Reaping the rewards of NGO partnerships

How you can build and maintain profitable relationships with NGOs

Reaping the rewards of NGO partnerships

Increasingly businesses around the world are working in cooperation with NGOs (non-governmental organisations) to build sustainable operating models that profit their shareholders, the environment and the communities in which they operate. 

However, the case for NGO partnerships within the boardroom is not universally accepted or welcomed.  Many business people remain sceptical of the opportunities and benefits of NGO partnerships.

The benefits of positive engagement

Successful NGO partnerships offer a range of potential benefits to business.

For example, almost all business respondents (96%) in a 2015 survey by C&E Corporate-NGO partnership1 barometer listed ‘reputation’ as a key driver of partnerships. Conversely, most NGOs (98%) listed ‘access to funds’ as a motivator for their relationships with business.

However, critics who point to the superficial reputational benefits perceived as ‘green washing’ for businesses have misunderstood the genuine and growing value that can be created for both partners and wider society from these partnerships.

Businesses will often report heightened levels of employee engagement and stronger stakeholder relationships as a result of effective NGO partnerships. This goodwill can contribute to core business performance as a result of greater staff motivation, improved ‘licence to operate’ from regulators, listing on sustainable stock market indices, and positive brand differentiation versus your competitors.

However, in a European context characterised by public scepticism towards the motivations of business (only 53% of the general population trust business according to the 2015 Edelman Trust barometer survey), decision-makers should be aware that these benefits can only really be achieved as a result of meaningful and lasting commitments. NGOs value corporate partners because of the increased resources and impact they bring to a sustainable development challenges. Partnerships need to be win-win.

On a deeper level, positive NGO collaborations can provide businesses with a trusted sounding-board and genuine expertise on the sustainability challenges of their business model (47% of business respondents cited sighted ‘access to knowledge’, while 92% agreed that key NGO partnerships had improved their understanding of sustainability and environmental issues); or the markets in which they operate (27% cited access to new markets). In so doing business can benefit from a greater insight into the real future needs of society and use not-only their current influence and resources to address them, but consider longer term product or service innovations that could influence development (59% of business respondent cited ‘innovation’ as a key benefit of NGO partnerships).

However, the specific benefits that businesses and NGOs can gain from partnerships vary with each engagement and will often defined by the scope of their engagement.

Types of NGO partnership

Early corporate-NGO partnerships were predominantly based on a sponsorship model, through which businesses would enable an NGO to implement or deliver their projects through donations, in return for branding rights.

Epson Europe was active an active NGO partner during this period, supporting numerous projects at national and regional level. Perhaps most prominent amongst there were Epson Gardunha, a reforestation project in Portugal, following severe forest fires, and The Wild Wonders of Europe, a fantastic photography project and touring exhibition highlighting the need to conserve the often forgotten natural beauty and species diversity in Europe.

Increasingly however, models for corporate-NGO partnerships are proliferating. The Cross Sector partnerships initiative (itself a collaboration between World Vision, Accenture and the Partnership Initiative) identified up to 20 different models for collaboration classified under the following types: sponsorship, marketing, advocacy, brokering, capacity-building and business.

Today, there is a trend away from philanthropic investment or sponsorship towards deeper partnerships relating to areas that core business activities and commercial opportunities connect with sustainability and development goals. The C&E Corporate-NGO partnership barometer found that 71% of business respondents agreed that ‘harnessing company competencies and non-cash assets made much more of an impact than financial support to NGOs.

The old paradigm in which NGOs do the service delivery with funding from private sector donors is changing, with traditional roles blurring. In part this stems from a greater recognition of the role of trade in development – and the need for companies to adapt to lower income customers as globalisation opens up less developed markets.

For example, Epson’s Ink Tanks System (ITS) printers were originally designed, with low-cost, high-yield ink cartridges and a totally new business model, to meet the specific needs of customers in developing markets. However, a product innovation inspired by the desire to provide businesses with access to affordable high quality printing in emerging markets, has now also opened up a differentiated market offering for Epson in more mature markets globally.

How to build productive partnerships

It is important to choose the right partner and establish clear protocols to maximise the benefits of the project. Like any business initiative, poorly matched or framed partnerships have the potential to deliver negative outcomes including reputational damage and loss of credibility.

For businesses and NGOs to achieve the most from partnerships, they need to work together to integrate their efforts under the banner of one unified project team. This can be challenging because of the different cultures, organisational missions and reporting lines, but it is an essential element of driving success for all parties, as-well-as society at large.

Essential project management disciplines and guidelines continue to apply and provide as much benefit in cross sector partnerships, as in any other example. It is essential to establish a collective commitment to a shared mission, vision and operating values within the project team. Once agreed, a clearly defined joint structure for decision-making and delivery needs to be established, alongside transparent processes for dealing with conflicts or disagreements.

Putting these structures in place will help to build a cohesive and integrated project team that is focussed on delivering substantive results.

Assessing project impact

Impact assessments are critically important tools for corporate-NGO partnerships, but the metrics used can be hard to define.

The London benchmarking group2 defines impact in three areas:

  • Input (the value of the resources in),
  • Outcome (the number of people reached)
  • Impact (the longer term change)

Clear and transparent reporting not only helps the project team to identify performance gaps and refine project parameters, but to maintain goodwill towards the project. For both potentially sceptical corporate stakeholders and NGO members, being reassured of the collective benefits of these partnerships can help maintain and further deepen commitment to the partnerships and their goals for everyone’s benefit.

Perhaps most revealingly, the CE Corporate-NGO barometer survey found that 57% of responding businesses and 86% of responding NGOs expected to either increase, or significantly increase their commitment to corporate-NGO partnership in the period between 2015 – 2018; demonstrating that the benefits of these partnership are becoming increasingly clear.