Chapter 4 - Determinants of successful NFP-business partnerships
In this section:
- 4.1 Benefits of community business partnerships
- 4.2 Characteristics of successful partnerships
- 4.3 Advantages of partnering between sectors
- 4.4 Strengthening business awareness of NFPs
- 4.5 Decision-making within partnerships
- 4.6 Chapter summary
As noted in previous chapters of this report, many NFPs and corporations entering partnerships believe they can deliver outcomes that other institutions or collaborations in the community cannot deliver.
Network governance (see 2.3) that includes NFPs and business has the potential to produce certain societal outcomes.
But these are certain issues and societal outcomes that NFPs — and companies — say they are best placed to address and produce positive outcomes via corporate community partnership (or are positioned to make unique contributions to societal issues).
Benefits of community business partnerships
During workshop group discussions, NFP organisations identified the following benefits of community business partnerships:
- access to donors — the corporate sector houses individual high net-worth donors. Corporate partnerships raise the profile of NFP organisations and encourage individuals disposed to philanthropy to make significant donations
- capacity building — for the NFP organisation itself, and skills transfer as part of program service delivery
- enabling — association with a corporate partner may open previous unattainable avenues to new sponsors and communities
- funding — diversifying funding sources reduces risk and the impact of sudden or unexpected funding withdrawals
- funding sustainability — the ‘pragmatism of needing to get funds’ means NFP organisations seek long-term partnerships so they can spend less time looking for funds, and more time achieving the core goals of their organisation. Long-term corporate funding also enables NFP organisations to pursue broader activities and increase the scope of their service delivery. Longer-term community partnerships for many NFPs offer also more reliable and sustained funding streams than are available from government
- better public awareness — of the NFP organisation and its cause
- reputation — NFP organisations are increasingly seeing themselves as ‘trusted brands’ that can benefit from working with the corporate sector.
Not-for-profit executives identified the following obstacles to achieving successful community business partnerships:
- alignment — with ethics and values has changed over recent years and has become increasingly important. NFP organisations do not want to endanger their own reputation by either real or perceived inappropriate practices by a corporate partner
- capacity constraints — NFP organisations may be unable to meet business needs for accountability (reporting, requests for placement of volunteers, governance requests)
- cultural gaps — corporations not understanding fully the modus operandi and motivations of NFP organisations, and NFP organisations not appreciating business’ need for funding accountability and employee engagement as part of corporate community partnerships
- corporate social responsibility — is increasingly drawing the corporations towards partnerships with NFPs. However, there can be misunderstandings by the corporation as to what a potential partnership involves.
Characteristics of successful partnerships
Our analysis confirms the view that a successful corporate community partnership exists where there is a clear alignment between organisational cultures and imperatives of the corporation and the NFP organisation to achieve the best possible outcome for a public issue (discussed in the previous chapter).
This view was confirmed by NFP organisations providing input for this research report. Sharing a common goal or cause is one of the most fundamental elements of partnership success, according to most NFPs participating in this report.
Other characteristics of success identified by NFPs and our analysis are canvassed in the following pages.
Partner selection
Choosing the right partner depends on the extent to which the characteristics and nature of a not-for-profit organisation and business align to create mutual benefits.
Our observation and those of Knights (2004) are that businesses tend to choose their not-for-profit partners based on their credibility, activity orientation, regional presence, leadership opportunities and alignment with corporate strategy.
Corporations at the front of the curve seek to understand a prospective not-for-profit partner’s internal operations, quality of services and programs, strength and skills of management, ability to self-evaluate and measure performance, ability to achieve core objectives, and willingness to be held accountable for services and programs (Scaife 2006).
The Centre’s 2007 study drew particular attention to NFP ‘fit’ with issues of business concern in a corporate community partnership (for example, resource companies with environmental groups) or capability (for example, telecommunications with telephone help lines).
As also noted, reputation considerations influence partner selection for not-for-profit organisations and corporations. In the NFP realm, Oxfam, for instance, reports that it maintains a manifest of high, medium and low risk industry sectors it considers when investigating and examining partnerships with companies.
