A partnership between a brand and an NGO is no longer merely an image-boosting exercise, and such relationships are playing an increasingly pivotal role in the business strategy of both parties.
Partnerships between corporations and non-governmental organisations (NGOs) are becoming increasingly important to the business models and strategic aims of both parties, according to research seen exclusively by Marketing Week.
Factors such as innovation and having access to new areas of expertise are now among the main reasons that companies decide to partner with an NGO such as a charity or pressure group. Meanwhile, NGOs see such partnerships as increasingly important to their own long-term stability and credibility, the 2013 Partnerships Barometer by consultancy C&E shows.
The study, which surveys major companies and NGOs, reveals that boosting brand reputation and credibility is still the number one reason that corporates decide to get involved in these partnerships, with 91 per cent of businesses selecting this as a factor.
However, other more ‘strategic’ reasons have risen up the rankings, with innovation – the fifth most popular reason last year – now second, with 67 per cent of corporates selecting this a factor. The amount of companies selecting human resource development also rose by 17 per cent on last year to 56 per cent.
On the NGO side, securing access to funds remains the most popular reason for partnering, with all respondents selecting this. But other factors such as having access to business contacts and boosting credibility also scored highly among NGOs. In addition, the number of NGOs selecting ‘long-term stability and impact’ as a factor increased by 11 per cent to 56 per cent.
Manny Amadi, chief executive of C&E, argues that these long-term, strategic aims are symptomatic of the growing sophistication of corporate-NGO partnerships. “These relationships are maturing to the point where both sides are seeing that the value of partnering can come in many different ways,” he says.
“Both sides are aware of the strategic benefits and I think the responses indicate that the parties are beginning to test each other more.”
The barometer includes a ranking of existing partnerships whereby the respondents from corporates and NGOs were asked to name the corporate-NGO collaboration they admire the most. For the fourth consecutive year, Marks & Spencer’s partnership with Oxfam is top with 15 per cent of the vote, more than double that of the second-placed partnership between Boots and Macmillan, which has 7.1 per cent. GSK and Save the Children’s partnership comes third with 5.3 per cent, followed by Network Rail and The Samaritans with 3.5 per cent.
The M&S-Oxfam tie-up is part of the retailer’s wider Plan A sustainability programme, which it launched in 2007. The work with Oxfam covers a range of initiatives aimed at driving sustainable production and consumption, including ‘Shwopping’, a recycling scheme whereby M&S customers are encouraged to return old or unused clothes to M&S or Oxfam stores for use by the charity.
Adam Elman, head of Plan A delivery at M&S, says the retailer’s various NGO partnerships are vital to the strategic direction of the company. In addition to Shwopping, M&S works with Oxfam on implementing sustainable practices in its supply chain and on sharing knowledge between staff.
“Plan A is the most successful change programme M&S has ever run because we build it into everything we do,” he says. “The Oxfam partnership is a great example of that because we have hundreds of people involved, whether it’s our logistics colleagues who work closely with Oxfam logistics or our stores that have relationships with their local Oxfam store. It’s not a one-off scheme, it’s built into how we do business and our colleagues really respond to that.”
This close collaboration has resulted in significant cost savings and efficiencies for M&S, particularly in its supply chain. After beginning Plan A with a pledge to invest £200m over five years, the plan began delivering a cost benefit to M&S after two years, thanks to savings and new revenue streams. The cost benefit of Plan A last year was £135m, according to M&S.
In addition to the financial impact, the research reveals the different measures against which companies and NGOs measure the success of their partnerships. The most commonly used metrics in the business community are ‘employee engagement’ and ‘brand and reputation enhancement’, with 72 per cent and 70 per cent of respondents using these measures respectively. Despite the apparent success of M&S, only 30 per cent say they use ‘improvements in business practices’ as a metric to measure the value of their partnerships.
The most commonly used metric among NGOs is ‘direct contribution to the bottom line’, which is used by 81 per cent. In addition, 60 per cent of NGOs measure the impact on their brand reputation, while 46 per cent measure ‘customer/supporter engagement’.
Nicky Day, UK director of corporate partnerships at wildlife conservation charity WWF, says her organisation draws up a range of aims and targets before collaborating with companies. The charity has partnerships with 20 corporations in the UK, including BSkyB and Coca-Cola.
“Usually there are some goals that are common, some that are corporate and some that are more for us,” explains Day. “But we always have a very distinct, clear set that are very much tailored to the particular partnership.”
She notes that WWF’s partnerships help to support the charity’s conservation goals in different ways. In the case of Sky, for example, WWF has benefited from the reach and exposure of a major marketing campaign in which the broadcaster has pledges to save 1 billion trees in the Amazon. WWF is one of the most admired NGOs for partnering along with others including poverty charity Care and Children’s NGO Plan.
Meanwhile, through WWF’s partnership with Coca-Cola, the charity is working on developing more sustainable water stewardship practices for businesses. It is currently using evidence from this work at sites in the UK to lobby government on its environmental policy and regulations.
“We want to help businesses make the changes that are needed in order for us to achieve our aims,” says Day. “We can’t get businesses to make those changes unless we how businesses operate. By working together, we can push them to change and they can help us prove our case and show what’s practical so we’re not just talking from theory.”
Head of Plan A delivery, Marks & Spencer
Through our sustainability programme, we wanted to achieve the aim of stopping clothes from going to landfill. The partnership with Oxfam enables us to do that in a credible way. Oxfam has the supply chain and high-street presence that’s necessary if something like this is going to work. Its involvement also means people have the assurance that there is a wider social value.
There are clear benefits from the partnership in terms of brand and reputation but that’s not the reason we go into partnerships like this. The reason is the core challenge that we want to deliver on and the shared value of working together. It’s about building it into our business in a way that makes both organisations stronger.
UK director of corporate partnerships, WWF
Businesses are such big players in the areas where we are trying to achieve our conservation goals that we cannot achieve them if we don’t work with the business community. The key aim with our partnerships is to drive business transformation. That means we’ll work closely with businesses to influence their value chains and see how they can source more sustainably and have less of an impact on bio-diversity.
With some partnerships there is more of an emphasis on communication and philanthropy. Communication is an opportunity to reach people we wouldn’t otherwise be able to reach and help them to understand what’s needed for us to move forward. To us that is strategic anyway because we are engaging new people through the partnership.