Video still. Ethiopia. Photo: Stephan Bachenheimer/ World Bank
By Kyle Peterson, Managing Director, FSG
FSG and Professor Michael Porter of the Harvard Business School have written extensively about the changing role of business in society under the banner of shared value. As much as we see new opportunities for the private sector to solve many of the world’s toughest problems, we realize that, even with great innovation, companies do not reconceive products, improve productivity in the value chain, or build the enabling environment alone. Often, NGO partners, government, and donors are needed to fill in knowledge and relationship gaps or provide complementary funding.
Last week, approximately 90 representatives from companies, NGOs, and government discussed trends in shared value partnerships at FSG’s second, annual Shared Value Summit. Jane Nelson, Director of Harvard Kennedy School's Corporate Social Responsibility Initiative, moderated a panel that included four actors partnering with business: Kris Balderston, Office of the United States Secretary of State, Global Partnership Initiative; Carolyn Miles, CEO of Save the Children; Jennifer Tescher, head of the Center for Financial Services Inclusion; and Margaret Coady, managing director of the Committee to Encourage Corporate Philanthropy (CECP).
Carolyn Miles from Save the Childrenopened the session stating that “the old partnerships have been about how we can get a corporate partner to write us a check so we can go do what we want, but that’s not what this is about.” NGOs, once viewed as corporate philanthropic grantees, are increasingly becoming vital business partners. In a six-year partnership, Save the Children has helped Proctor & Gamble develop new markets for its sanitary products in developing countries. While Proctor & Gamble benefits from Save the Children’s demand generation, Save the Children views the partnership as a way to stop dropout rates among young girls in resource-constrained settings. Save the Children and other NGOs are now pro-actively offering similar services to other companies.
Kris Balderston from the US State Departmentmentioned that “we’re not talking about money anymore. Companies are interested in the networks and technologies that partners can bring.” The Center for Financial Services Inclusion’s Jennifer Tescher said that her organization was the first to document the size of the opportunities and the markets in the US for financial institutions.
The conversation took some interesting turns. Audience member Luella Chavez D'Angelo,
Senior Vice President, Social Ventures, and President, Western Union Foundation, spoke about an opportunity for NGOs to be involved in the design of new products. “How do we bring you into those conversations to help us really innovate?” Margaret Cody of CECPmentioned that companies are using corporate philanthropy as a “radar to identify the needs on the ground” and then incubate shared value where market failures exist. Lastly, the audience stretched the thinking beyond individual partnerships, advocating for “platforms” that foster multi-member partnerships for several companies with overlapping interests.
Challenges remain. The media is still stuck in traditional views about civil society, government, and business relationships. And, as mentioned by audience members and Margaret Coady, companies can be tentative in leveraging corporate philanthropy for shared value initiatives due to concerns about “self-dealing.” The audience urged reform to remove legal barriers in the use of corporate philanthropy as a tool to accelerate shared value.
FSG recognizes that the subject of corporate partnerships with government, civil society, and funders and the use of corporate philanthropy as a tool to foster shared value deserves attention. Over the next year, look out for new research that investigates the changing relationship among business, civil society, philanthropy, and government.
More on the 2012 Shared Value Leadership Summit event, including the full video of Michael Porter’s keynote presentation.
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