International literature confirms our findings on the challenging aspects of partnerships. Seitanidi and Ryan (2007) suggest these include the need to address challenges such as
- attention placed on the outcomes of the relationship — which may overshadow the importance of the process of the project for NFP organisations and interaction between partners
- lack of symmetry between partners — power dynamics of the relationship may favour one partner
- perceptions of the motivation driving each relationship — the public can be sceptical about NFP-business relationships, and may not trust the messages communicated about the partnership.
Elements of successful partnerships
Research from Boston College’s Center for Corporate Citizenship (2005) and Levine (2004) provides an overview of common elements of successful corporate community partnerships.
These include:
- clearly articulated and shared mission — with recognised short and long term goals
- commitment — of time and funding, removing the distraction of ad hoc fundraising for the NFP organisation
- compatible strategy and values — between the NFP organisation and business
- continual measurement and evaluation — of programs, as well as the partnership itself
- decision-making — in the best interest of the partnership and to the best interests of each partner
- good governance and transparency — particularly relating to financial matters
- identity and integration — of the partnership, allowing each partner to separate their individual reputation and brand, while integrating the mechanics of the partnership into the structure of the business and NFP organisation
- joint decision-making and power-sharing — possibly including placing corporate executives on the Board of the NFP organisation
- ongoing learning, adaptability and flexibility — allowing programs to evolve and the partnership to grow organically
- open communications — establishing mutual trust, as well as anticipating and preventing problems
- recognition — of the various strengths brought to the partnership by each organisation, for example the sector and program expertise of the NFP organisation, and the measurement and reporting expertise of the business
- suitable programs — that fit with the available resources, organisational size, and location
- value creation — programs associated with the partnerships create value and benefits integral to the partnership itself.
The Centre’s 2007 report on Corporate Community Investment in Australia highlighted successful partnerships that include many of the factors listed above.
These included long-term partnerships such as Conservation Volunteers Australia and BHP Billiton, Inspire Foundation and Bristol-Myers Squibb, and The Smith Family and Colgate-Palmolive.
Sustainability (length of relationships) appears to be a characteristic of what is required between the sectors for best practice partnerships.
Not-for-profit organisations and businesses increasingly talk the language of partnerships and of the characteristics of integrative collaboration, describing relationships that are deeper and longer than in the past.
According to three NFPs participating in this research:
We are looking for longevity with our corporate partners. We want opportunities to create stronger relationships year after year.
Companies are increasingly looking long-term. A sustainable partnership needs to be able to survive changes in managers.
Our multi-faceted partnerships (including cash and in kind support, pro-bono and volunteering support) works well….whereby both the corporate and the NGO contribute a range of inputs and engagement opportunities that result in genuine mutual benefit.
We found that partnership requires a substantial level of interaction and engagement between two or more organisations, and involves shared objectives and a collaborative mentality.
One NFP commented:
Sometimes there is just great synergy and it makes sense [to work with business].
Another stated:
We draw on our corporate partnerships all the time. We leverage our partnerships to find more opportunities.
Alignment of values
In the group workshops held to assist this report, an alignment of values between a business and a not-for-profit organisation was also considered essential to a successful partnership.
Such alignment is reinforced by the following workshop comments:
We have a long history of working with corporates. In the past, partnerships meant sponsorship and was PR-driven. It is a lot more sophisticated now, with a focus on common values.
We didn’t talk mutual obligation previously. Now there’s a lot more emphasis on mutual goals and values.
Such is the importance of values alignment that many NFP organisations indicated they compile a list of businesses and other organisations that are ‘off-limits’ for the purposes of partnerships because of their perceived values, and create lists of organisations aligned positively with their values that should either be considered or pursued for partnership.
Not-for-profit organisations without formal guidelines indicated they evaluate partnerships and other fundraising agreements on a case-by-case basis. Most NFP organisations indicated they have refused funds and in kind contributions from certain companies and industries because they believed there was not a ‘values match’.
A comment from a workshop participant reflects this:
We deal with ethics issues daily, and have an ethics policy. There are some difficult issues. For example, the actions of some firms have caused the problems that we’re now working on.
As noted earlier, some NFP organisations use less obvious or counter-intuitive partnerships to their advantage.
We have a cheeky way of marketing ourselves and are able to work with some companies that are not obvious partners.
