Class 10-Role of NGOs/Social

Enterprises and Government

Dr. M.K.Satish
Drivers for Business-NGO partnerships
 Traditionally, the relationship between businesses and NGOs has been characterised by
mistrust and conflict

 Sometimes collaboration between businesses and NGOs is even initiated as a result of an

open or anticipated conflict

 Recently, however, more and more scholars and practitioners have argued that business–NGO
partnerships can generate positive impacts for both business and society

 International agreements play an important role in endorsing crosssector collaboration

 Today businesses and NGOs need each other and that no single actor can solve all societal
problems alone

 Today, NGOs have grown in number, power and influence and have become institutional
actors in line with public and private-sector actors

 From the corporate standpoint, stakeholder expectations on corporate social investment are
on the rise, and collaborating with NGOs is a straightforward way for companies to fulfil their
social obligations
Business
Businesses tend to work with local and national NGOs in relation to
 Philanthropic donations that have direct impact on poverty alleviation or
environmental impact
 Implementation programmes that position company well with local
communities
 Demonstration projects that will build government relationships and greater
license to operate
Business tend to prefer to work with international NGOs in relation to
 Emergency relief and crisis or post-conflict situations
 Strategic approach to global issues
 Programmes designed to meet significant scale
Benefits in partnering with NGO
 Building greater employee motivation, loyalty and productivity from working for a
company that they believe to be acting responsibly and one which takes employee
well-being seriously
 Strengthening stakeholder relationships
 Giving a stronger licence to operate
 Providing opportunities for positive brand, differentiation, market development and
new product/service development
 Better understanding of development issues from the not-for-profit sector
perspective which leads to organizational learning and system change
Drivers for Business-NGO partnerships
 Consequently, NGOs have been driven towards partnerships with the private
sector in order to meet demands for improved efficiency and accountability
 To create new funding opportunities and to implement social and environmental
improvements
Summary- Why Cross Sector Partnership
Major companies and NGOs doing cross
sector partnership
BUSINESS

 BP, Eureka Forbes, HSBC, J&J, Microsoft, Nike, Nokia, Rio Tinto, Shell,
Uniliver,Vodafone

GLOBAL NGOS

 Care International, Earthwatch, Mercy Corps, Oxfam and WWF

INTERNATIONAL AGENCIES

 GTZ, USAID, DFID, World Bank, UN

LOCAL NGOS
Example- WWF and Coca Cola
 Coca Cola Company and WWF seek to drive awareness and action to address water
challenges
 One of the partnership goals is to improve Coca-Cola’s water efficiency and reduce its carbon
emissions from manufacturing operations
 WWF’s key competences within water and energy efficiency have allowed Coca-Cola to
reduce water consumption by over 2%, while its sales volume has increased by more than
21%
 This reduction in water consumption adds to WWF’s mission of conserving and protecting
freshwater resources by setting industry standards
 Furthermore, WWF has received funds from Coca- Cola earmarked for conserving seven key
freshwater basins worldwide, and WWF also utilises the partnership as a platform for
leveraging global movement to address water challenges
 The partners together seek to generate value for each other by tapping into one another’s
resources and key competences
Different forms
Philanthropy
 Form of cash or gifts in kind-donations from
companies or employees
 Improve image and strengthen social license to
operate
Social investments
 More strategic approach- eg. Proving skills,
community development programmes, cause-
related marketing, targeted education
programmes that are aligned to company’s
principal business
New commercial initiatives
 Aligned with company’s core business then to
focus on developing new markets, products and
services- which are many times targeted at low
income households.
Core Business
 Strengthening the social and environmental
sustainability of current operations
 Complying with regulations to improving
performance of global operations
Example: Toms Group and IBIS
 Danish Confectionary company- Toms Group and IBIS a Danish developmental NGO
 In 2005, Toms Group experienced critical exposure in the Danish media regarding its
suppliers use of child labour in Ghana
 Partnership with IBIS. IBIS had expertise in the education area in Africa. Together they
identified a need for better education of children in cocoa growing areas of Ghana
 IBIS started working with teachers in cocoa producing areas in order to motivate
parents to send their children to school instead of work
 Instead of switching suppliers in the crisis, Toms Group turned the challenges they
were facing into opportunities by engaging in the well-being of people in the Ghanian
cocoa value chain
 Toms Group benefitted with IBIS’s legitimacy when communicating how the company
dealt with child labour abuse in Ghana
 IBIS on the other hand, furthered its advocacy and information work regarding child
labour issues and improved quality of primary school education in Ghana
 In 2012, they launched a plan for extending the scope of partnership to include issues
of traceability in the cocoa value chain and development of new farming techniques
Motives for partnerships
Partnership Type
 Low engagement, arm’s length (e.g. traditional philanthropy or cause related marketing)
 Deep-engagement partnerships (e.g. joint ventures)
Characteristics of partnerships
Pilot Projects/short term arrangements
 With the intention of handling over some or all of the programme to the public sector for
long-term delivery or finding other ways to sustain the delivery or outcomes outside the
partnerships

Tri-partite arrangements
 Including the public sector from the beginning/at an early stage

Commercial or income generating

 Models of partnerships that will be sustainable without continued corporate investment

Strategic influence
 Aiming at infrastructure development, developing the enabling environment and/or system
change
NGO Engagement with the corporate sector

CONFRONTATION • Lawsuits, litigation

• Media and other campaign targeting at reputation of
companies
• Shareholder resolutions

