Towards Sustainability

Optimising Corporate Fundraising

WHAT’S YOUR OPINION?

Changing Trends in Business / NGO Partnerships

Where we came from

• Values driven approach• Charity/Philanthropic Mind-set• Responsive to requests• Transaction based• Needs Focussed• Organisational Funding• Short-Term internal objectives• Isolated development priorities• Invisible – behind the scenes• Cash giving• Reports only on available information• Managerial Function

Current Paradigm

Progress towards strategic social investment and development

Traditional PhilanthropyDonationsSponsorships

In Kind GrantmakingProducts, services, skills, time, infrastructure

Social Entrepreneur-shipFinancial resources, operational advice & expertise, access to markets (trade)

Strategic InvestmentsAligned with core business interests, brand values, competencies, and government priorities

Systemic Socio Economic DevelopmentCollaborative Partnerships, influencing policy, contributing advocacy and high impact change

Question: Where are you placed on this continuum?

Strategic social investmentAlign strategic and

Operational business and

Brand imperatives

Measurable Impact on

Society and Environment

Align and support government Priorities and

Community needs

Measurable Impact and Return

On Investment forCompany / Community

Towards best practice• Core business? Specialisation?• Competitive Differentiator?• Theory/model of change?• Scientific research data?• Baseline?• Indicators?• Established – M&E and IA?• Community buy in? Proof of Engagement?• Partnerships?• Sustainability – program/community/organisation• Exit / Continuation Plan• Feasibility and Viability Study?• Cost benefit analysis• Publish best practice?• Benchmark?• Publish mistakes/lessons learnt?

Outsourcing • Issue: Relationship between donor and

grantee/intermediary:• Why do investors/donors outsource?

– To save time and money– To tap expertise– To obtain objectivity– Development is not core business

• What do investors/donors outsource?– Planning– Implementation– Evaluation

• How do investors/donors outsource?– NGO’s, NPO’s, CBO’s, PBO’s, Consultants, Contractors

Why do social investment Fail? (1)• Limited understanding of the often complex local context:

– Companies have sometimes commenced social investment initiatives without fully understanding the socio-cultural context or how their presence and actions can affect the complex dynamics between and among local community stakeholder groups. This has led to a range of unintended consequences, including the exacerbation of tensions or creation of conflict among communities

• Insufficient participation and ownership by local stakeholders:– Delivery of social/community projects without sufficient involvement of local communities and local

government in decision making around development priorities has resulted in projects with low relevance to/ and ownership of local stakeholders (and therefore by implication – low impact).

• A perception of “giving” rather than “investment” (Including lack of clear objectives):– The tendency to view social investment as charity, rather than as an investment linked to the business

and operational objectives – has resulted in vague mandates and a lack of direction and purpose for socio economic development strategies and programs.

• Detachment from the business: – Social investment programs have tended to be planned and implemented in isolation from business

activities and other day-to-day actions affecting all stakeholders. This has limited social investment’s effectiveness in helping the company to address key social risks and opportunities at the site level or to take advantage of business efficiencies and competencies in support of local communities.

Why do social investment Fail? (2)• Responding to local requests in an ad hoc manner:

– Ad hoc approaches are typically opportunistic and focus on short-term outputs rather than catalysing long-term change. The risk, in many cases, is that the sum of all these disparate contributions to local causes does not add up to anything that either the company or host communities or even government can point to as a tangible or lasting socio economic development benefit.

• Lack of professionalism and business rigor:– Few social investment programs are held to the same standards that companies apply to other business

investments they make (in terms of professional rigor, a clear business rationale, planning and budgeting processes, and accountability for results). This often reflects the low priority given to social investment by senior management when there is no perceived link or added value to the company’s bottom line.

• Insufficient focus on sustainability:– It is only in recent years that the sustainability of social investment activities supported by companies has

become a key factor in project selection and design. In the past, short-term objectives took priority over longer-term considerations, and sustainable development principles. Outcomes and criteria were not given much emphasis.

• Provision of free goods and services: – While well-intended, the consequences of providing free goods and services, or infrastructure and money for

that matter, have not proven to be in the interests of either the company or local stakeholders. The lack of requirements for matching contributions (whether financial or in-kind) has made it difficult to generate shared ownership or financial sustainability, and has instead fostered dependency.

Why do social investment Fail? (3)• No exit or handover strategy:

– Commencing activities without planning in advance for the company’s eventual withdrawal has rendered many company-supported programs unsustainable and created difficulties for the company around its “social license to exit” in times of financial cutbacks or project end.

• Overemphasis on infrastructure and under emphasis on skills/capacity building:– Traditionally, social investment programs have been dominated by company-led, bricks-and-mortar types of

projects (particularly in the mining industry) with a significant lack of investment in the participatory processes, such as skills building, and organisational development necessary to affect and maintain long-term change.

• Lack of transparency and clear criteria:– Unclear criteria have led to numerous cases of conflict between and among communities over who gets what

and why. When transparent criteria are lacking, company practice in distributing benefits may be perceived as secretive, unpredictable, and susceptible to manipulation.

• Failure to measure and communicate results:– In many cases the effectiveness of social investment programs is unknown because it has not been systematically

tracked or measured the way most other business activities or expenditures would be. Common shortcomings include the lack of proper baseline/impact data (i.e. social impact studies) and a focus on measuring the volume of spend (inputs) or the number of outputs (number of beneficiaries) rather than the actual quality of the outcomes.

NGO Issues with corporate investors• Lack of information on focus areas, budgets

and strategies• Delays in disbursements• Donor driven priorities and systems• Uncoordinated donor practices• Short term focus• Uncertainty about and lack of standard

performance metrics and diagnostic tools• Uncertainty about roles and responsibilities• Centralized and decentralized decision-

making• Knowledge about development issues• Inflexible strategies – share development

know how, best practice, development models, research

• Help with capacity building, operational and infrastructure costs

Suggestions for best practice

• Share information and research• Standardize and simplify procedures• Be transparent – communicate and

provide information• Multi-year funding requests and

commitments• Use common/transparent

performance indicators• Clear rules for suspension• Reduce unnecessary admin burdens• Consider operational funds and

assistance

Changing Trends in Business / NGO Partnerships

• Opportunities for cross-sector collaborations are widening

• Companies are becoming increasingly strategic in their NGO engagement

• Companies increasingly seek global engagement with local action

• Employee engagement is increasingly a key driver for collaboration

• Profile, branding and communication matter

– Source: CHANGING TRENDS IN BUSINESS-NGO PARTNERSHIPS - A Netherlands perspective

– By: Maria E. Bobenrieth and Darian Stibbe

The Ideal NGO• Brings clear value propositions• Collaborates• Communicates with excellence• Creates synergy• Is transparent• Is strategic• Is knowledgeable• Is knowledgeable• Create profile & network• Is flexible

Contact• Reana Rossouw• Next Generation Consultants - Specialists

in Development• E-mail: rrossouw@nextgeneration.co.za• Web: www.nextgeneration.co.za