Charities and corporates are becoming more strategic in their approach to partnerships
Charities and corporates don’t always make for natural partners. As in any relationship, when one half of a couple holds the purse strings, the imbalance of power between the two can make for compromised decision-making and tarnished reputations.
But today’s NGOs and corporates are after something a bit more lasting than a one-night stand involving a bit of collection-tin shaking and some cheap co-branding. Instead, they are looking to create meaningful relationships based around mutual benefit and strategic synergies, pooling expertise, resources, and knowledge.
Despite recent issues within the charity sector, the best of these new partnerships are changing both lives and brands for the better. Robert Nuttall, founder of consultancy Fortitude Partners, says that in the last five years, we have seen a seismic shift.
‘I think the trend for companies to give the money and NGOs to give their brand is diminishing,’ he says. ‘It’s more about them working together on the ground, using their skills towards a common goal. The working together tends to be broader. Not all of these partnerships are necessarily comfortable, but there is a common interest.’
Figures show that many charity and company partnerships are still ‘old-style’, with charities relying heavily on the cash they receive from corporate partners in return for a ‘halo effect’ that, in theory, gives the company a better reputation.
The most recent Corporate Partnership Barometer from consultancy C&E Advisory, which asks charities and corporates about their partnership motivations, shows that 93 per cent of all NGOs cited access to funds as a prime reason for partnering.
Manni Amadi, chief executive of C&E Advisory, says: ‘It is unsurprising that this is a primary goal – the Barometer shows that, in many cases, the income from corporate partnerships can be significant. Almost one third of these partnerships have a value in excess of £10 million, according to the survey.
For corporate partners, the value they are gaining from these traditional partnerships is also clear. Corporates are primarily looking to improve their reputation and credibility – whilst NGOs are mainly seeking funding through partnership with each sector.’
There is evidence, though, that both charities and companies are thinking more deeply about partnerships. The 2018 C&E Barometer found a significant uplift in the number of respondents who felt their relationships had reached a more profound level than simply ‘you scratch my back and I’ll scratch yours’.
Three in four companies said that their organisations engaged in ‘deeper, problem-solving partnerships designed to address core, mission-relevant or purpose-led issues’, compared to just 36 per cent in 2016, when the question was first posed. Amadi says that companies and NGOs are looking to do more with their partnerships, describing the picture as ‘highly encouraging’.
‘Leading companies and NGOs are clearly prioritising and investing greater resources of funds, time and know-how into deeper, problem-solving partnerships with each other in which they draw on their assets,’ he says.
Partnerships are best when values align and work overlaps
Jon Chandler, chief executive at Quiller, agrees. ‘Companies and NGOs are learning that by working together they can effect real change. The old way, which was to throw money at a charity and hope people would be impressed, has receded.’
These new partnerships can look very different, with partners sharing expertise to work towards common goals. The work that they do could end up benefiting both sides of the partnership, rather than expertise flowing in a one-way fashion from corporate to charity.
One example of this is insurance giant Aviva’s partnership with The Red Cross, which the insurance giant’s head of corporate responsibility David Schofield describes as ‘vital’.
‘Partnerships are best when values align and work overlaps,’ he says. ‘We are dealing with customers when the worst happens, in their own crises, and that is exactly what Red Cross does, so we are fully aligned.’ The expertise from the Red Cross has helped Aviva to improve its customer care, as staff have received training from charity on how to deal with people experiencing a crisis.
‘When we are dealing with our customers, they are often going through personal disasters – flood, fire or theft,’ he says. At the same time, Aviva’s technology has helped the Red Cross to launch a disaster recovery app and to map little known areas of Africa, using hours of volunteering from Aviva staff.
Development charity WaterAid’s partnership with various water companies is similarly symbiotic. WaterAid’s information is put in with water bills, which raises public awareness, but at the same time, engineers from UK water companies are gaining vital insight into engineering solutions from training with WaterAid partners in the developing world.
Kate Holme, team lead for corporate partnerships at Water Aid, cites the experience of Yorkshire Water representatives, who have been out in Ethiopia. ‘One of the most interesting and relevant learning opportunities was about the impact of climate change and building resilient and sustainable water and sanitation supplies,’ she says. ‘Climate change, seasonal and freak weather occurrences, and the need to ensure resilience to water supply has long been important for Ethiopian utilities but the need is also increasing for the UK. There’s going to be increased focus on this in the next phase of the partnership.’
Setting up these strategic new partnerships requires a little more thought. Companies and charities must pick partners who share common goals, and consider what issues they might solve together, rather than simply hoping for a feel-good, fuzzy haze, or a solid lump of cash.
Nuttall says that this can mean companies and charities choose more uncomfortable bedfellows, who can challenge them, or even seem at odds with them in other areas of their work. He cites the example of Greenpeace and McDonald’s as one partnership that exemplifies this model. Even the environmental organisation, whose activists are famous for chaining themselves to things as a protest, called the partnership which began in 2006 ‘unexpected and surprising’.
