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Building back better – charities collaborating with business

There is much scope for charities to work more closely with business for mutual benefit, going beyond the provision of traditional CSR support, in order to address big problems facing all of us.

The latest annual survey commissioned by the Charity Commission found that trust in charities had increased: the past 18 months have concentrated attention on how certain national institutions and prominent organisations have responded positively in a time of crisis. The climate emergency, the pandemic and the movement for racial justice have intensified pressure for change. There is much talk of building back better.

But, whilst demand for support from charities has increased, they have fewer resources with which to meet such demand. As such, they need to continue to adapt, as they always have done -  to advance their charitable purposes. One thing is clear, they cannot do their work alone.

There are many examples of excellent collaboration between charities. Last year Girlguiding teamed up with Children in Need to launch a fundraising challenge to mark Pudsey’s 40th year.

And there is increasing awareness of the importance of co-designing to ensure users’ needs are at the heart of the work charities do. But there is also need for co-creation at another level – with business.

There is no monopoly on doing good

The C&E Corporate-NGO Partnerships Barometer 2021 has surveyed business and NGO leaders and found that cross-sector partnerships are likely to become even more important over the next three years. The pandemic has accelerated action on environmental, social, and governance issues – and greater investment into partnerships is planned to address complex issues.

In a report ‘Divides and Dividends: Leadership Actions for a More Sustainable Future’ Russell Reynolds Associates (RRA) point out that businesses which understand that their stakeholders — employees, customers, shareholders, regulators and communities at large —expect them to play their part in helping solve the world’s challenges will be better positioned for growth and be more competitive.

Shareholders are making sustainability a criterion for investment; consumers want to buy sustainable products and services; top talent want to work for companies that have a clear purpose and address inequities; and regulators will increasingly reward sustainable business practices.

There is much talk of sustainability and many organisations have been quick to promote their sustainability credentials. But rhetoric does not always equal action, and in a second report, ‘What if they really mean it?’ RRA set out to analyse the challenges and opportunities for effective corporate-social sector partnerships. On the basis of evidence taken from expert leaders, RRA conclude that meeting the vital aims of the United Nations’ Sustainable Development Goals (SDGs) by 2030 will require greater cooperation and collaboration between the commercial and social impact sectors (including charities).

How can charities and business achieve a win-win?

To fully realise the benefits of such partnerships, organisations and leaders from both sides must go beyond the traditional philanthropic model and identify what each can contribute.

RRA identify three magic ingredients for such partnerships to work:

  • clear understanding of the value proposition for both parties;
  • complementary capabilities that combine the distinct strengths of each partner;
  • organisational culture that recognises the value of corporate-social sector partnerships. 

All parties need to recognise the value that they bring, but also to understand how collaboration helps generate additional value. COVAX is an example of governments, global health organisations, manufacturers, scientists, private sector, civil society and philanthropy, working together to procure and deliver two billion doses of COVID-19 vaccine to low and middle income countries in 2021.

Whilst valuing their own contribution, each party must recognise and capitalise on the strengths of their partners. For example, the private sector can offer digital innovation, supply chain models and customer intimacy and market insights, while the social sector provides understanding of needs of communities on the ground and credibility and trust to deliver social value. And, any effective partnership is based on trust between equals, a willingness on each “side” to step out of their comfort zone and perhaps to cast off some misconceptions.

RRA highlight that many companies have demonstrated a genuine commitment to achieving social change, not in spite of, but because of their profit motivation, and describe a so-called ‘pragmatic-idealist’ mindset.

And this leads on to the idea of system leadership, requiring people with very different viewpoints to combine their capacities in a co-ordinated way to achieve a shared goal, going beyond the boundaries of their own organisation’s needs. This is already articulated in the Charity Commission’s Essential Trustee CC3 guidance, highlighting that the duty of trustees is always doing what they decide will best enable their charity to carry out its purposes, both now and for the future and is not about serving the charity as an institution in itself, or preserving it for its own sake.

This is important because problems like climate change, destruction of ecosystems, growing scarcity of water, youth unemployment, and embedded poverty and inequity require unprecedented collaboration among different organisations, sectors, and even countries.

The Stanford Social Innovation Review (Review) points out that continuing to do what we are currently doing but doing it harder or smarter is not likely to produce very different outcomes. Real change starts with recognising that we are part of the systems we seek to change.

The Review highlighted by way of example the Sustainable Food Lab. With Oxfam, Unilever, and the Kellogg Foundation as initial conveners, a team of 30 senior managers from food businesses and social and environmental NGOs spent time in each other’s organisations and travelled together to see aspects of the food system that were new to them. Corporate executives visited farm co-operatives and social activists saw the operations of multi-national food companies. Today the Lab has become a powerful incubator for collaborative projects, where companies and NGOs learn together how to manage global supply chains for long-term reliability based on the health of farming communities and ecologies.

If charities decide to work more with business what do they have to bear in mind?

Of course there remains a place for charities to continue to seek monetary support from business in return for use of their trusted brands, but there are only so many ‘charity of the year’ opportunities out there. And, if the Sustainable Food Lab can show how business and the social sector can really work together, how does that translate for charities back home?

Whilst being mindful of Charity Commission guidance on trustees managing their charity’s work with non-charities, should trustees start to think about deeper collaboration, based upon the demonstrable value charities can provide to achieve mutual benefit? In doing so, they should not sell their charities short.

For example, companies may be keen for their office staff to participate in a team building activity that might involve tramping around a hospice digging up weeds on a Friday afternoon, but must appreciate the time and expense incurred by the charity in organising its own volunteers to supervise the activity. Yes, the hospice gets a (hopefully) pristine garden, but the company gets an enthused workforce. Surely there is a (monetary) price for the value the charity has provided to the company?

Samaritans is a good example of a charity generating commercial income to help fund its charitable work. It has done so by running training courses helping businesses to improve their communication skills – including imparting its expertise in learning to listen to call centre staff.

So the future of business and social sector collaboration is more than just about fundraising partnerships or cause related marketing (‘10p to Charity XYZ for every widget sold’).

Practicalities

Leaders from business and the charity sector should take opportunities to engage more meaningfully with one another, adopting a ‘pragmatic-idealist’ mindset, moving from reactive problem solving to co-creating solutions.

Charities need to recognise and manage the risks which closer collaboration with business may present. They must continue to operate independently, not further non-charitable purposes, avoid unauthorised personal benefit and address any conflicts of interest that arise.

And where a value proposition is identified, arrangements should be agreed and documented between equals where everyone is clear about their responsibilities and deliverables, and where there are mechanisms to ensure accountability as well as good communication.

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2021.

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