Mutual understanding within partnerships
Partnerships between not-for-profit organisations and businesses bring two fundamentally different types of organisations together.
As with any type of relationship, the NFP-business partnership is vulnerable to differences in goals, objectives, values, cultures, strategies, management styles and operating approaches (Berger et al. 2004). Operational differences between some not-for-profits and businesses result in different management styles, processes and procedures competing within partnerships.
These differences may be ‘positively capitalised upon and learned from’, allowing the partnership to continue in a productive way (Stott 2007, p.10).
Many NFPs suggest that much desired longevity of partnership arrangements and concerted efforts by business are underpinned also by both partners to discuss openly and understand individual objectives.
Our survey results indicate 77 per cent of not-for-profit organisations believe they work well with business (see Figure 4.2). Only 2 per cent said they did not work well with business (21 per cent were ‘neutral’).
Sixty-five per cent of respondents stated NFP organisations and business generally agree about projects on which they can work as part of their partnership. And 70 per cent say they understand the objectives of the businesses with which they work — a contrast to the 49 per cent who say corporations understand their objectives. These results are illustrated in Figure 4.1.
Fig 4.1: Objectives - Not-for-profit sector experience working with business
Survey question: We find when working with business that:
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: The response categories ‘strongly agree’/‘agree’ and ‘strongly disagree’/’disagree’ are combined in this graph.
Not-for-profit organisations were less certain about the ability of business and NFPs to understand the language and share the values of the other. Comments from workshop research participants included:
There is a need to understand language.
Things like cross-sector partnerships are not well understood. We need to get new language and thinking.
From our survey, 45 per cent of not-for-profit organisations stated the sectors understand each other’s language and say the sectors share similar values (37 per cent were ‘neutral’ on this issue). These findings are illustrated in Figure 4.2.
Fig 4.2: Mutual understanding – Not-for-profit sector experience working with business
Survey question: We find when working with business that:
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: The response categories ‘strongly agree’/‘agree’ and ‘strongly disagree’/’disagree’ are combined in this graph.
Our workshop discussions also illuminated a view held by some NFPs that despite each sector working together well, NFPs are as efficient and adroit as their private enterprise partners.
I have worked in the corporate and NFP sector. They are very different, but the biggest difference is that businesses believe they are less bureaucratic and quicker to produce outcomes than NFP organisations. This is often not the case.
Another comment:
Our operating ratio is much lower than most of our corporate partners – but they talk like we are the basket case and need help with all of our operational areas so they can get maximum value for money from us. We always need help but we are efficient – very efficient.
Our consultations for this report reinforced that some NFP organisations operate in a ‘crisis-driven’ or reactive demand mode, especially in certain social welfare and human services arenas, where demands can be urgent and resources stretched.
Several large and small NFP organisations (but not all) working in human-crisis environments indicated it is often difficult to engender business partner understanding of how longer-term NFP planning and strategy can be affected by this crisis driven modus operandi.
Risk management
In recognition of the differences between the not-for-profit and business sectors both parties in a corporate community partnership commit to a risk management assessment of the partnership.
Where they are applied, NFPs say risk assessments of reputation, employee engagement, stakeholder impact and management protocols — either as part of partnership investigations or before partnership management modus operandi is agreed — help to deliver success in partnerships.
According to many NFP organisations, thoughtful anticipation of these issues assists them to approach the management and modus operandi of partnerships based on protocols for a relationship, rather than by relying on interpretation.
According to one seasoned senior NFP executive:
Rather than rely on anxiety and guesses on each side about issues and problems and if we understand each other, I have found that setting protocols so issues or perceived problems can be raised takes about 80 per cent of effort from a corporate/community partnership.
Managing the daily aspects of NFP-business partnerships is only one aspect of risk management in such relationships. Our research concludes the longer a NFP and corporation have been engaged in a corporate community partnership, the lower NFP organisations perceive partnership risk.
Many not-for-profit organisations note they still experience the ‘vagaries’ of business budget processes, and perceptions that corporate business partnership funding is ‘the first to go’ when corporations need to reduce operating outlays.
Our observations over many years, and NFP observations also, suggest deeper and longer running partnership agreements help insulate NFP organisations from this short-term ‘stop-start’ vulnerability.