The involvement began with a three-year investigation into the soy plantation supply chain in the Amazon. The charity discovered that the demand for soya was accelerating rainforest destruction with an area the size of a football field being cut down every ten seconds.
Sending two-metre-high clucking chickens into your prospective partner’s food outlets as a protest is an unusual step if you’re trying to woo a corporate, but this was Greenpeace’s next step.
‘By the time the last of the chickens had been unchained by police, Ronald McDonald had come to the table,’ explains a spokesman from Greenpeace. ‘The company very quickly agreed to get Amazon soya out of its chicken feed. But more than that, it formed an alliance with other UK retailers – including ASDA, Waitrose, and Marks & Spencer – to put pressure on agribusiness interests operating in Brazil, including Cargill, to stop destroying the rainforest.’
This led to the Amazon Soy Moratorium, the first major voluntary zero-deforestation agreement in the region, in which 90 per cent of companies in the Brazilian soy market agreed not to purchase soy grown on deforested Amazon land. But even before the moratorium had been signed, the impact had already been felt: the annual rate of Amazon deforestation had virtually halved in the prior two years.
When business is ready to seriously tackle a problem, we are ready to join forces
Describing the charity’s approach to corporate partnerships as ‘pragmatic’, the Greenpeace spokesman adds: ‘We’re always trying to find solutions, and sometimes that means working in alliance with corporations or governments that we have criticised in the past. When business is ready to seriously tackle a problem, we are ready to join forces.’
Quiller’s Chandler cites the relationship between PVH, owner of fashion brand Tommy Hilfiger, and the WWF as similarly pragmatic. The two have worked together to analyse water risk throughout its global supply chain. The company has organised training with WWF for its suppliers. ‘These partnerships work because the partners share clear goals,’ explains Chandler. ‘They are unlikely to agree on everything else, but they are getting together to solve the same problem.’
Greenpeace’s partnership with McDonald’s attracted only muted criticism, perhaps because the charity accepts no money from the fast-food chain: they have just joined together on a shared cause. For those charities more dependent on corporate funding, it can be difficult to disentangle the money they receive from the activities of the donor company. The Institute of Fundraising provides a guide for charities in how to work with charities, and recommends extensive due diligence. It advises all charities to consider ‘the public perception of the company and its brand’, adding: ‘Both the company’s and the charity’s brands should be regarded as valuable assets to protect. With this in mind, will the association enhance or damage the charity’s brand? Both charity and company should be clear about the benefits they expect to gain from the relationship.’
It might seem counterintuitive, but the Institute of Fundraising warns that the danger can be especially great if the company and charity share a lot of common ground, as tends to be the case in more strategic partnerships. ‘Good partnerships often result from common interests and agendas. It can be a fine line between common interest and conflict of interest,’ it warns.
Charities must beware conflicts of interest, especially if a supporter provides a product or service that helps achieve the mission of a charity. Such an example might be a pharmaceutical company supplying, in a commercial arrangement, anti-cancer drugs to a hospice and supporting that hospice ‘philanthropically’ at the same time.
Areas that should be thrashed out before the partnership even begins include the use of the brand and the charity’s name and logo, as well as clarity over who owns what in the partnership, including copyright, events, services, products, brands and logos.
Both parties should agree on how the relationship is going to be presented to the outside world and what is going to be said about the company and the charity, as well as the duration and clear terms of the relationship. Recent events within certain charities, including the Oxfam sexual misconduct scandal in Haiti that caused the government to withdraw the charity’s right to operate in the country, have made it clear to corporates that reputational risk from these partnerships doesn’t just go one way.
For many companies, doing good is no longer limited to the CSR team
‘There are conversations on both sides of the fence about how individual partnerships will continue but I don’t think there is a shift of perspective when it comes to NGOs as a whole,’ says Nuttall.
Chandler adds that both parties should try to see this as an opportunity, and that charities might be able to call on their corporate partners for help with strengthening some of their policies.
‘Of course, in some cases trust has broken down and it is time to rebuild it,’ he admits. If deeper and more strategic corporate partnerships can help charities to strengthen their safeguarding, while charities can help corporates improve their supply chains, the partnership becomes less of a philanthropic exercise and more of a peer-to-peer exchange.
Most charities and corporates agree that these partnerships will increase in importance, with 91 per cent of respondents to the C&E Barometer believing that they would become ‘more important’ or ‘much more important’ over the next three years.
Meanwhile a recent report from New Philanthropy Capital on how to build more impactful charity and corporate relationships talks about a future ‘transformation’ of partnerships, with traditional boundaries between the two sectors breaking down. ‘For many companies, doing good is no longer limited to the CSR team. And for a long time now, charities have been acting more like businesses. As the world changes both sectors need to work better together,’ says report author Angela Kail.