The document discusses trends in corporate social investment and partnerships with NGOs. It outlines how approaches have shifted from traditional philanthropy to more strategic, long-term investments aligned with business objectives. Common reasons for social investment failures include a lack of local context understanding, insufficient community participation, unclear objectives, and failure to ensure sustainability or measure impact. The document provides suggestions for best practices like multi-year funding and common performance metrics to improve partnerships between companies and NGOs.

1. Towards Sustainability
Optimising Corporate Fundraising

2. WHAT’S YOUR
OPINION?
Changing Trends
in Business / NGO
Partnerships

3. Where we came from
• Values driven approach
• Charity/Philanthropic Mind-set
• Responsive to requests
• Transaction based
• Needs Focussed
• Organisational Funding
• Short-Term internal objectives
• Isolated development priorities
• Invisible – behind the scenes
• Cash giving
• Reports only on available
information
• Managerial Function
Current
Paradigm
• Values and Value Created (ROI)
• Investment Mind-set
• Responsive and Proactive
• Relationship Based
• Outcomes Focussed
• Issue Funding
• Long-Term focused
• Aligned and integrated into
business objectives
• Visible and public
• Full value chain integration
• Knowledge based reporting
• Leadership Function
Emerging
Paradigm

4. Progress towards strategic social
investment and development
Traditional
Philanthropy
Donations
Sponsorships
In Kind
Grantmaking
Products,
services, skills,
time,
infrastructure
Social
Entrepreneur-
ship
Financial
resources,
operational
advice &
expertise,
access to
markets (trade)
Strategic
Investments
Aligned with
core business
interests, brand
values,
competencies,
and government
priorities
Systemic Socio
Economic
Development
Collaborative
Partnerships,
influencing
policy,
contributing
advocacy and
high impact
change
Question: Where are you placed on this continuum?

5. Strategic social investment
Align strategic
and
Operational
business and
Brand
imperatives
Measurable
Impact on
Society and
Environment
Align and support
government
Priorities and
Community
needs
Measurable
Impact and
Return
On Investment for
Company /
Community

6. Towards best practice
• Core business? Specialisation?
• Competitive Differentiator?
• Theory/model of change?
• Scientific research data?
• Baseline?
• Indicators?
• Established – M&E and IA?
• Community buy in? Proof of Engagement?
• Partnerships?
• Sustainability – program/community/organisation
• Exit / Continuation Plan
• Feasibility and Viability Study?
• Cost benefit analysis
• Publish best practice?
• Benchmark?
• Publish mistakes/lessons learnt?

7. Outsourcing
• Issue: Relationship between donor and
grantee/intermediary:
• Why do investors/donors outsource?
– To save time and money
– To tap expertise
– To obtain objectivity
– Development is not core business
• What do investors/donors outsource?
– Planning
– Implementation
– Evaluation
• How do investors/donors outsource?
– NGO’s, NPO’s, CBO’s, PBO’s, Consultants,
Contractors

8. Why do social investment Fail? (1)
• Limited understanding of the often complex local context:
– Companies have sometimes commenced social investment initiatives without fully
understanding the socio-cultural context or how their presence and actions can affect the
complex dynamics between and among local community stakeholder groups. This has led to a
range of unintended consequences, including the exacerbation of tensions or creation of conflict
among communities
• Insufficient participation and ownership by local stakeholders:
– Delivery of social/community projects without sufficient involvement of local communities and
local government in decision making around development priorities has resulted in projects with
low relevance to/ and ownership of local stakeholders (and therefore by implication – low
impact).
• A perception of “giving” rather than “investment” (Including lack of clear
objectives):
– The tendency to view social investment as charity, rather than as an investment linked to the
business and operational objectives – has resulted in vague mandates and a lack of direction and
purpose for socio economic development strategies and programs.
• Detachment from the business:
– Social investment programs have tended to be planned and implemented in isolation from
business activities and other day-to-day actions affecting all stakeholders. This has limited social
investment’s effectiveness in helping the company to address key social risks and opportunities
at the site level or to take advantage of business efficiencies and competencies in support of
local communities.

