How international NGOs choose corporate partners

Two women in Rajasthan, India, hold up oral rehydration salts, which PSI distributes in India and around the world to reduce child deaths from diarrhea. International NGOs are now using a more robust set of criteria, due diligence and processes in choosing which private sector companies to partner with. Photo by: Gurmeet Sapal / PSI

The days of development organizations decrying collaboration with the private sector appear to be in the rearview mirror.

For some international nongovernmental organizations, private sector partnerships are a relatively new practice developed in the past five or 10 years, while others have engaged for decades. For those with a history of working with corporations, the nature of their relationships has been evolving: traditional corporate social responsibility or financial engagements are giving way to more sophisticated, longer-term partnerships.

And as partnerships become more robust, so too do the criteria, due diligence and processes INGOs use to evaluate potential partners and manage those relationships.

“We’re looking for companies that will push the envelope and pilot new business models,” said Erinch Sahan, a private sector policy adviser at Oxfam. “[We’re] looking for companies that can do something transformative beyond that partnership.”

It’s no longer about encouraging one company to make a single change in its supply chain, but about how that company can influence others to create broader, more transformational change, he said.

Big picture thinking is part of the new landscape, but the vast possibilities mean INGOs must be strict in choosing which corporations can help make that change and have the greatest impact.

The approach

Mission alignment is a critical piece of the puzzle as INGOs consider their potential collaborators.

“Obviously we look at programmatic and geographic fit, but beyond that we really approach talking to and approaching partnerships with corporations as relational,” said Blakey Emmett, director of corporate engagement at Pact.

Once a partnership seems like a good fit with the potential to complement both sides, it becomes about exploring the desire to work together and the ability to build trust.

“We look at these partnerships as transformational, not transactional,” she said, adding that it is about strategic investment, total stakeholder engagement and exploring synergies.

Mercy Corps approaches and chooses partners based on their ability to help tackle a specific problem the organization seeks to address, according to Graham Craft, the INGO’s director of corporate and foundation partnerships.

In many cases, the right mix of partners will include a corporate partner. Given Mercy Corps’ work in fragile states, that partner is often an extractives company with business interests, a long-term stake in the success of the community and resources to help address critical challenges, Craft said.

“Basically, we want to leave the door open to opportunities to solve problems,” he said. “There may be companies we work with in one place but not in another. We take it on a case-by-case, problem-by-problem basis.”

The basic litmus test is whether the community where the partnership would take place will be better off as a result, even if Mercy Corps doesn’t like the company or agree with some of its practices globally or elsewhere, Craft said.

“It’s changing the mindset from ‘why should I?’ to ‘why wouldn’t I?’ work with a company,” he said.

At PATH, the approach to partnerships has evolved since the organization began working with the private sector about 40 years ago — when it realized that it was critical to addressing the need for more effective contraceptives in China.

“It’s really evolving from a sort of organic approach into something that’s much more strategic,” said Elaine Gibbons, PATH’s executive director of global corporate engagement. “We do look at actively reaching out to companies.”

When partnerships were fairly technical and transactional in the past, now they are deeper and more strategic. PATH, which has worked with GlaxoSmithKline on a malaria vaccine for years, is now also engaging outside product development on health systems strengthening, Gibbons said.

At PATH, and many other organizations, partnerships are crafted both through high-level, headquarters-based relationships and at the local level through country directors who can best assess the players on the ground who could have the most impact.

The more strategic development and research comes from headquarters, but PATH has also made a deliberate decision to enable the field to build partnerships, Gibbons said.

Other organizations, like Pathfinder International, are at an earlier stage in their evolution. While it has engaged in corporate partnerships over the past five years, it hasn’t had a lot of systems in place. In the past, partners were largely selected based on field-level interest and alignment on the ground. That engagement has led the organization to recognize the need to be more strategic and less focused on short-term partnerships that may be more about bringing in additional financing.

Now, the organization is working with Accenture Development Partnerships on a strategy process that includes formalizing how the organization will select partners and conduct due diligence, Alden Nouga, Pathfinder’s director of foundation and corporate partnerships, told Devex.

Due diligence

It may be conducted by one researcher, an in-house team or a hired consultant, but most INGOs have a due diligence process to evaluate potential partners and identify commonalities and risks — reputational and otherwise — that might result.

Often, the first step is to eliminate companies identified as off-limits for partnerships. It might not be in the form of a blacklist, but most INGOs have identified a set of industries they won’t partner with.

The three most cited as being automatically dismissed in partnership consideration are the arms, tobacco and pornography industries, which many organizations see as harmful to their beneficiaries and counter to their missions.

Procedures vary once past that first step.

While Mercy Corps doesn’t have a list of industries or companies it won’t work with, the organization doesn’t accept all partnership opportunities either, Craft said. In cases where a relationship might not address a problem in a particular context, it doesn’t rule out future collaboration on a different issue.

A researcher on Craft’s team is tasked with evaluating the risks and downsides of each opportunity, including those that might be reputational.

Pact’s corporate engagement director doesn’t manage the due diligence process, which is instead reviewed by a different department to remove any potential conflicts of interest. The process looks at three different facets of a potential partner — relational, financial and contextual — and tries to identify any past or future issues that could hurt Pact or its beneficiaries.

Oxfam, meanwhile, has an ethical checking committee, which evaluates any potential major public relationship to see if what the partner is doing in any way “substantially or willfully undermines our mission,” Sahan said.

