Relationships with not-for-profit organisations
This chapter provides insights on development and potential changes in the management of the corporate relationships with not-for-profit organisations, and the day-to-day aspects of the relationship, including communication and personal interactions.
The extent to which companies have changed the way they manage relationships with their NFP partners depends not only on the strategic decisions and approach analysed in the previous chapters, but also the resources made available to public affairs teams managing community investment strategy and budgets.
For companies that have experienced budget and staff cuts, the challenge is greater to maintain focus when managing relationships. These companies are also more demanding of their partners.
We have become tougher towards our NFP partners, and have been asking questions we haven't asked before. We are asking for them to step up and deliver, and want them to demonstrate the value of the relationship and its benefits. We are also toughening a bit on renewals.
We are asking more questions now, because we want to justify our investment.
4.1 Effect of staff cuts
Participants in the focus groups highlighted some challenges related to having less staff in their departments to steward corporate community investments, and how that affects managing relationships with their NFP partners:
We've had pressure on headcount, so had to reassign responsibilities. There's pressure from global head office to resource different areas, so in effect, we received a cut in half a head.
Staff reductions will have an impact on community business partnerships. For example, local partnerships are down. Due to communications cut, it will be hard to do partnerships properly. I was full time social investment and now I have several different areas, so less time to talk to community partners. Almost a sense of going backwards to a transactional model of giving. If you get rid of resources to manage partnerships then you will see an increased trend toward transactional giving. Already we have a small number of large partnerships rather than several smaller partnerships.
Three years ago I was employed just to do community partnerships, now half my time is in other areas of public affairs. This affects closeness of relationships with NFP partners.
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4.2 Approach to measurement and reporting
A significant number of companies are seeking to better measure outcomes and evaluate the impact of their community investment. Forty-four per cent are currently reviewing measurement and evaluation frameworks, while 43 per cent report no change (see Figure 4.1).
Figure 4.1:Changes in approach to better measure outcomes and evaluate impact of community investment programs 
Source: Centre for Corporate Public Affairs, Survey of business executives 2009. N=44.
Several companies participating in the online survey note their community investment measurement and evaluation framework has been reviewed, and this did not necessarily relate to the economic downturn, but was part of an ongoing improvement process. Some companies are also reviewing frameworks because of management changes.
Measurement and reporting has always been a challenging part of managing partnerships, especially in relation to the evaluation of outcomes and investment.
As noted above, there is a growing and deep need to direct corporate resources to social and community needs that can be justified in terms of their efficacy in meeting community objectives, and value in meeting corporate objectives. The scarcer the corporate resource, the more this is the case.
As well as survey respondents, companies participating in the focus groups note an increased shift requiring more accountability for community investment. This was confirmed as a general trend, not just attributable to the downturn.
As one participant notes:
The challenge for the area is to measure real social impact, and if there is a pinch and a squeeze, it becomes more at risk.
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4.3 Managing the relationship
Communication, trust and understanding remain strong between businesses and their community partners, despite the economic downturn.
As Figure 4.2 illustrates, companies surveyed overwhelmingly agree that corporations and NFP organisations understand the challenges faced by the other partner.
Companies are mostly 'neutral' on whether the priorities of their community partners are changing.
Sixty-three per cent of companies agree that there is more communication with their community partners. Sixty per cent agree that they are working closely with their partners to manage uncertainties.
The majority (60 per cent) disagree that they have lost important contacts in their community partners.
Companies disagree that their partners are not placing more demands on them, or that there are more partnership issues that need to be dealt with. Seventy-eight per cent of survey respondents also disagree that there is less trust.
There is now more focus on achievement of societal outcomes, according to more than half of the companies we surveyed.
Figure 4.2: Statements on Relationships with NFP Partners 
Source: Centre for Corporate Public Affairs, Survey of business executives 2009. N=48.
The qualitative research confirms the survey results that trust and mutual support in company/NFP partnerships have not been damaged by the economic downturn. While there were fewer corporate resources available to maintain desired levels of contact, companies reported considerable discussion of concerns, especially about future funding, between them and existing, close NFP partners.
Companies reported that a number of their community partners were experiencing some economic and capacity stress, and were expecting circumstances to worsen, over the next 12 months. As previously discussed, companies have mostly continued their support, albeit delayed or reduced in some cases. Despite this, focus group participants acknowledge that some of their NFP partners are concerned about what will happen when agreements are rolled over in the next few years.
4.4 Factors for sustainable partnerships
Companies participating in our research identified a number of factors that ensure a sustainable partnership with NFP organisations.
Most companies highlight the importance of regular contact and good communication. They also note the importance of setting clear goals early. These goals are more likely to be sustainable if they align with company and NFP strategic objectives.
Companies in the survey highlighted the importance of measuring outcomes and reporting, so that each organisation understands the progress and value of the partnership.
Box 4.1 illustrates some comments from survey participants about partnership sustainability.
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Box 4.2
How do you ensure your current relationships with not-for-profit community partners are sustainable?
Regular meaningful consultation and engagement. Development of agreed strategic directions.
Liaise regularly with our partners to understand their needs.
Increased reporting and contact with NFP partners to ensure direction of partnership is to agreed outcomes.
Ensuring from the commencement of the partnership that expectations, timelines and benefits are documented and achievable.
Evaluate programs to fit with our strategy.
Continual review and planning of processes, outcomes and status.
Ensuring there are explicit benefits for both the business and NFP.
Ensure there are activities that are aligned to our business or brand.
Ensure outcomes are measurable and we receive adequate reporting on progress.
Work on building personal relationships but also ensure programs are documented with clearly articulated and agreed goals, objectives and key performance indicators.
By being transparent and delivering what we promise.
Flexible arrangements to adapt to changing business priorities.
Honest communication.
Source: Centre for Corporate Public Affairs, Survey of business executives 2009.
Focus group and interview participants, preferred to focus on longer-term structural issues in relationships. They note, as does the AbaF report cited earlier, that relationships are less vulnerable if they are based on long-term strategic alignment, and more vulnerable if they are based on short term or ad hoc tactical considerations.
On the basis of broader enquiry, and indications from this study, large corporations are seeking to get more value from their relationships.
They have typically structured their community investments into fewer deeper relationships, underpinned by longer-term agreements (typically 3 years minimum). Some have moved to smooth out their community investment spending to enable more sustainable relationships in general and to assist in planning through business cycles.
The companies studied for this report are more likely to be maintaining their relationships and levels of community support compared to small and medium enterprises.
While these trends will tend to benefit larger charities and other NFPs, including community organisations in the neighbourhood of major company facilities, there are negative consequences for others.
They include smaller or less sophisticated NFP organisations that may not be able to satisfy corporate accountability demands, or operate in sectors that are less attractive for corporations seeking alignment with strategy.