Non-governmental organizations (NGOs) and businesses have been collaborating with each other through corporate social responsibility (CSR) programs for more than 60 years now (Cramer-Montes, 2017). It evolved from serving local communities at first to international communities the latter. It began simply as a reaction to social and environmental issues then grew into a sustainable response to these challenges.
Aside from CSR, NGOs and businesses have collaborated in different forms (Mirońska & Zaborek, 2018). These can be philanthropic, transactional, or integrative in nature. Philanthropic forms include financial donations, donations in-kind, and access to potential donors as in international grants for nonprofit organizations. Transactional forms include employee volunteering and sponsorship. Integrative forms include joint ventures.
Through these relationships, NGOs and businesses get social, organizational, and reputational benefits (Mirońska & Zaborek, 2018). NGOs achieve their social goals, raise funds and increase public awareness. On the other hand, companies acquire talent, scale up operations, and build relationships with key actors (Chakravorti, 2015).
Drivers of Collaboration
From this mutual association, nonprofits and for profits thrive. What factors affect their course?
In a study in Poland, researchers found three factors that drive collaboration between NGOs and businesses (Mirońska & Zaborek, 2018). The first factor, alignment, refers to organizational fit in the form of similarity of partners’ values, willingness to respect the partner’s values if different, and compatibility of partners’ objectives and strategies. The more there is an organizational fit, the more benefits the partners get. The second factor, commitment, can be characterized by the feeling of loyalty and satisfaction, the effort exerted to maintain the collaboration, and the perceived importance of the relationship. The more loyal and satisfied partners feel, the more they cultivate the relationship, and the more they give value to it, the more benefits the partners get. The third factor, trust, is explained as the confidence in a partner’s credibility and benevolence. Collaborations become more successful when partners believe the partner is competent, reliable, fulfills expectations and promises, and when they care and support each other.
What happens when a factor, like trust, is weak?
In India in 2013, the CSR bill was passed which mandates businesses to spend at least 2% of their profit on CSR activities for funds for NGO in India, government programs, foundations, or trusts. This has, however, only increased NGO-business collaboration slightly as there is a lack of trust between the two sectors: “While NGOs tend to see businesses as predatory, the corporate sector appears to be apprehensive of a lack of operational transparency, financial mismanagement, and inefficiency in NGOs.” (Jayaraman, D’Souza, & Ghoshal, 2018)
Not all is lost though. In a case study, the researchers recommend ways on how to build trust between NGOs and businesses: (Jayaraman, D’Souza, & Ghoshal, 2018)
Network to gain formative trust. Consider using the services of credible organizations to build businesses’ confidence in NGOs.
Improve communication and information sharing. It is important for businesses to understand the impact of programs they fund through NGOs. There needs to be a way for businesses to appreciate and see results. This can be through systematizing data collection for monitoring and adopting corporate metrics for evaluation.
Share resources for process convergence and skills transfer. NGOs and businesses have their unique strengths. Sharing these with each other raises trust as partners can be confident in their processes. Culture and expertise can also be built by interacting with each other.
Following these steps can build trust between an organization and the partner company, which leads to a fruitful collaboration. Aside from strengthening trust, also check if the NGO and the business are aligned in terms of values, objectives, and strategies. Lastly, remember that the NGO-business collaboration will be a success as long as both parties work on the relationship.
- Chakravorti, B. (2015, May 28). Corporate-NGO Partnerships: Why They Work And Why They Don't. Retrieved May 23, 2019, from https://www.forbes.com/sites/skollworldforum/2015/05/28/corporate-ngo-partnerships-why-they-work-and-why-they-dont/#7feb6e2f15d3
- Cramer-Montes, J. (2017, March 24). Sustainability: A New Path to Corporate and NGO Collaborations (SSIR). Retrieved May 23, 2019, from https://ssir.org/articles/entry/sustainability_a_new_path_to_corporate_and_ngo_collaborations
- Jayaraman, A., D’Souza, V., & Ghoshal, T. (2018). NGO–business collaboration following the Indian CSR Bill 2013: Trust-building collaborative social sector partnerships. Development in Practice, 28(6), 831-841. doi:10.1080/09614524.2018.1473338
- Mirońska, D., & Zaborek, P. (2018). NGO—Business Collaboration: A Comparison of Organizational, Social, and Reputation Value From the NGO Perspective in Poland. Nonprofit and Voluntary Sector Quarterly,48(3), 532-551. doi:10.1177/0899764018797476