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Articles

NGO - Corporate Partnerships?

Where is it headed?

- Shankar Venkateswaran

A catchphrase that is relatively new but used very extensively in development and government circles is "public-private partnerships". Though a rather broad term, like all catchphrases, it means different things to different people. Most governments and global institutions like the World Bank and the UN system have a very restrictive use of the term public, government and private industry!

Where do NGOs fit into this? Of course, the term NGO itself is very broad but what we refer to as development NGOs are public institutions in that they perform a public function and are meant to act in the public domain. On the other hand, they are private in that they are governed by private individuals acting in their individual capacities. So, may be because of this confusion, as well as their relatively small size, most grass-root development NGOs do not really figure in public-private cocoon and deals with partnerships between these two sectors in ways that benefits the larger public, particularly those who are disadvantaged or marginalized or simply poor. It tries to explore where these partnerships are and what the future holds for them.

Emerging challenges for NGOs

I see NGOs facing a very complex set of challenges in the future, which can play a significiant role in defining the way NGO-corporate partnerships will move in the future. Some of these challenges are already upon NGOs and they are dealing with them, while others are still impacting only a few.

Challenge 1 : Greater expectations from NGOs

Public surveys suggest that the one sector that is most trusted to do good is the NGO sector. A survey carried out in 2001, asked who Indians would trust to work in the best interests of society indicated that media led with 81% and NGOs with 80%! Lower end of the heap companies (67%) and Indian Government (63%)! Also, as the state withdraws and the process of privatization deepens, NGOs have a greater responsibility to serve the interests of the poor.

What are implications of this? If NGOs have to fulfill these expectations (and I would argue that they have no choice), that they have to become more efficient and credible and well resourced.

Challenge 2 : Changing role of NGOs

In the past, many NGOs used to deliver essential services to the poor like health, education and so on. They did this because they saw the huge gaps between the needs and the availability of services. While these gaps still exist and the need for these services has, if anything increased, there is a greater realization that many of these services should go to the poor by right and unless these rights are restored the gap between the needs and availability cannot be bridge. Thus, NGOs need to go beyond delivering services to link up micro-action with larger macro forces and therefore, influence larger changes as also enable communities to regain power and fight for their rights.

Thus, apart from becoming efficient implementers, NGOs also need to become forceful and evidence-based advocates for change. This required a new set of capacities to be built.

Challenge 3 : Deepening of markets

Whether we like it or not, markets are here to stay. But at the end of the day markets are only a mechanism to distribute wealth and while they tend to favour the powerful, they also have the potential to benefit the poor in a more sustainable way. NGOs have no choice but to recognize this reality, understand markets and find ways to use to benefit the poor.

Thus, the challenge before NGOs is to become more "business-like" and serve the poor without compromising on their core values.

Challenge 4 : Corporations ruling the world?

If markets are around, can corporations be far behind? By all accounts, never in human history have corporations been biger and more powerful. David Korten in his monumental book talked about a world when corporations rule the world. Whether they already have penetrated all aspects of human livelihood and have a huge role in influencing public policies that affect the poor.

NGOs can no longer stand and only protest this increasing power of corporations. They also need to find ways to engage with corporations so as to minimize the harm and maximize the good to society. This is eminently possible and is indeed the central purpose of a Corporate Social Responsibility (CSR) agenda.

Challenge 5 : Partnership the way forward

In a complex world growing more complex and interconnected by the minute, no one organization or sector can possibly have all the answers and this has been recognized by all sectors. Without going into defining what partnersip means (again, this is a term that means different things to different people) what is important to understand that partnerships must be mutually beneficial to sustain and often starts with shared activities, even if the goals and values are not necessarily in congruence.

Most partnership models are with the sector where conflicts are minimal. But when it comes to solving human problems, cross sector partnerships are inevitable. Thus, NGOs must learn to build these larger alliances between and across sectors while ensuring that the term "public-private partnership" is seen and understood from a larger perspective.

Opportunities for NGOs to build Corporate Partnerships

I believe that one way for NGOs to meet these emerging challenges described above is to systematically build partnerships with companies. And the time has perhaps never been better for this as can be seen from paragraphs that follows:

Opportunity 1 : Companies realize the need to be good

Through the 1990s, CSR was little more than a buzzword but clearly no longer! From it being a good thing to do if you can, companies globally are realizing that long term survival depends on being a good corporate citizen and be seen as one. A global survey done a few years ago by Price Waterhouse Coopers indicated that 68% of just CEOs of companies felt that CSR was either "somewhat" or "strongly" vital to profitability. And many companies in India are learning how to become socially responsible!

