Even before the financial crisis, it was widely recognized both that civil society has a key role to play in the Asia Pacific region and that it has inadequate resources at its disposal. Since the crisis both the challenges facing NGOs and the financial constraints have worsened. In this context corporate philanthropy is seen as one answer. A new case study project examines the potential for corporate–NGO partnerships.
The last few years have seen a spate of attempts to stimulate corporate philanthropy among Asian and American corporate leaders working in the region. The Council on Foundations and Asia Pacific Philanthropy Consortium (APPC) together sponsored a conference in Hong Kong in September 1995 on the theme of ‘Corporate Citizenship in the Asia Pacific’, while the APPC conference in Bangkok in January 1998 took as its theme ‘Supporting the Nonprofit Sector in Asia’. In 1996 Keidanren (the Japan Federation of Economic Organizations), with the cooperation of the Japan Center for International Exchange (JCIE), sent a mission to the United States to study corporate–NGO partnerships. The Japan NPO Center, founded in late November 1996, is supposed to play a catalytic role in relationships between the non-profit and corporate sectors.
The underlying assumption in all this is that corporate philanthropy, though limited in scope at present, is rapidly growing and has the potential to provide a significant financial base for emerging civil societies in the Asia Pacific region.
New directions in corporate philanthropy
The mid-1990s saw a noticeable trend for corporations to develop partnerships with emerging Asian NGOs rather than merely continuing the traditional pattern of charitable giving. This seemed to reflect a growing recognition that NGOs have a key role to play in responding to social issues and that working with NGOs will help companies to gain broad public support for their philanthropic initiatives.
This new direction in corporate philanthropy in the Asia Pacific requires a more sophisticated approach on the part of corporations in defining priority areas, identifying NGO partners and using the expertise of intermediary organizations. It also presents NGOs with new challenges. They need to motivate and sustain corporate partners while clearly demonstrating their own expertise, and to retain their identity as autonomous and innovative actors in society without becoming mere corporate subsidiaries.
The aim of the JCIE case study project is to examine the diverse patterns of corporate–NGO partnership in the Asia Pacific and to formulate at least tentative criteria for successful partnerships.
Impact of the crisis on NGOs
When the JCIE project was first conceived, most countries in East Asia were still enjoying the consequences of phenomenal economic growth, often referred to as the ‘Asian miracle’. It is clear that the remarkable economic development of the past decade or two contributed greatly to the growth of civil society in the region.
The emergence of a middle class was a critical factor. Many public-spirited development NGOs in Asia Pacific countries, established in the latter part of the 1980s and the early part of the 1990s primarily by middle-class individuals, were able to articulate the general concerns for the environment, human rights and democratization that were emerging most visibly among the middle class.
On the other hand, it can also be argued that the negative consequences of rapid economic development in the region have contributed to the rise of civil society. NGOs claim that Asian governments have not been able to bring about equitable economic development and that it is therefore up to the non-governmental sector to come up with alternative policies that can offer a more equitable distribution of the benefits of economic growth. There is a growing recognition that NGOs can play a critical role in coping with pluralistic social needs not addressed by government or business.
The financial crisis has left NGOs in the Asia Pacific facing greater challenges than ever before. The expectations placed upon civil society have grown as economic conditions have worsened. The human impact of the crisis has become evident in many areas: falling real incomes and rising poverty; increasing unemployment; growing migration flows; emerging food shortages and malnutrition problems; declining public health; falling rates of participation in education; and an increasing incidence of crime.
In the face of this crisis, many Asian governments have downsized drastically and reduced the budget allocation for dealing with the human and social impact of the crisis. Civil society is thus expected to play a greater role in the creation of safety nets to protect the unemployed, the poor and the marginalized.
There is also growing public acceptance that civil society organizations (CSOs) can contribute to improvements in the governance of society. The deficiency of governance in many of these countries has come to the fore as the crisis has been attributed largely to the absence of transparency and accountability in East Asian governments, and to the absence of transparency in government–business relations.
At the same time, as already noted, financial support for CSOs has dwindled.
Evolution of corporate community involvement in the Asia Pacific
As corporations departed from traditional patterns of charitable giving to the poor and the needy and began to engage themselves actively in dealing with social problems, they started to view NGOs as useful partners. At the same time, governments started to expect more from business in responding to such needs as child care, environmental regulation and consumer protection.
A new generation of managers and owners has also helped transform the way that corporations interact with the broader society, with many companies coming to see corporate responsibility as an essential component of their overall business strategy and not simply a public relations activity. Corporations operating in East Asia have begun to recognize that their long-term success is closely related to the health and stability of the societies in which they operate.