The committee looks into a company’s operations, evaluates media reports, reads company policies, identifies value matches and screens out any company that may harm the issues the organization is working to address.

“We’re quite careful in doing our homework,” Sahan said. The organization has said no to a lot of companies, in part because its strategy isn’t to acquire as many partners as possible but to develop transformative partnerships.

PATH has an internal due diligence process through which it researches individual companies, vets them against a set of criteria, including international frameworks and commonly accepted standards, and evaluates the partnership on mission alignment, Gibbons said.

That process can take anywhere from three to 12 months because it takes considerable effort to ensure a partnership is mutually beneficial and ensures greater impact on a challenge PATH is working to address, Gibbons said.

The timelines also vary at World Vision, from mere days to more than six months. The process varies too, depending on the scope of a specific partnership, said Chris Derksen Hiebert, World Vision’s director of external relations.

Global partnerships at the multinational level undergo a rigorous process with smaller ones facing less intense examination. Often, World Vision will use information from organizations that do ethical assessments of corporations or contract consultants to help with due diligence.

The evaluation process at World Vision doesn’t stop with the initial due diligence. It is critical to have clear objectives around what the partners plan to do together and to assess the relationship and evaluate how the partnership is meeting its goals regularly. If something serious were to occur, World Vision drafts formal agreements to include a clause that allows either partner to withdraw.

“That due diligence process has to continue right through,” Hiebert said. “It’s not just transactional at the decision point.”

New roles — inside and out

Part of the evolving partnership landscape is that INGOs are now engaging with corporations in different ways and playing new roles, which also means a greater need for specialized staff.

Oxfam often acts as a “critical friend” to partners, leveraging its own experience to help shape corporate actions and push corporations to do more, Sahan said.

This dual approach — where Oxfam may be criticizing a company and be in deep conversations with it working on solutions — has been a hallmark of its partnership strategy. It’s “Behind the Brands” campaign, which assesses the agricultural sourcing policies of the world’s 10 largest food and beverage companies, is an example of drawing attention to shortcomings while helping a company address them and improve supply chains to benefit smallholder farmers and the poor.

World Vision has also found that as it explores a greater relationship with corporate partners, it often takes on an advocacy role and works to influence the corporation and help them change the way they do business, Hiebert said.

Increasingly, INGOs engaged in deep partnerships will hold a seat on the board of a corporation, as is the case for Oxfam and Save the Children U.K. That gives INGOs a platform to influence decision-making on sustainability or product development and also provide input to headquarter policies.

To better help build trust and understanding and improve communication in partnerships, INGOs are building teams, creating new roles or hiring more specialized staff.

Mercy Corps has started hiring more employees with MBAs and business backgrounds. It is also doing more training around how to talk to businesses and providing more internal and external opportunities for staff to learn about partnership and private sector engagement, Craft said.

Some INGOs are building new teams, but at World Vision there is no single department or individual responsible for private sector partnership. Instead, a cross-functional team from the advocacy, program, strategy and fundraising divisions work together on due diligence and relationship management. If combined the hours spent would amount to several full-time positions, Hiebert said.

Pact chose to create a new position, and Emmett has been there a year as the organization’s first director of corporate engagement. While Pact has a long history of partnership, the creation of her role, to focus solely on corporate partnerships, demonstrates a shift in the organization and its desire to diversify.

But better partnerships with the private sector is about more than one, or three or 10 dedicated staff people, it is something that has to be embraced by the whole organization, she said.

That is where training across geographies and divisions comes in. More robust training, improved communication channels and shareable guidelines were all recommendations INGOs had to help promote buy-in across an organization and ensure field staff understands how to approach partners.

Essentials for a successful partnership strategy

In many cases, a successful partnership strategy starts with a need for cultural change.

“There is no small amount of change management that needs to happen internally at an organization, and securing top-down support and engagement is important,” Gibbons said.

Developing a due diligence strategy and implementing private sector engagement as a practice area is important. One way to engage staff is to do a “roadshow” to involve field staff in partnerships and help give them additional information, she said.

Organizations should be clear on their priority areas before exploring partnerships and be sure that an opportunity aligns with its goals and capitalizes on its core strengths before saying yes, Sahan said.

Having some sort of ethical checking or evaluation system to ensure value alignment is vital as well. If an NGO does policy and advocacy work, it is also important to ensure that any partnership agreement won’t preclude that work.

“A partnership can’t define your communications on issues,” Sahan said, adding that it is important that NGOs not put their credibility with the public in jeopardy.

Senior leadership, better education, greater understanding of the differences in corporate relationships and a willingness to fail and adapt are all critical to improving partnerships, Emmett said.

Adapting any set of guidelines to the structure and strategy of an individual organization is a must, because while organizations continue to improve their methodology and guidelines around partnership, it is clearly not a one-size-fits-all approach. There are those who choose to keep a door wide open, while others may be more cautious in their approach, but that is just part of the evolution.

Do you think INGO partnering practices are robust enough? Should there be additional considerations?

Devex, in partnership with the Shared Value Initiative, FSG and Global Impact, is examining how the world’s largest international nongovernmental organizations are transitioning their partnership strategies from traditional corporate partnerships to more scalable initiatives. We’ll look at how these initiatives accelerate both social impact and a business return on investment, while highlighting engagement in shared value during this special series “The Future of International NGOs.” Join the conversation using #FutureINGO.

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About the author

  • Saldiner adva

    Adva Saldinger

    Adva Saldinger is an Associate Editor at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.