Companies are finding that partnering with NGOs, governments and even their competitors can improve the effectiveness of their community spending worldwide

Companies will always draw heavily on internal expertise to deliver community investment programmes. But in some instances there are clear advantages to partnering with other organisations. Forming partnerships goes far beyond simply sponsoring a charity; it involves the creation of new activities to which the company can contribute and add value.

In the past, companies would support a single global charity, such as Unicef or Save the Children, through large regular donations, forming the central pillar of their community investment activity.

As community investment aligns itself more closely with corporate objectives and companies become clearer about what they wish to achieve from their community investment, this model is looking outdated.

First, a company chooses an issue. Then it builds appropriate partnerships. For companies with global presence, single charity partnerships often do not make sense from a practical perspective. BP corporate responsibility director Sheldon Daniel explains: “For a multinational with a diverse geographic portfolio, it’s hard to have global partnerships which would be able to meet needs in such a variety of operating environments.”

In some instances, a company will choose to work with multiple charity partners in a single region. Social issues are often best addressed through collaboration, rather than competition. Vodafone UK Foundation head Sarah Shillito says: “Now we say to charities you have to choose who else you’re going to work with when you make a proposal to us. We think it’s a good way of creating a deeper learning experience.”

Partnerships last longer

Companies are increasingly building partnerships for the long term, recognising that this allows charities to budget and plan for the future. There are also business benefits to developing longer-term relationships, given how long it can take to build internal and external awareness of such partnerships. Changing partners annually is not an effective way to send a clear message about what you are doing.

The companies surveyed for this study tend to establish partnerships for at least three years. Some go much further. Royal Bank of Scotland head of community investment Stephen Moir describes the partnerships formed to deliver the bank’s financial inclusion programmes as “generational commitments”. He says: “Our experience has shown that things like skills transfer and building the capacity of an organisation take much longer than three years. We will support them for an undetermined period, until such a point as it stops being sensible and we undertake another strategic review.”

Microsoft similarly has no set rules about the lifespan of partnerships and many have continued for more than 10 years. Ensuring that the objectives of a partnership stay fresh and relevant, whatever its lifespan, is most important, the company says.

Public sector partnerships

Tackling social issues through community investment increasingly means partnering with public sector organisations as well as traditional charity partners. These relationships reflect a growing willingness from both governments and companies to work together to achieve specific aims.

Working with a public or governmental body lends extra credibility to a company’s activity and helps it develop closer links with other organisations. It can also be more efficient, as it ensures companies are not duplicating work being done by governments.

For its Children’s Safe Drinking Water initiative, Procter & Gamble has worked with the US Centers for Disease Control and Prevention to develop low-cost technology for water purification sachets for use in developing countries. It now works to deliver this technology with a coalition of charities, with substantial support from the US Agency for International Development.

Both IBM and Microsoft run a number of global programmes to bring IT skills to children. The companies’ primary partnerships are with the ministry of education or regional governments in each country. BP often works with government agencies to encourage enterprise – for example, collaborating with the UN Development Programme to train local people in Indonesia, home of its Tangguh gas project. And Microsoft’s work on employability is designed to feed directly into the EU’s Lisbon agenda with its aim to promote a more inclusive knowledge economy.

Rivals together

One of the most interesting developments in community investment is the growing number of business-to-business partnerships that are being formed to deliver community investment goals.

Microsoft has always been well aware of the limitations of what it can provide, and has a long history of encouraging its partners and other businesses to work with it on community initiatives. “We know very well that we’re a software company and that we bring certain competencies to the table, but not all of them,” says Sylvie Laffarge, community affairs director for Europe, the Middle East and Africa.

A good illustration is Microsoft’s work in Europe with the Employability Alliance. This is a public-private initiative by Microsoft with partners including Cisco Systems, Randstad and State Street. These companies agreed that it makes sense for them to work together on building employability skills. The alliance’s aim is to provide 20 million Europeans with access to technology, content, certification and training in computer technology and other skills by 2010.

Microsoft also partners with other businesses to donate various products. TechSoup is an organisation that provides a one-stop-shop for non-profit groups looking for technology donations, and gives businesses a platform for making donations. This is much more efficient than individual companies running their own programmes and non-profits and charities applying to each one for donations. Microsoft has been instrumental in setting up and supporting TechSoup’s international expansion through local NGO partners in collaboration with Microsoft subsidiaries and other industry partners.

Technology is one of the more obvious candidates for this kind of partnership, since each company will be able to provide part of the solution: software, hardware or training skills. But this is not the only industry where partnerships of this type are emerging. Very different companies may find synergies in their areas of interest. Vodafone UK is working on developing a mentoring project for former prisoners, which involves several other high profile companies from different industries. Shillito says: “It’s a really important message to convey if we’re trying to encourage charities to work together with their competitors – we should be doing the same thing.”

Companies acknowledge that this development brings a number of challenges. It can be hard to find initiatives that fit equally well with the objectives of different businesses. There may also be concerns about losing distinctiveness. When reputation is a key driver of community investment, companies may be unwilling to risk what could be a key differentiator for their brand.

Client collaboration

Working with suppliers and clients is another option for creating business-to-business partnerships. This has been a route for IBM, which found that its clients were increasingly looking for opportunities to collaborate on community investment programmes. An example is KidSmart, an IBM programme that makes computers loaded with educational software available to preschool children. IBM has run joint team events with clients to install the computers at local kindergartens.

Microsoft regularly invites its business partners to provide inputs appropriate to a particular initiative. For example in working with Junior Achievement, a youth skills organisation in Latvia, it was able to engage a local web-hosting firm to host a web services portal for the organisation.

Some of the most exciting developments in community investment are happening in this area of partnerships as varied expertise is brought together in new ways. The examples here are set to be replicated as companies see the benefits of delivering their community investment plans through partnerships with the non-profit, public and private sectors.

Vodafone: flagship NGO partnerships

Microsoft: extending access to IT