Difference between revisions of "NGO-Business Partnerships"
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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==== | ====Business==== | ||
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* 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== | ||
| − | + | Global Corporate Citizenship Initiative: | |
| − | Global Corporate Citizenship Initiative: | ||
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* Build trust and understanding through openness, transparency and good communication. | * Build trust and understanding through openness, transparency and good communication. | ||
* Establish clear roles, responsibilities and ground rules. | * Establish clear roles, responsibilities and ground rules. | ||
Revision as of 11:44, 12 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.
