Candid Reflections on How Companies and Donors Collaborate

By Caroline Ashley, Editor of the Practitioner Hub for Inclusive Business

Candid Reflections on How Companies and Donors Collaborate

Are you already collaborating in a business-donor partnership, seeking one, or nursing bruises from one? Such collaborations are increasingly common, but it’s rare that we hear candid views from businesses and donor programmes alike, on what worked, what didn’t, and what tips they can offer others.

This month on the Practitioner Hub for Inclusive Business, in partnership with the Business Innovation Facility, we asked donors and businesses what their experiences of working in collaboration are. They shared scores of examples from years of experience with us. Their answers made me smile, made me wince, they speak truth to hype, but with practical suggestion and optimism too.

Let’s be honest. Business-donor partnerships are tough. Probably tougher than anyone expects at first. The challenges shared by our contributors range from misaligned expectations, to contractual clauses and jargon. To highlight just a few:

  • donor money can be the ‘tail that wags the dog’. Drawing on a decade with Cadbury, Kraft & SABMiller, Anna Swaithes warns that ‘A partnership built around shared objectives will succeed- a programme designed around donor objectives to win funding will not.’
  • development practitioners just don’t get it, warns a businessman, who has suffered mistrust and misunderstanding of the private sector’s need to turn a profit. If his acronym for development programmes, international NGOs and local NGOs sounds a little pejorative – DINGO – that fits with the theme. If you’re a DINGO, don’t be offended, just read and learn what it feels like from the business side here.
  • ironically, a problem that donors find is getting past the CSR door or social impact discussion. Kerry Conway from DFID meets surprise that his mission is to partner on commercial business. In the Girls Education Challenge Fund, partnerships aim specifically to expand access to education for marginalised girls, but Asyia Kazmi acknowledges it is hard to engage core business departments, not just CSR in this goal. She warns against fitting business into donor jargon.
  • for all these reasons above, finding the right fit partner for the challenge, and solution, is no easy task.
  • practical problems abound: Strategy Officer for Advanced Chemical Industries (ACI), Saifullah Shovon explains how hard it is for businesses to apply for donor money. Cristina Bortes draws on several years running the Business Innovation Facility to highlight how one person moving on, or contractual details and Intellectual Property – can derail plans.

It’s not surprising then that some donor-business partnerships work and some fail. A new Insider report, ‘How can companies and market systems programmes engage effectively?’ launched this month, draws on 10 partnerships pursed by the Business Innovation Facility (BIF), some of which stalled and some progressed. The report, is a welcome insight into how the complex ambitious thinking of a donor ‘market systems’ programme translates into actual company collaboration, with top tips for both donors and business.

Be clear on strategy – your own and your partners – is a top tip. Greater clarity on why and how donors want to engage with business is important for a business readership. So, if you’re feeling confused about the donor strategies for company collaboration, learn more from DFID’s Kerry Conway, who explains what is it that donors look for. DFID wants to work with firms on their core business, not their CSR, and it aims to influence the many (the ‘market’) by working with one or a few. Sometimes the choice of how donors partner can seem baffling from outside. Harry Aldwinckle from BIF outlines five key issues that shape donor decisions about which business initiatives to engage when working with multinationals. Different drivers can lead donors to engage with social enterprises, as explored in an Overseas Development Institute (ODI) report, which makes our Editor’s Choice. A key take-way here is that donor programmes have somewhat different objectives for their engagement with companies, and it is important not to assume they are all the same.

So what does collaboration look like in practice and what makes it work better? I want to highlight 5 top tips emerging from this series. Each sounds obvious once it’s written down, but we know that they are not all put into practice.

1. Finding alignment and walking away from a partnership in which a donor programme and a business cannot actually serve their respective interests through a common initiative. As Anna Swaithes explains why Cadbury turned down a hefty donor sum, noting that a clear shared purpose is the pre-requisite for success: ‘The best examples of collaboration that I have seen have come about following a reasonable period of strategic discussion between donor(s) and business(es) before any money came into play.’

2. Investing in ‘relationship health‘ as USAID call it. In D.C., last week, I noticed how good USAID seem to be at reflecting on their practice and drawing lessons (at least in the Innovation department I was with). It’s interesting that they have reviewed their experience with the private sector to date, and decided to put more priority on building trust, ensuring communication, and appointing relationship managers who are ‘problem solvers’ so as to improve delivery and impact.

3. Use simple tools to diagnose partnership potential and then to develop the agreement.

  • Soji Apampa introduces a useful 2×2 matrix, mapping ‘will and skill’ of both donor and company. Where both is high, partnership potential is high. Where the company has more will and skill, the risk is donor exploitation, and where the company has less, the risk is donor dependency [here].
  • His colleague in BIF, Cristina Bortes, takes this further distinguishing the will factor (commitment) from skill (capacity). Where the company has will but lacks skill, a donor programme can focus on capacity. Where the company has skills but lacks will, focus on inspiring them but not investing yet.
  • The Hub has launched two Checklists with The Partnering Initiative recently. Our new one on ‘go/no-go’ decisions, launched this month provides 8 key issues to ‘tick off’ when making a final decision whether to proceed with a partnership. If you decide to go, the ‘Partnering Agreement’ Checklist provides four steps for working out an MOU or contract together.

4. Constantly learn about the little things that constrain then innovate and adapt. Small things can make a big difference. Bangladeshi conglomerate ACI has found that donor partnerships help the business take more risk and extend into new markets. So big picture, they are significant for the company. But the specific challenge of writing applications or proposals is a blockage. So, Practical Action and ACI have evolved a practical solution together.

5. Don’t assume a donor business collaboration is merely common sense. It takes work, so learn from experience of others. The experience of 3 years of BIF partnering is shared in 6 top tips each for market systems programmes and for the companies that seek to partner with such programmes.

So what made me wince? The frustration of our business author from southern Africa, who has seen mistrust, misunderstanding of how business works and thus a waste of development resource. What made me smile? ACI’s explanation of how their core business has extended thanks to several donor partnerships. And Tom Harrison’s depiction of 3 types of conversations he and others have so often experienced between an entrepreneur and a development practitioner.

In one, the vision of collaboration clicks, but in the other two, the conversationalists are baffled by ‘development speak’ or the entrepreneurs thinks that all the donor folk want to hear is social impact, and nothing commercial. I hope the set of insights and tools shared by many practitioners this month will help anyone to get a better sense of where partners come from and how to find the aligned middle ground.

Editor’s Note:

This blog has been adapted from an article published on the Practitioner Hub for Inclusive Business. To read the full series on donor-business collaboration from the Practitioner Hub for Inclusive Business click here. The series also includes a new ‘Insider’ report on lessons from company-donor collaboration and a new Checklist on partnering.

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