coffee business. | * Starbucks maintains alliances with groups impacted by the coffee business. | ||
| − | Examples of multi-member partnerships include | + | Examples of multi-member partnerships include: |
| + | *Nordic Partnership, a consortium of leading Scandinavian companies. | ||
| + | *World Business Council for Sustainable Development. | ||
| − | Pact, a | + | Pact, a [[US Nonprofit Sector, Tax Benefits, WANGO Survey|United States]]-based organization, and the International Business Leaders Forum are among the groups devoted to making partnerships work. |
==References== | ==References== | ||
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*Cowe, Roger. “Business/NGO partnerships—what’s the payback?” Ethical Corporation, April 2004. http://www.globalpolicy.org/ngos/credib/2004/0404partner.htm (accessed April 9, 2007) | *Cowe, Roger. “Business/NGO partnerships—what’s the payback?” Ethical Corporation, April 2004. http://www.globalpolicy.org/ngos/credib/2004/0404partner.htm (accessed April 9, 2007) | ||
| − | *Davies, Robert. A Business guide to development actors. International Business Leaders Forum and World Business Council for Sustainable Development, October 2004. http://www.wbcsd.ch/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTA4NTk | + | *Davies, Robert. A Business guide to development actors. International Business Leaders Forum and World Business Council for Sustainable Development, October 2004. http://www.wbcsd.ch/plugins/DocSearch/details.asp?type=DocDet&ObjectId=MTA4NTk (accessed April 12, 2007) Introduces business community to potential partners in the development community. |
| − | (accessed April 12, 2007) Introduces business community to potential partners in the development community. | ||
*Elstrodt, Heinz-Peter and Anamaria Schindler and Andrea C. Waslander. “Helping nonprofits do business,” The McKinsey Quarterly, December 2004. http://wwwmckinseyquarterly.com/article_print.aspx?L2=33@L3+0&ar=1552 . (accessed April 9, 2007) | *Elstrodt, Heinz-Peter and Anamaria Schindler and Andrea C. Waslander. “Helping nonprofits do business,” The McKinsey Quarterly, December 2004. http://wwwmckinseyquarterly.com/article_print.aspx?L2=33@L3+0&ar=1552 . (accessed April 9, 2007) | ||
Latest revision as of 08:06, 13 August 2008
The foundation for this article was a paper on "Networking with Business" prepared by Frances C. Gretes for the NGO Handbook.
A partnership is defined as a relationship between individuals or groups that is characterized by mutual cooperation and responsibility and established for the achievement of a specified goal. Within the international development community, the term “partnership” often comprises the host country's counterpart organizations, for-profit entities, and program beneficiaries. The UN defines the private (for-profit) sector as having four components:
- Multi-national corporations (MNCs)
- Small and medium enterprises (SMEs)
- National large-scale enterprises (LSEs)
- Micro-enterprises.
Since 2000, MNCs have increasingly played a more active role as partners providing financial resources, expertise and other forms of support. (Cooley, 1)
Models for successful business-NGO partnerships have been slow to develop. As the number of NGOs grows and NGOs face increasing competition, they are moving towards partnering as a means of differentiation. (Davies, 29) Both NGOs and businesses have learned lessons from early partnership experiences and are now developing meaningful relationships that provide mutual benefits. Each side, possessing certain knowledge, skills and infrastructure, is helping the other meet their goals, without sacrificing integrity or profit, and producing results for the common good.
Jeb Brugmann points out: “As their interests and capabilities converge, these corporations and NGOs are together creating business models that are helping to grow new markets at the bottom of the pyramid and niche segments in mature markets.” (Brugmann, 2)
Rajat Gupta, former McKinsey managing director, said to the UN General Assembly in 2005, “… there is no hope for development without business, and in the long term, there is no hope for business without development.” (Gupta)
To achieve partnership success, development and business experts agree that the requisites are common ground, effective leadership, and accountability at all levels. They recommend focusing on trust, people, and on managing those relationships. Businesses need to have flexibility and work in circles other than those that are customary. NGOs, on the other hand, must understand that businesses work with different start timetables and protocols and that they expect their partners to respect deadlines and commitments. NGOs must also improve accountability to their partners as well as their communities.
Below is a presentation of the key issues and recommendations for building successful long-term partnerships.
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