Reputation is the key driver for corporate-NGO partnerships

C&E Advisory’s latest barometer study on NGO and corporate partnerships finds that corporates are much better at assessing the business performance of these tie-ups than charities.

While 63 per cent of corporates always undertake a yearly review of their relationships in collaboration with their partners, just 40 per cent of NGO respondents do the same. Likewise, 60 per cent of corporates carry out an annual review internally, compared with just 38 per cent of charities.

A fifth (21 per cent) of corporates and NGOs carry out major mid-term reviews internally, while 33 per cent of companies say they always do joint mid-term reviews with partners and 38 per cent of charities do the same.

Key

According to C&E Advisory chief executive Manny Amadi: “Corporates are a little more focused than NGOs and this has been consistent over time. The corporate sector takes [evaluation] more seriously, which means they can learn what is working and seek to leverage it; at the same time they can find out what isn’t working and change it.

“These processes help corporates have a better degree of confidence and stay on the right track,” continues Amadi.

The value of non-financial support

Yet across the board there is more confidence that arrangements between NGOs and corporates are meeting their objectives and delivering value than there was last year. Some 90 per cent of respondents believe partnerships are successful in this respect. The proportion of respondents who are ‘very confident’ on the corporate side has increased by 16 per cent year-on-year, while for NGOs it has risen by 18 per cent, reflecting a gradual return to confidence and optimism in the wider economy, suggests Amadi.

There remains a gap between how NGOs and corporates perceive the value of non-financial support, although this has narrowed. Almost half (48 per cent) of NGOs agree that by harnessing their corporate partners’ competencies and non-cash assets they can make more impact, while 69 per cent of corporates believe these assets will make an impression.

Partnerships contribute to growth – it’s the principle of doing well by doing good

Noam Buchalter, Kimberley-Clark Europe

Similarly, while 50 per cent of NGOs believe they have helped their corporate partners change their business practices for the better, a greater number of corporate organisations (59 per cent) feel that charities have helped them improve. Corporates (87 per cent) and NGOs (86 per cent) are almost equally positive about how partnerships have helped them improve their understanding of social or environmental issues.

It is encouraging to see that senior leaders on both sides are playing a role in developing these partnerships. The vast majority of senior leaders at charities (92 per cent) and businesses (93 per cent) are supportive. Marketing and communications teams also play a pivotal role, with 90 per cent involved at NGOs and 88 per cent at corporates.

“Finance and HR are the least engaged sectors at the moment, and potentially the least supportive,” says Amadi. “This may be thought surprising if you consider that getting involved in societal issues can be motivating for employees, particularly on the corporate side.”

The importance of strategic partnerships is only going to increase, with 89 per cent of respondents expecting to put more emphasis on tie-ups in the next three years. Notably, no one on either the corporate or NGO side envisages partnerships becoming less important.

When asked what is likely to push partnerships up the agenda in the future, 91 per cent of respondents foresee an increasing need to leverage one another’s resources for mutual benefit, and achieving greater reach and expanding opportunities for development are moving up the agenda. There is also a greater emphasis from both parties on long-term stability, with 73 per cent of charities and 71 per cent of charities saying this is why they engage in partnerships. Those figures are up 13 and 15 per cent respectively, year-on-year.

It is reputation and credibility, however, that are the primary drivers for 92 per cent of corporate businesses. They are an important consideration for 66 per cent of NGOs too, although their principal motivation continues to be access to funds (95 per cent).

Partnerships between corporates and NGOs are far from new, but the emphasis has shifted towards fewer, higher value agreements that aim to emulate the success of tie-ups such as that between Marks & Spencer and Oxfam, according to the research (see ‘Most admired partnerships’, below ). The partnership began in 2008 as a way for the retailer to donate used or unsold clothes. In 2012, M&S launched its Shwopping initiative to encourage shoppers to donate an old piece of clothing each time they buy a new one.

From the point of view of the NGOs surveyed, partnerships worth more than £10m annually have increased in number by 12 per cent compared with a year ago, while the number of tie-ups valued under £1m are down by 14 per cent. According to corporate respondents, the number of high-value partnerships has held steady, but smaller investments of less than £1m are up by 13 per cent. Overall, partnerships worth less than £1m still make up 31 per cent of the total number, but those worth more than £10m now account for 28 per cent.

Fewer, bigger, better

“Fewer, bigger and better is a strong trend,” says Amadi, “and there is a compelling rationale behind it, because if something is important you spend time realising your investment.”

More than half (52 per cent) of all respondents now consider most of their partnerships to be strategic, as opposed to tactical. For those partnerships where resource investment tops £10m, 71 per cent of businesses and charities class at least half their partnerships as strategic – a 19 per cent increase on last year.

When segmented, there is some disparity between the views of each sector though, as 64 per cent of corporates classify more than half their partnerships as strategic compared with 42 per cent of NGOs. Although the focus on strategy has improved year-on-year, there is always more to be done.

Marketers’ response

Kelly  O’Reilly, Co-founder, Sing London

Access to funds is one of our key priorities when looking for a partner but there are other considerations too. We recently launched a project called Talking Statues in London and Manchester, which we’re now hoping to take to cities around the world. We commissioned people including Patrick Stewart and Jeremy Paxman to create monologues for iconic statues, which people can listen to via their mobile phone. Because of the level of participation and publicity it received – in the first two weeks 7,000 people listened to a full monologue – we thought it would be a good match for a corporate sponsor. Until there is a change to public funding structures in the arts, organisations are going to become increasingly reliant on partnerships with corporates.

Noam Buchalter , European marketing manager dry bathroom tissue, Kimberly-Clark Europe

We’ve been working with Unicef at a group level to try to solve the global sanitation crisis, because one in six people still don’t have access to clean, safe toilets. Building reputation is part of it but we see this initiative as more than just philanthropy, it really is a social mission. Of course, people feel good about buying our products as a result, so it does contribute to growth – which is the principle of doing well by doing good. The idea of creating fewer, bigger partnerships is in line with our thinking. Andrex has a long and proud history of supporting many great causes; what we’re doing is continuing that but focusing on something close to our hearts and part of our overall mission to make people feel clean and confident.

Most admired partnerships

Marks & Spencer’s partnership with Oxfam continues to be singled out as the most admired corporate-NGO partnership, with 11 per cent of respondents voting for it in C&E Advisory’s latest study. The partnership involves sharing knowledge and working together to drive sustainable production and consumption. Respondents believe its success lies in the fact it is “easy to understand and high-profile” and “raises substantial funds to support Oxfam’s work while tackling a key environmental impact of M&S’s business”. The tie-up includes the ‘Shwopping’ initiative fronted by actress Joanna Lumley, which has seen consumers donate more than four million unwanted items, raising an estimated £3.2m for Oxfam and cutting the amount of clothes sent to landfill.

Partnerships between Boots and Macmillan Cancer Support (8 per cent), and GSK and Save the Children (7 per cent) are closing the gap to the leader.

The brand-led partnership between Boots and Macmillan aims to provide easy access to cancer information and support in a trusted environment. Since it began in 2009 Boots staff and customers have raised £9m.

The partnership between GSK and Save the Children was formed in May 2013 and has quickly made an impression. The goal is to save the lives of one million children and, in addition to advocacy, employee engagement and marketing initiatives, the two businesses are researching and developing child-friendly medicines.

“As well as cash and awareness, it’s about service delivery,” says Manny Amadi, chief executive of C&E Advisory. “It’s a combination of know-how and reach, which has a mission-led narrative. Many more partnerships of this kind will happen,” he predicts.

More trends

Why good deeds pay off for brands