9. Why do social investment Fail? (2)
• Responding to local requests in an ad hoc manner:
– Ad hoc approaches are typically opportunistic and focus on short-term outputs rather than
catalysing long-term change. The risk, in many cases, is that the sum of all these disparate
contributions to local causes does not add up to anything that either the company or host
communities or even government can point to as a tangible or lasting socio economic
development benefit.
• Lack of professionalism and business rigor:
– Few social investment programs are held to the same standards that companies apply to other
business investments they make (in terms of professional rigor, a clear business rationale,
planning and budgeting processes, and accountability for results). This often reflects the low
priority given to social investment by senior management when there is no perceived link or
added value to the company’s bottom line.
• Insufficient focus on sustainability:
– It is only in recent years that the sustainability of social investment activities supported by
companies has become a key factor in project selection and design. In the past, short-term
objectives took priority over longer-term considerations, and sustainable development
principles. Outcomes and criteria were not given much emphasis.
• Provision of free goods and services:
– While well-intended, the consequences of providing free goods and services, or infrastructure
and money for that matter, have not proven to be in the interests of either the company or local
stakeholders. The lack of requirements for matching contributions (whether financial or in-kind)
has made it difficult to generate shared ownership or financial sustainability, and has instead
fostered dependency.

10. Why do social investment Fail? (3)
• No exit or handover strategy:
– Commencing activities without planning in advance for the company’s eventual withdrawal has
rendered many company-supported programs unsustainable and created difficulties for the company
around its “social license to exit” in times of financial cutbacks or project end.
• Overemphasis on infrastructure and under emphasis on skills/capacity building:
– Traditionally, social investment programs have been dominated by company-led, bricks-and-mortar
types of projects (particularly in the mining industry) with a significant lack of investment in the
participatory processes, such as skills building, and organisational development necessary to affect
and maintain long-term change.
• Lack of transparency and clear criteria:
– Unclear criteria have led to numerous cases of conflict between and among communities over who
gets what and why. When transparent criteria are lacking, company practice in distributing benefits
may be perceived as secretive, unpredictable, and susceptible to manipulation.
• Failure to measure and communicate results:
– In many cases the effectiveness of social investment programs is unknown because it has not been
systematically tracked or measured the way most other business activities or expenditures would be.
Common shortcomings include the lack of proper baseline/impact data (i.e. social impact studies)
and a focus on measuring the volume of spend (inputs) or the number of outputs (number of
beneficiaries) rather than the actual quality of the outcomes.

11. NGO Issues with corporate investors
• Lack of information on focus areas,
budgets and strategies
• Delays in disbursements
• Donor driven priorities and systems
• Uncoordinated donor practices
• Short term focus
• Uncertainty about and lack of standard
performance metrics and diagnostic
tools
• Uncertainty about roles and
responsibilities
• Centralized and decentralized decision-
making
• Knowledge about development issues
• Inflexible strategies – share
development know how, best practice,
development models, research
• Help with capacity building, operational
and infrastructure costs

12. Suggestions for best practice
• Share information and research
• Standardize and simplify
procedures
• Be transparent – communicate
and provide information
• Multi-year funding requests and
commitments
• Use common/transparent
performance indicators
• Clear rules for suspension
• Reduce unnecessary admin
burdens
• Consider operational funds and
assistance

13. Changing Trends in Business / NGO
Partnerships
• Opportunities for cross-sector
collaborations are widening
• Companies are becoming increasingly
strategic in their NGO engagement
• Companies increasingly seek global
engagement with local action
• Employee engagement is increasingly a
key driver for collaboration
• Profile, branding and communication
matter
– Source: CHANGING TRENDS IN BUSINESS-
NGO PARTNERSHIPS - A Netherlands
perspective
– By: Maria E. Bobenrieth and Darian Stibbe

14. The Ideal NGO
• Brings clear value propositions
• Collaborates
• Communicates with excellence
• Creates synergy
• Is transparent
• Is strategic
• Is knowledgeable
• Is knowledgeable
• Create profile & network
• Is flexible

15. Contact
• Reana Rossouw
• Next Generation Consultants - Specialists
in Development
• E-mail: rrossouw@nextgeneration.co.za
• Web: www.nextgeneration.co.za