“WE NOW understand it’s about corporate partnerships…That’s the model…and it’s killing us.” Thus did Naomi (“No Logo”) Klein, self-proclaimed champion of the anti-capitalist Occupy movement, recently castigate carbon markets, green incentives and the close ties between companies and charities that have sprung up to support them.
Ms Klein can be relied on to espouse any cause that annoys business. But on this occasion her views coincide with a broader backlash against links between companies and non-governmental organisations (NGOs). Partnerships between the two have become like off-site team-building exercises: they were once slightly exotic, but now no self-respecting firm does without them. A survey of European multinationals and British charities by C&E Advisory Services found that over a third of the firms invest £10m or more in their charitable alliances and almost two-thirds classify the partnerships as “strategic” (whatever that means).
But these are partnerships of opposites. Businesses tend to think they discharge their duty to society by obeying the law. Charities want to do the right thing. Indeed, charities like rights in general: the right to food, the right to clean water, and so on. Businesses think in terms of markets, not rights.
The gap is widening. The share of firms that told C&E they are “very confident” that their partnership with NGOs will meet its aims has fallen by nearly half over the past year. Only 40% of NGOs say partnerships have changed companies’ behaviour for the better—down ten points in a year.
The recent past has dealt several hefty blows to the perceived merits of these links. Most companies sign such deals to seek “the bubble reputation”, as Shakespeare put it: to look good, whether or not the activity is worthwhile. But the millions that BP gave to American environmental NGOs did nothing to stop the company’s good name being dragged through the muck of the Gulf of Mexico. John Browne, BP’s former boss, was even on the board of one of those NGOs—for all the good it did him.
On their side, charities—which are often reluctant partners, since they risk accusations of selling out—feel burned by two occurrences in April this year. One was the failure of the carbon-trading market in Europe. NGOs such as the Environmental Defence Fund are sticking their neck out when they campaign for market mechanisms, because rival greens like Ms Klein think worldwide central planning is the only way to reduce global warming. The debacle at the world’s largest carbon-trading scheme therefore embarrassed all its backers and left responsible NGOs under attack for consorting with Mammon.
The other event was the collapse of the Rana Plaza textile building in Bangladesh. Some of the world’s best-known NGOs have put great efforts into improving the supply chains of big clothing-makers such as Benetton, El Corte Inglés, Primark and Walmart. Factories at Rana Plaza made clothes for all of them. But if the suppliers condoned such deadly working conditions, what was the point of those well-meaning efforts? For a charity, why take all the trouble? Why not just go around to Primark’s flagship store in London—as did War on Want—and shout that the company was to blame for the deaths?
Before concluding that partnerships are valueless, though, it is worth recalling the reasons why they took off in the first place. NGOs help companies reach parts of the market they cannot reach by themselves. In a new book, “Everybody’s Business”, by Jon Miller and Lucy Parker, Duncan Learmouth of GSK, a pharmaceutical firm, argues that “what NGOs bring is an insight into the base of the pyramid, the marginalised populations…That’s an understanding we just don’t have in the business.” Environmental NGOs help companies consolidate their efforts to cut pollution and waste. P&G, the world’s biggest packager of consumer goods, says green groups have helped it save nearly $1 billion through its “sustainability programme” in the past ten years.
NGOs are usually better than companies at attracting and retaining idealistic graduates: partnerships allow a little of the magic to rub off on firms. (Indeed, they can be almost too successful: some corporate-social-responsibility departments are stuffed with people administering the policies they had advocated when they worked for NGOs.) Partnerships cannot save companies from public-relations disasters like BP’s but they can improve relations with regulators: WWF, an environmental charity, helped Coca-Cola defuse a damaging conflict in India which at one point led to the Indian Supreme Court demanding that the company hand over its exact (and still secret) formula.
Even evil capitalists have their uses
For NGOs, too, partnerships with firms have their uses. Companies provide money, which all charities need. They also offer a way of influencing the behaviour of millions. About 1.5 billion people are cultivating and making food around the world. NGOs which want to improve nutrition or reduce food waste cannot hope to affect the behaviour of so many. But roughly 100 companies are involved in selling a quarter of the world’s food. Changing the standards they apply could have a greater impact than the charities would ever achieve on their own.
All that said, the benefits of partnerships will never be uniform, smooth or even very satisfying. Some alliances are well designed; many are not. Some firms are committed to the idea; some are not. And NGOs are like companies themselves: they seek market share; they compete for contributions. Some, like WWF, want to engage with businesses. Others, like Greenpeace, do not. And a few, like Oxfam, want both—slamming companies one minute, advising them the next. Partnerships are messy and patchy. But on balance they are forces for good.