The Asian financial crisis has dealt a devastating blow to both indigenous and global corporations operating in the region, and as a result some philanthropic activities have had to be curtailed. At the same time, corporations have come under pressure to support NGOs providing relief to those hit hard by the crisis. They are increasingly expected to address social agendas and to contribute to the development of viable communities and sustainable markets.
Corporations have also found themselves under fire recently for their arcane pattern of corporate governance, for example collusive relations between their officers and government bureaucrats.
Growing importance of cross-sectoral partnerships
Most of the countries in Asia that achieved the ‘East Asian Miracle’ in the 1980s and early 1990s had a system of governance well suited to pursue the single purpose of rapid economic growth. Governments were considered to be the sole arbiter of public goods.
These traditional systems of governance, which worked well for many years in countries such as Japan and Korea, are now being questioned. It has become clear that many of the region’s governments can no longer cope with the rapidly growing social needs, thus leaving a widening space for new actors from the NGO and corporate sectors.
In the case of Japan, it took a tragic earthquake to galvanize government, political and business leaders, and the mass media into recognizing the role of civil society in meeting the country’s pluralistic needs. The impressive on-site relief work carried out by more than 1.3 million volunteers and NGOs touched off a movement that led to the passage of landmark non-profit legislation in March 1998. In Thailand the 8th National Economic and Social Development Plan (1997-2001) emphasizes ‘people’ as the centre of development.
The forces of democratization that have taken root in many Asian countries – though still constrained by authoritarian regimes in some cases – have substantially reduced the ideological conflicts between government and business on the one hand and NGOs on the other. Though government bureaucrats still tend to regard NGOs as convenient subsidiaries, there is a growing recognition that NGOs are effective because of their independence from government. Conversely, NGOs are becoming more self-confident and mature and are thus allowing themselves to forge partnerships with government and business. The cases examined in the JCIE project aim to highlight some critical factors in successful partnerships.
What makes a good corporate-NGO partnership?
Commitment to communities
The word ‘partnership’ suggests two or more parties working closely towards the same goal. The shift in corporate philanthropic activities from charitable giving to community involvement has created the necessary environment for partnership with NGOs working in the same communities. The San Miguel Corporation, for example, has moved from donations to such community activities as fiestas and sports leagues to community efforts aimed at the creation of livelihood opportunities for local residents. In China an increasing number of private enterprises have begun contributing to such causes as the environment, poverty alleviation, education and social welfare.
A number of corporations have turned to environmental issues. The environment represents an area of common concern for many communities as well as an area in which a large number of NGOs are active, and it is therefore a fertile field for partnerships. Indonesia’s leading producer of bottled water, PT Aqua Golden Mississippi, responded to criticism from local NGOs by forming a partnership project for bottle recycling. With the Cebu Hillylands project in the Philippines, corporations understood that the preservation of upland watershed areas through community development and reforestation was in their own best interest as well as in the interest of the local communities, since the water supply was a critical resource for them.
Working with governments
As corporations commit themselves to promoting the interests of communities, it is natural that they should work closely with local authorities. BP, for example, has followed a policy of establishing partnerships with government authorities, particularly in Vietnam, where foreign corporations and foreign NGOs must have government approval for their operations. In China, the government has encouraged the work of corporations involved in community development as part of the All-China Federation of Industry and Commerce’s initiative, the Glorious Cause. In the Cebu Hillylands Development Program, it was the mayor of Cebu City who approached the Philippine Business for Social Progress (PBSP) to tap the resources of the business community to work with farmers, and who in turn convinced the farmers of the companies’ sincerity. The mayor of San Juan in La Union province of the Philippines was a key to the creation of a partnership between his government, the San Miguel Corporation, its affiliated NGO and the local community to promote economic development through the production of corn and the introduction of improved agricultural techniques.
A clear statement of corporate philosophy
In most cases studied, the corporation has adopted a clear statement that emphasizes the importance of corporate philanthropy in general and community involvement in particular.
Levi Strauss’s mission and aspiration statement, BP’s 1998 booklet What We Stand For, Bankers Trust’s Public Responsibility and Concern and San Miguel Corporation’s ‘social development statement’ all reflect the company’s strong belief in contributing towards the improvement of the quality of life in the communities where they operate.
