Business and INGO Partnerships: Are We On the Same Planet?

Business and INGO Partnerships: Are We On the Same Planet?

{Up to 50% of African patients now purchase their antimalarial medicines at private retailers, i.e. small pharmacies, patent drug stores, and general stores. This pharmacy in Kisumu, Lake Victoria region, Kenya, is well stocked with antimalarials. (Photo Credit: Novartis AG/CC BY-NC-ND)}Up to 50% of African patients now purchase their antimalarial medicines at private retailers, i.e. small pharmacies, patent drug stores, and general stores. This pharmacy in Kisumu, Lake Victoria region, Kenya, is well stocked with antimalarials. (Photo Credit: Novartis AG/CC BY-NC-ND)

This article was originally published on Devex as part of its series, Making Markets Work, on October 11, 2016.

At a session on defining the "next generation" of primary health care at the United Nations General Assembly, Tim Evans, senior director of health, population and nutrition at the World Bank Group, said the international development community is suffering from "pilotitis."

"We have an epidemic of startups, and we need an epidemic of scale-ups," he said.

Evans described a "systematic blind spot" in global health to understanding and implementing solutions to scaling that we — international nongovernmental organizations and companies — know can work, such as encouraging partnership between the public sector and private sector health systems; creating large-scale pilots in order to create the evidence and measurements needed to justify a primary care approach; and creating affordable models that promote health and prevent diseases, not just treat them.

The Evolution of Partnerships

We've come a long way since I started working in the nonprofit sector 25 years ago, with partnerships evolving from pure philanthropy, to corporate social responsibility, to cause-marketing, to public-private-INGO partnerships, to social entrepreneurship, and finally to "shared value" — a term that assumes that a partnership can be created where a company realizes business benefits while a nonprofit realizes its mission, such as saving lives or improving health.

Economic value is created in a way that also creates value for society by addressing its needs and challenges. As we've gotten better at shaping these partnerships, we've seen real progress.

A few examples include:

  • Through CARE and Cargill's partnership in India, CARE brings education and health services to smallholder farmers, while Cargill — the world's largest agricultural development company — teaches them the latest agricultural practices. These farmers are critical to Cargill's grain supply chain: the healthier they are, the more economically viable their communities are.
  • Coca-Cola has significantly reduced its worldwide water consumption, thereby reducing cost of its primary raw material. Yet now they've gone further, as the company just announced that for every drop of water used in its beverages, it can now give the same amount back to the planet. Through 248 community water partnerships in 71 countries, Coca-Cola can replenish all of the water it uses. According to The Nature Conservancy, the company returned 191 billion liters of water to nature or human communities in 2015.
  • Management Sciences for Health is working with Novartis Access to build access in Kenya to 15 chronic disease medications that address cancer, diabetes and heart disease. Novartis is introducing and pricing these medicines at $1 per month per treatment. MSH is helping to build the public health supply chain because we see how deaths from chronic disease are rapidly increasing across Africa. We are drawing on each other's competencies, and we both see the need to build a scalable and sustainable approach to ensure that these medicines and health interventions reach remote populations.

In this way, companies and nonprofits are beginning to "make markets work" by investing in markets that, for the company, might not have sizable business returns until years later.

Learning a New Language

In the 1992 best-selling book "Men are from Mars, Women are from Venus: A Practical Guide for Improving Communication and Getting What You Want in Your Relationships," author John Gray contends that men and women are fundamentally different psychologically. Resentments arise when one sex feels that he or she has given more than he or she has received.

When building a "shared value" partnership between a business and an INGO, particularly in the international development sector, I sometimes feel that we are coming at it from different planets, with different languages, customs and culture. It's as if I'm on the "Starship Enterprise," with our nonprofit program team gathered on the bridge, wondering if we're going to blow each other up, or agree to live harmoniously on the last remaining habitable place in the universe.

During a partnership negotiation, if there were cartoon bubbles above our heads, they might look like this:

Nonprofit: This company is just trying to sell their product. We are not in the business of making them money. Don't they understand we can't save 1 million lives in five countries for just $300,000?

Company: This nonprofit doesn't understand that 14 other nonprofits have asked us for money for their pilots. I wonder if this nonprofit knows what they're doing? I'm being measured on community impact, but I've got a sales director breathing down my neck.

There's also a small problem called the balance of power. My favorite New Yorker cartoon shows a dog begging in front of a man, with the caption: "I find myself in the awkward position of once again asking you for a biscuit." It reminds me of the begging we nonprofits do, again and again, for donations.

Thankfully, we've begun to correct that somewhat through service level agreements, where we are paid for what we deliver, such as technical assistance or consulting. But our conversations are progressing, with better understanding of each other's needs, a willingness to learn from each other, and a growing respect for our respective skills and competencies. For example, companies are beginning to realize that INGOs are masterful at managing complex projects in fragile states, and have a deep understanding of communities, governments, and, most importantly, the end client base.

We INGOs are coming to value essential business skills and their application to complex problems. We are finding corporate partners who share our values and not just money from their pocketbooks.

Solving the Problem of Scale

However, we're not yet on the same planet together, due to one primary challenge: how can we scale interventions that work, and where will the money come from to pay for that scaling? How can all of the competing nonprofits, with their needs, ideas and projects, and the companies, with their competitive market drive, stop competing long enough to solve the scaling problem?

In an effort to afford these solutions, the development community is now turning to creative financing, using sometimes complex mechanisms such as social impact bonds, pooled funds, and private equity.

However, these creative financing mechanisms are at an early stage, with basically a philanthropic approach underlying them, particularly when "social returns" are the primary measure. In the end, sometimes good old hard cash is needed, and a lot of it, both to solve the serious social problem as well as meet business objectives.

The bottom line is that no sector can do it alone, not multinational organizations such as the World Bank, nor corporations, nor INGOs, nor country governments. There is simply not enough money to go around for every idea. If we share the value of universal health coverage — that every person has the right to health care, regardless of their ability to pay — then we must build markets that work, but don't have an immediate return on investment, for either INGO nor company. INGOs and companies must both put on their business hats and approach the problem-solving collaboratively, co-creating to find solutions that work.

With that, we can begin to move beyond "pilotitis" to full-scale impact.