Box 4.1 provides a brief overview of partnership risk management strategy.
NFP-BUSINESS PARTNERSHIP RISK MANAGEMENT STRATEGY
Risk management should be incorporated into the design and implementation of NFP-business community partnership agreements.
Typical steps in risk management can be adopted in a partnership situation, including:
- assessment and categorisation of the risks of the partnership (including presence of inconsistent organisational cultures, lack of resources, and addressing sensitive issues)
- evaluation of the probability and consequences of risks
- prioritisation and identification of main focus of risk management
- management of the risks through control strategies
- monitoring and reviewing of the results.
Source: Mundy n.d.
Exclusivity of partnership arrangements
Some not-for-profit organisations claim some corporate partners often ‘push’ them into an exclusive partnership, when they would instead prefer to spread corporate association and funding across multiple partnerships. Administering multiple corporate partnerships, however, does require considerable management attention and organisational capacity by the NFP.
Exclusivity does not appear to be a major limiting factor for not-for-profit organisations entering partnerships, or pursuing them.
Most NFP organisations interviewed for this research indicate they understand the reasons businesses seek partnership exclusivity, overall or within specific industries, including for competitive marketing or branding reasons.
Some not-for-profit organisations find it advantageous to offer market exclusivity, for example, by partnering with a single corporation only within an industry sector — for instance, with only one financial services company, or a single corporation in the retail sector.
In recent years, some not-for-profit organisations (for example, Australian Business Community Network and Landcare) have sought multi-corporate support under a non-exclusive partnership model, befitting their business and operating model. This maximises their reach, funding and impact.
As noted by some NFPs — particularly large national organisations — this is also critical to assisting in maintaining the scale of their organisations.
There are other examples of non-competitive programs within certain business sectors that focus on a collective interest, such as the Pilbara Industry’s Community Council in Western Australia, which is an industry initiative aimed at better coordinating the resource sector’s community activities around Indigenous employment and training and the sustainability of towns in the Pilbara region. The program brings together resource businesses, government and community organisations.
Some not-for-profit organisations participating in this report would prefer the corporate sector to take a more co-operative approach with other businesses to allow multi-partnering with NFP organisations in the same sector when possible, and when competitive considerations allow.
Advantages of partnering between sectors
NFP organisations see considerable value and success in partnerships with business. Almost 70 per cent of respondent NFP organisations to our quantitative survey find that working with business improves what they do (see Figure 4.3). Forty-eight per cent stated that projects are more successful when partnering with business.
Fig 4.3: Outcomes of not-for-profit business partnerships
Survey question: We find when working with business that:
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: The response categories ‘strongly agree’/‘agree’ and ‘strongly disagree’/’disagree’ are combined in this graph.
Advantages of partnerships
NFPs participating in our research identified advantages flowing from corporate community partnerships that have a significant impact on their operations.
These benefits include:
- access to increased resources and funding, including to build capacity
- opportunity to further the core mission of NFP organisations by improving the engagement of the corporate sector — with that mission
- heightened public exposure, which may improve the ability of NFP organisations to attract additional funding from new areas in the future
- exposure to corporate expertise in internal reporting and external accountability, further building NFP capability
- exposure to corporate management, leadership and communication skills
- opportunity to benchmark not-for-profit methods and structures against those of business, leading to improvements in efficiency.
In response to the question of what is working well for NFPs in their partnerships with business, one NFP leader nominated technical support and capacity building:
…in many cases corporates have commercial expertise that doesn’t exist in NFPs or exists at the same level as NFPs. This exchange delivers a range of mutual benefits and has added great value and cost savings to our organisation.
Another benefit noted was:
...corporates providing NGOs with non-traditional means of support, such as to their stakeholder channels [including customer base for disaster relief fundraising].
Box 4.2 provides an example of partnership benefits that Landcare Australia offers its business partners.
CASE STUDY — LANDCARE AUSTRALIA
Landcare Australia is a national network of community groups that focus on efforts to conserve and improve their local environment. The organisation facilitates partnerships between local communities and all levels of government, as well as corporations and SMEs. Landcare Australia ranks its business partners Diamond, Platinum, Gold, Silver and Bronze.