These statements might easily be regarded merely as ‘noble goals’ or hollow rhetoric if it were not for the strong leadership provided by senior executives of these corporations. One who led by example was Robert Haas, CEO of Levi Strauss, who, along with senior managers, joined employees in staffing booths and distributing literature on AIDS to other employees at a time when little was yet known about the disease and the stigma attached to it was still prevalent. Another example was provided by Gaishi Hiraiwa. Upon becoming chairman of Keidanren, he introduced his philosophy of kyosei or ‘symbiosis’ to the organization and its members, stressing the importance of coexistence between corporations and the surrounding natural environment. This led to the announcement of an Environment Charter, which was translated into action in 1992 when the Keidanren Nature Conservation Fund (KNCF) was established to involve Keidanren member companies in nature conservation projects. At BP 350 of the company’s top managers were involved in the drafting of What We Stand For, which was disseminated to all the company’s employees around the world.
Another common feature of successful corporate community involvement (CCI) activities is the importance attached to employee involvement. Employee participation enables corporations to address the needs of communities as perceived by people from those communities. It also helps corporations project a community-friendly image and gives employees a sense of pride. Bankers Trust local staff have helped villagers with business plans and provided technical assistance that allowed local residents to build new roads and other infrastructure on their own. Employees of Chinese corporations often become involved as project coordinators and technical advisers for local partner organizations.
Employee involvement is also seen as bringing educational benefits. Bankers Trust chose a barangay close to Metro Manila rather than a more remote rural location with the specific goal of allowing its local employees – from clerical staff to the head of the country office – to go on site visits. The company finds that such visits enable their staff to broaden their skills. BP uses site visits to teach employees about community development.
Levi Strauss has elaborate organizational mechanisms to encourage employees to be active in their communities. The Community Involvement Teams (CITs) organize workers throughout the company into groups of volunteers, offering them start-up money and matching the group’s own fundraising efforts. San Miguel Corporation hires ‘community organizers’ to help organize community groups and associations so that their livelihood activities can fit the company’s requirements. Yasuda Kasai has established a ‘volunteer leave’ system that allows workers to apply for up to three years of paid leave to work for NGOs.
Effective use of NGO expertise
If corporations’ CCI activities are to be effective, they must find the right NGO partners. One thing that NGOs can offer corporations is their reputation and acceptance in the community. PT Aqua Golden Mississippi, in the face of criticism from environmentalists, initiated a partnership with Friends of the Environment (Dana Mitra Lingkungan), an umbrella NGO with an extensive network of environmental NGOs and environmentally concerned businesses. For Toyota, forging a partnership with the Association of Art, Culture and People with Disabilities, a national NGO, was an effective way to reach out to local NGOs and individuals around the country.
NGOs can also help their corporate partners to respond to the needs of the communities into which they wish to move. BP joined forces with Save the Children USA to launch the Poverty Alleviation and Nutrition Program in Vietnam. BP formed a partnership with Fauna and Flora International to undertake the Cuc Phuong National Park Conservation Project. In both cases NGOs’ capacity to work with community organizations and villagers was crucial.
Localizing CCI activities
NGOs are often called upon when corporations wish to localize their CCI activities. Bankers Trust entered into a partnership with PBSP and the Ayala Foundation to carry out the Barangay Improvement Project in Manila. Its view is that working with local NGOs is critical for the success of any international project. Levi Strauss started an innovative CCI project in Japan in 1997 through a donor advised fund given to JCIE, which in turn distributes funds to NGOs in Japan in accordance with Levi Strauss guidelines.
A number of corporations stress the need for flexible guidelines. BP, for example, does not set global or even regional guidelines since it must respond to the specific needs of diverse countries. The approach to community affairs is therefore determined by the local managers.
What, then, is so special about corporate–NGO partnerships? Perhaps the most significant aspect is the synergy that is created as the partners bring their complementary talents and resources to the table. NGOs contribute an appreciation of the broader interests of the community, while corporations bring not only practical skills and expertise but a sense of accountability and hard-nosed results-orientedness which is often lacking in NGOs.
Partnership of any kind depends in the final analysis on people wanting to work together. A chance encounter between the mayor of San Juan and the CEO of San Miguel, for example, set in motion a programme that benefited both local farmers and the corporation. The Peduli Aqua-DML programme had its origins in meetings on solid waste management between the president of PT Aqua Golden Mississippi and environmentalists. The Bankers Trust partnership with PBSP had its origins in encounters in international conferences.
Tadashi Yamamoto is Director of JCIE.
Valuing partnerships – finding out if they really work
Do partnerships really work? The Prince of Wales Business Leaders Forum (PWBLF) has for the last 18 months managed an ‘action research’ programme to find out if it is possible to identify the value of partnerships. The PWBLF’s ‘Measuring Impact Programme’ has comprised international and regional workshops (S Asia, SE Asia, S Africa and CEE) involving about 120 participants from around the world. A final international review meeting in April 1999 resulted in production of a ‘living toolbox’ for assessing partnerships. This is a combination of principles, case studies and practical tools to help individuals develop assessment frameworks.