Atlas: Strategic Corporate-NGO Partnerships: opportunities and Challenges for striking a Symbiotic Relationship by M S Moodithaya

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ISTR Sixth International Conference
Toronto, Canada / July 11-14, 2004
Contesting Citizenship and Civil Society in a Divided World

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Strategic Corporate-NGO Partnerships: opportunities and Challenges for striking a Symbiotic Relationship
by
M S Moodithaya
Director, Justice K S Hegde Institute of Management, Nitte

This paper seeks to shed light on the issues concerning the development of a symbiotic relationship between the corporates and non-Governmental Organisations (NGOs) in the Indian context. The study recognizes the fact that due to the slow pace of poverty reduction and a backlog of social deprivation, the pressure on the NGOs to participate in social development in India is ever on the increase. As the population of the country crossed the one billion mark at the beginning of this century, despite the State initiated development plans, nearly 34.7 percent of the people are still living below the poverty line and adult illiteracy is as high as 43 per cent. Only 52 percent of the families live in houses with permanent walls and roof and for 39 percent of the families a house is one bedroom. Only 56 percent of the houses are electrified and just 38 percent get water at home. Addressing these issues of poverty, health, hunger, housing, social exclusion and so on are not just the concerns of State or NGOs. With the shrinking financial resources of the State and the inability of the NGOs to mobilize enough resources on their own, the ‘corporate citizens’ are also required to step in. However, since the for profit corporate sector generally believes that its main social responsibility is to make profits, there is the need for making it understand the benefits of philanthropy, including, through a partnership with the NGOs.

Corporate-NGO partnerships are capable of enhancing the efficacy of the social development initiatives of both. While the NGOs can gain from the corporate sector’s organizational, financial and professional resources, the corporates can use the expertise of NGOs in working on social causes. But the corporates would show interest in striking such a partnership only when they are convinced about the benefits such partnerships could bring in. As the corporate sector is increasingly under pressure to maximize owners’ economic welfare, the non-profit sector can hope to strike a symbiotic relationship in social development only by convincing that it makes ‘business sense’ to have ‘social sense’. As the corporate sector talks about strategic philanthropy, the NGOs must also learn to strike strategic partnerships with out causing a goal conflict. Being the country with the highest number of public companies in the whole world and a fairly good history of business philanthropy, such a symbiotic relationship would bring in competitive advantages to both.

This paper discusses the issues concerning strategic Corporate- NGO partnerships in the Indian context. Few successful cases of ‘partnering’ are used in this study to identify the benefits of the partnership and the inherent problems in striking such a symbiotic relationship. The study draws on in-depth interviews with selected executives of companies and NGOs; observational data; and documents. The study suggests that at a time when corporate executives are caught between the critics demanding increasing levels of corporate social responsibilities and investors applying relentless pressure to maximize short-term profits, strategic philanthropy can help the corporates to do both business and charity well. If the non-profit sector can work with the corporates without a goal conflict, the resultant partnership would be sustainable, replicable and perhaps would throw open a vastly more powerful way to make the world a better place to live in.

Date received: September 28, 2003