Landcare Australia understands the motivations and difficulties of partnership formation and continuity, and as such, outlines clear benefits and incentives to prospective partners.
These benefits include:
- access to the Landcare Australia brand for corporate sales advantages
- opportunity for staff, team and morale-building exercises
- special deals as a Landcare partner
- facilitate brand loyalty
- increase triple bottom line (social, environmental and financial) performance
- network with government and other business
- share the benefit of Landcare Australia's 83 per cent brand recognition
- link to more than 4000 community Landcare Australia groups
- cost-effective community investment options.
Landcare Australia offers a variety of partnership experiences. These include:
- funding ‘on-ground’ Landcare activity
- volunteering for employees
- providing in kind resources.
Source: Landcare Australia 2008.
The benefits of partnerships with business is well-understood by NFPs, with funding, capability transfer and reputation leverage most highly valued.
Figure 4.4 illustrates that 98 per cent of survey respondents indicated not-for-profit organisations work with the business sector to secure a funding source.
Interestingly, 54 per cent of NFP organisations agree they partner with corporations for reputation benefits, which is also one of the top three motivators for corporations pursuing community partnerships (Centre for Corporate Public Affairs 2007).
Fig 4.4: Why do not-for-profit organisations work with the business sector?
Survey question: What do you believe are the main reasons why NFP community organisations work with the business sector?
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: The response categories ‘strongly agree’/‘agree’ and ‘strongly disagree’/’disagree’ are combined in this graph.
Strengthening business awareness of NFPs
Consensus among surveyed organisations in the not-for-profit sector suggests better communication with the business sector about NFP organisations and their role is desirable and sought by NFPs.
Many NFP organisations emphasised that this is the key to institutionalising partnerships, and ensuring long-term, sustainable funding.
Not-for-profit organisations interviewed say they spend considerable time ‘educating’ large enterprises about the NFP sector.
This includes efforts to engage corporations about what they can expect from partnerships, and how to work on issues and in areas where both partners may benefit.
As noted earlier, NFPs say the longer a corporate and NFP had been involved in a corporate community partnership, the deeper the understanding both entities have of their objectives and priorities.
The desire of many NFP organisations for business to better understand the sector is indicated in the following comments from our NFP workshops:
We as a sector have a responsibility to educate the corporate world about what CSR is and what it costs.
More and more effective communication between the sectors is required.
Education is clearly the way to go. It’s the personal relationships that make the difference. A not-for-profit organisation needs to find a champion within the company that will take its cause to the top.
The NFP sector is in a position to educate the corporate sector about the best way to report on intangible issues, and what other corporations are doing.
For some reason, corporations with all their resources and know-how just cannot seem to get their heads around NFP organisations, and often expect an NFP to operate in the same way as a large business.
Suggestions proffered by NFPs to improve understanding between the sectors include:
We spend a lot of time educating business (about how NFPs operate). This is an area for policy remedy — perhaps something the Business Council of Australia, the Australian Chamber of Commerce and Industry or the Government could take on — to explain how the not-for-profit sector operates.
Businesses who have experience working with and within the NFP sector tend not to share this knowledge with other businesses. A mentoring program between businesses could overcome this.
As NFP organisations, we seem to spend an inordinate amount of time educating businesses about how NFP organisations operate. This educative role needs to be institutionalised somehow so we can focus more on delivering partnerships.
Figure 4.1 illustrates that almost half of survey respondents agree business understands their objectives, 54 per cent say it takes time for mutual obligations to align.
Two-way mentoring between business and NFP executives could improve information sharing about corporate community partnerships and how NFPs operate differently from business in particular.
Box 4.3 provides a case study on Social Ventures and its role bringing together business and not-for-profit executives. The Australian Business Community Network has also had two-way mentoring success with senior business executives and heads/ senior managers of schools. This serves also as a good model of strengthening cross-sectoral understanding.
CASE STUDY — SOCIAL VENTURES AUSTRALIA
Social Ventures Australia is an independent non-profit organisation that aligns the interests of philanthropists with the needs of social entrepreneurs to address Australia's community challenges. The organisation supports non-profit ventures in five focus areas (Young People, Indigenous Community Building, Ageing, Employment, and Environment) by providing them with funding, mentoring and organisational tools.