COMMUNICATION • Regular reporting

• Site visits for NGOs and community leaders
• Research studies by NGOs

CONSULTATION • Community or project-level consultation structures

• Strategic, industry-wide consultation mechanisms

COOPERATION • Strategic philanthropy and community investment

initiatives
• Initiatives that harness core competency of both parties
Partnership Types
Partnership Types
Partnership Types
Partnership Types
Partnership Types
Partnership Characteristics
Main barriers for partnerships
BUSINESS ABOUT BARRIERS
 Conflict of interest and strategic orientation
 Lack of common expectations for the partnership
 Lack of communication and unclear context and expectations
 Limited project management, administrative and financial skills at partner
institutions
 Organizational challenges, embedding partnerships into the core business
 Understanding and recognition of very different positions/roles
 Lack of knowledge about NGO culture and mid set and vice-versa
 Speed in developing and executing partnerships
Main barriers for partnerships
NGOS ABOUT BARRIERS
 Time and resource to activate the partnership from both sides
 What’s in it for me- difficult for business partners to see the value
 Difficult to understand the special NGO mind set
 Companies do often have a short-term strategy in this area and focus only on
increasing the PR value
 It is a new area of operation. We are struggling to find our role and to harmonize it
with money making thinking
 They don’t understand the third world circumstances, work environment and
limited resources of NGOs and likewise, we probably don’t understand them
Measurements for partnership
Partnership Myths and Truths
Case Studies
 Mission Mangalam
Inclusive Development through Social Business Enterprises
Market Survey
Strategy of Integrated Approach Linkage with
involving Corporates Domestic/ Foreign Product Design
Markets

Strategic partnership between industries and

Buy-Back SHG / Producer
Sakhi Madals, where industries can Group
Guarantee /
rearchitecture their production process into Market Options Identification
decentralized Micro Enterprise Ventures
which will be owned & operated by Sakhi
Mandals. Ensuring Quality Imparting of Skill
Standards Training

Managing the
Production Financial Linkages
Activity

360 Degree PPP Model

Integrating SHGs into the corporate value chain would act as a 360 degree PPP model
► National & state schemes with capital & interest subsidies & training linkages- Support from Govt
► Preparation of project proposal, skill training content, forward & backward linkages and quality control
responsibility of the industry
 How the model works-Responsibility Matrix

Identification/ Raw materials Production Sales & marketing

Quality control
Training supply chain Value chain Value chain

Organize themselves QC with the requisite Scientific production Adherence to QC Packaging and labeling
training techniques standards QC
SHG/NGO
Logistics and time Receipt and stocking High product quality Incorporating local Offer their brand for
commitment conditions into QC value enhancement

Funds for Training Incentives for SHG Funds at affordable Incentivize large Incentivize scientific
raw materials costs for Tech grade scale QC supply chains
Government
Assisting in Incentivize Assist in organizing Delegations for Build SHGs as a brand
integrating production and w/h Tech. upgradation knowledge sharing

Training needs Procurement and Organize production Design , Implement National/Intl market
aligned to market transportation value chain and Audit QC links
Corporate
Training modules Inventory Upgrade production Continuously Capture value from the
and trainers management value chain upgrade QC SHG brand ‘Stree Shakti’
Case Studies

Rearchitecturing: Corporate have Accelerating: an existing process &

Approaches new architecture that integrates SHGs in system accelerated maniforld
their value chain

Rearchitecturing; Arvind Limited

Arvind Limited Garment Stiching Unit Unit in a rural unused building

25 sewing machines (25 tailors and 25

Quality control by Arvind
support staff)

Capital support under SGSY scheme

Tailoring training by Arvind
for buying sewing machines

Quality based buy-back guarantee by

Arvind
Case Studies
CoC act as intermediary
Operates through Community CoC are owned by communities
Accelerating:

between Fabindia and rural

owned Company (CoC) model (min 26% shareholding)
Fabindia

producers

CoC brings local crafts of the Different artisans involved in Price for product produced and
region different stages of production share in profits of the company

Fabindia
(Approval of
designs)
125 stores
Fabric
Warehouse
Supplier

Fabindia Overseas
Pvt Ltd CoC
Stitching
Printing Unit
Unit

Cutting Unit
 Aadhar Mangalam
Aadhar Mangalam
• Sustainable Business Models by building strategic
partnership with Self Help Groups- Create Self
Employment-Set Small Scale Retail Shops
• Store Size-300 sq.ft, 500 sq.ft & 800 sq. ft. SHG
identifies place in a village & starts shop
• Sakhi Mandal, Groups of Women, Single Women
Entrepreneur
Training
Future Group to provide training
• In-depth Retail Knowledge – Stock
handling/damaging handling/replenish/shrinkage
• Soft skills training for better customer interaction
Selling of Retail Products:
• Future Group will decide the mix and assortment
of stocks for every store.
Stores as Sourcing Hubs for products
• Sourcing of products from rural areas (in store
localities) to urban Future Group Stores
 Aadhar Mangalam
Type 1 Type 2 Type 3
Size of Store in sq ft 300 500 800
Total Investment (incl 4,66,800 7,10,000 10,60,000
average inventory)
Sales (Yearly) 28,80,000 44,84,250 71,74,800
Store Monthly Earning 9,354 12,160 23,799
(post interest servicing)

• Future Group is currently in

the process of finalizing
locations to start Mangalam
Bazaars.

• Pilot Sites-Kalol & Mehsana

Product Mix 300 sq ft store

Thank You