So if in the past NGOs had a hard time getting to talk to a company, the future is rather bright. While companies may not exactly queue up outside NGO doors, company doors are likely to open more readily when NGOs go knocking. And this sets up huge possibilities for NGOs to face up to the challenges described earlier.

Opportunity 2 : Companies concerned about reputation

As was discussed earlier, just as NGO reputation is on the ascendancy, companies are seen with suspicion. Increased security to stave off public protests at the Dovos every year is merely a symptom of how companies are seen, even if one were to discount the presence of less sincere "trouble-makers" in these places.

So, how do companies enhance their reputations? The Price Waterhouse Coopers survey referred to earlier indicated that CEOs count stakeholder engagement, environmental performance and supporting community projects amongest top 5 activities to build stakeholder reputation. These are all areas that lie within the core competence of NGOs and hence provide a great opportunity for NGOs to build partnerships with companies.

Opportunity 3 : Companies are rich!

A key requirement for NGOs to be able to meet the emerging challenges described earlier is financial resources. And the one sector that is getting increasingly wealthy is the corporate world!

This obviously presents a huge opportunity for NGOs to work with companies.

Opportunity 4 : Companies have multiple resources

"Money can't buy me love" goes the famous Beatles song, but it is not just that money cannot buy! Many of the resources that NGOs need to face this complex world, like skills, people, technology, market access etc. do not get lured to the sector with the promise of money. Imaginative ways need to be devised to get these resources to work for NGOs and hence for the poor.

The corporate sector is perhaps the one place that attracts the widest range of resources. Also, if NGOs do not understand markets even if they need to, no one understands them better than companies. Thus, NGO-Company partnerships can be built around a whole range of compatible needs and resources without a single cheque (which companies are least comfortable writing) being written!

Why should NGOs build corporate partnerships?

Clearly, many of the emerging challenges for NGOs can be overcome by building sustainable partnerships with companies and the opportunities to build these partnerships have never ever been better. But it might be useful to outline some of the benefits to NGOs and their work were they to go out their way to build such partnerships.

Influencing company behaviour

Everyone is talking about CSR these days, but each one looks at this from a different prism. In India, many surveys indicate that companies see CSR as a combination of following the law and doing community development. While clearly these two activities are a part of being a socially responsible company, can they be considered as the sum total of What CSR is all about?

To find answers to this question, it is important to understand that companies have great potential to do both good and harm to the poor. It can do good by producing useful and safe products, by supporting community development activities and providing employment, to name a few. It can harm by producing dangerous products, using a production process that damages the environment, disciplining people without adequate compensation or providing an unhealthy and unsafe workplace.

As an organization that is concerned about poor, NGOs must build partnerships with companies to ensure that the poor become a key constituent of a company's CSR vision. Through this engagement, it must convey to companies that CSR is about :-

Not just what to do with profits once they are made but, importantly, how they are made in the first place!

Impact of all stakeholders, employee, shareholders, suppliers, communities, the environment, customers, shareholders, government especially on the most marginalized amongst them.

Exceeding legal requirements. Following the law is necessary to stay in business otherwise the business is illegal but if the company wants to be called socially responsible, it must go beyond the law.

Learning from companies

To survive in the market place, companies have no choice but to be efficient and NGOs (which do not have similar drivers) can learn this through partnerships. Companies live in the market place and since this is not the world that most NGOs inhabit, NGOs can learn this from the masters.

Thus, there is no doubt that NGOs can learn a lot from companies and what better way to do this than through partnerships?

Selling to companies

The new world is an outsourcing world. Companies outsource whatever can be more efficiently and cost-effectively be done by someone elso. The apparel and footware industry is perhaps the best example of this and while this has been controversial, some good has also emerged from this process.

NGOs and producer groups can also become a part of this outsourced world and the benefits are several. For one, companies will only source from suppliers who can deliver quality and on time and clearly, producer groups need to be able to do this to be sustainable. For another, since the greatest challenge for NGOs and producer.