The organisation matches social entrepreneurs or managers with corporate executives willing to provide strategic advice and guidance on business-related issues.
For example, the organisation matched the Director of Centacare Wilcannia-Forbes (a NFP offering social welfare services in rural and remote communities of NSW) with a strategy Director at AMP. Through informal conversations every two weeks, the two professionals got to know each other and better understand Centacare’s challenges.
Source: Social Ventures Australia 2008.
Kramer and Kania (2006) suggest several steps NFP organisations can take to enhance effective partnerships with business. These have resonated with the findings of our research in the Australian context. These steps include:
- seeking partners, not villains — NFP organisations often have considerable experience developing lists of companies that may have caused a particular social problem, to apply public pressure on those enterprises to change. By focusing instead on companies that have the resources to help solve the problem, a NFP can develop a different and expanded list of potential corporate partners
- helping business set affirmative goals — many companies are looking for ways to demonstrate their corporate responsibility by developing affirmative approaches to solving social problems. But they often lack the ability to understand the issues fully and to frame ambitious but realistic goals. NFP organisations often have a deeper understanding of the social problem, which enables them to help companies devise more comprehensive strategies and set more ambitious and attainable goals
- asking business for more than money — it is relatively easy for a NFP organisation to target a company for a grant or a donation. It is much more difficult for a NFP organisation to understand the full complement of resources that a company can bring to bear on solving a social problem
- sharing the halo with business — many NFP organisations are cautious about aligning themselves too closely with business partners because it may put their reputation at risk. NFP organisations need to overcome that fear, because the benefits that can accrue from doing so far outweigh the risks. NFP organisations can look smart, creative, and efficient by tapping business capabilities, and companies can enhance their reputations by taking affirmative steps to solve social problems. It is a win-win situation but only if NFP organisations and businesses are willing to share with one another the halo effect that comes with success.
Movement of staff between the not-for-profit and business sectors
The movement of staff between the not-for-profit and business sectors is a concrete and very physical vehicle to strengthen mutual understanding.
Larger organisations reported their staff are often ‘poached’ by businesses to work within their CSR units. But there is also a trend of corporate sector employees to shift to NFP organisations.
Individuals often move from the business world to the NFP sector seeking better work-life balance, or searching for more rewarding or engaging causes and issues on which to work.
There appears to be an even higher level of exchange between the NFP sector and government, particularly in Canberra. Some NFP organisations there reported they compete directly with the public service for staff. And although there is staff movement between government and NFP organisations, this is not perceived to translate always into government better understanding NFPs.
The release of corporate staff for fixed term secondments in NFP organisations, and active engagement of management volunteers in their governance, is sometimes motivated by leaders in business and government wanting to expose their staff to wider work and life experiences.
Decision-making within partnerships
Forty six per cent of not-for-profit organisations responding to our survey have significant, long–term agreements with business partners.
Figure 4.5 illustrates that of these NFPs, 89 per cent say they involve mutual obligation, and 82 per cent say agreements tie the use of support to specific programs.
The survey results also revealed the frequency with which these agreements are reviewed. Forty-three per cent of NFP-business agreements are reviewed annually. A further 36 per cent are reviewed against specific project milestones. These figures suggest there is considerable accountability and assessment activity within partnerships.
Fig 4.5: Factors included in not-for-profit business agreements (of those not for profits with agreements)
Survey question: [If your organisation has significant, long-term agreements with business partners], what is usually included in these agreements?
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: Respondents selected as many answers as were applicable.
While there is some criticism of companies by NFP organisations for undervaluing support for basic infrastructure, less than a quarter of partnerships constrain the use of partnership resources for operating costs or ‘overhead’ (see Figure 4.5).
Figure 4.5 indicates also significant relationship maturity in how partnerships may end, with 64 per cent of NFP organisations reporting exit provisions were a feature of partnership agreements (although we note upfront understanding does not always lead to successful closure).
The Centre’s report on Corporate Community Investment in Australia (2007) also highlighted the trend to develop partnership agreements or contracts that optimise the value for both parties.
Mining giant Rio Tinto was an early mover developing sophisticated relationships with NFP partners.
The objectives it developed are included in the comprehensive and formal contracts it signs with its NFP partners. These include:
- both parties (the company and NFP) are committed to mutual benefit that can be articulated and understood by both parties
- neither will be in a dependency relationship to the other as a result of the partnership
- both parties are able to demonstrate the relevance of the partnership to their own stakeholders, and society at large
- both parties recognise the strategic importance of the partnership beyond the immediate program’s objectives and deliverables, to the longer-term importance of sustainability, reputation, and social cohesion
- both parties are committed to transparency and accountability in all aspects of the partnership, having the highest regard for individual rights and ethical, social, legal and environmental imperatives
- both parties are committed to a set of principles for the relationship, including respect, recognition and regards
- both parties are committed to establishing a mutually agreeable exit strategy’ (Centre for Corporate Public Affairs 2007, p.117).
Our research for this report reinforces the view that partnership agreements are becoming more sophisticated.
Our survey results (see Figure 4.6) indicate that more than half — 52 per cent — of respondent NFP organisations rarely have issues negotiating partnership agreements with business (15 per cent of survey respondents say this is an issue for them). More than half report also that they have no issues agreeing to the community value proposition with their business partner, suggesting the ‘sweet spot’ referred to in Chapter 2 is being identified in most partnership agreements.
Fig 4.6: Decision making in business community partnerships
Survey question: We find when working with business that we rarely have issues in agreeing on:
Source: Centre for Corporate Public Affairs, Survey of NFP organisations 2008. Note: The response categories ‘strongly agree’/‘agree’ and ‘strongly disagree’/’disagree’ are combined in this graph.
Box 4.4 provides the example of the Heart Foundation’s corporate relations guidelines, governing its business sponsorship and alliance relationships.
HEART FOUNDATION CORPORATE RELATIONS GUIDELINES
The National Heart Foundation of Australia’s summary of its corporate guidelines can be found on its website. These guidelines have been developed ‘to guide the initiation, implementation and maintenance of successful relationships’ between the Foundation and business partners. All partnerships require an agreement that takes into account the requirements contained in the guidelines.
The guidelines include:
- definition of commercial relationships (and what is associated with this) and mission-related relationships
- principles for management of commercial relationships that ‘emphasise that the Heart Foundation must benefit from any proposed commercial relationship, should not be exposed to risk through the relationship, and must protect its charitable status’. These principles also ensure that the Foundation only enters into relationships with organisations ‘whose products and positions are consistent and compatible with Heart Foundation policy’
- checklist for assessing potential relationships
- information on use of brand names, certification, and specific programs (such as the ‘Tick’ Food Program).
The guidelines also state that the following issues will be taken into account when assessing a proposed relationship:
- Proposed use of the Heart Foundation name and logo
- Endorsement – this does not generally occur
- Non-exclusivity of relationships where possible and commercially feasible
- Appropriate recognition of commercial sponsors of fundraising events
- Clarification of any licence fees and royalties
- Potential for inclusion of education messages with referral to Heartline and Heart Foundation website
- Mechanisms for protection of confidential information
- Management of the parties’ intellectual property
Source: Heart Foundation 2008.
Chapter summary
- NFPs and businesses in corporate community partnerships believe they can deliver societal outcomes that other institutions or collaborations cannot deliver, or that they can make a unique contribution that neither party, or other entities, can deliver alone
- Most NFPs work with business mainly to secure a funding source (98 per cent), to gain access to skills for capacity building (68 per cent) and for reputation benefits (54 per cent)
- Partnerships most frequently succeed where there is an alignment of values between the NFP organisation and the corporation; when there is a clearly articulated vision and shared mission; agreed measurement and evaluation; good governance and transparency; joint decision-making; open communications; and where there is value being created
- Almost 80 per cent of NFP organisations involved in corporate community partnerships said they work well with business. Almost 70 per cent say their partnerships with business improves what they do. Half of NFPs agree their projects are more successful than if they did not work with business
- NFPs want business to better understand how their sector operates, and the complex relationships they need to manage with stakeholders. Good business understanding is seen by many NFP organisations as the anchor to a successful corporate community partnership