The Future of Business-NGO Relationships

Authors

• Ayesha Barenblat

  Former Director, Stakeholder Collaboration, BSR

In my new role as BSR’s Director of Stakeholder Collaboration, I am focused on building relationships with NGO colleagues globally to bring their insights to our member companies and develop next-generation stakeholder engagement approaches that are outcome based and take into account trends in the field. BSR created this position to deepen relationships with civil society and foster collaboration between stakeholders and business.

Over the past decade, NGO activity has been shaped by the spread of democracy and the rise of the internet opening up societies. This spurred a flowering of all types of NGOs that enjoyed support from northern governments and unfettered trust from the public. In particular, we saw the rise of western-based international NGOs (or “INGOs”) that now form a key bridge between business, government, and society.

To get a sense of what’s in store for the next 10 years, I spoke with 15 NGO leaders from around the world (with a particular focus on Brazil, India, and China) as well as BSR’s senior management team in the United States, Europe, and Asia. My aim was to get their candid perspectives on how business-NGO relations will evolve over the next decade.

Based on these conversations, what follows are five trends shaping the NGO sector, and an analysis of what these trends will mean for business and NGO engagement in the next 10 years.

Five Trends Shaping NGOs

1. Decline in northern government influence: The economic stagnation and relative loss of political influence among countries whose governments supported and helped build the INGO sector of today (the United States, United Kingdom, and other OECD countries) has these countries looking inward to address their own economic woes. As a result, they no longer have the same ability to support INGOs by providing core funding and influence to tackle global sustainability issues.

   This loss of support will result in some INGOs becoming more open to collaborating with business on sustainability solutions. It’s also likely that more grassroots-funded advocacy groups fueled by social networks will bring issues to the table much more quickly with limited funds. INGOs also risk losing their legitimacy, as resource-rich emerging countries become obsessed with growth at all costs and curtail INGO activity on the ground. Finally, economic stagnation in the West may mean INGOs need to focus on economic justice issues at home.

2. Rise of the global South: Countries in the global South, particularly China, are gaining economic and political influence, which is changing the landscape of all NGO types in crucially important ways. The pessimists argue that this marks a black period for NGOs, with China in particular repressing NGO activity, especially on human rights, and the BRICS not making up for the funding deficit left by the OECD countries.

   The optimists, however, say that the changing geopolitical stage will pave the way for more locally relevant southern NGOs to emerge and mobilize people using bottom-up approaches, just as we saw during the Arab Spring. It appears unlikely that these southern NGOs will mirror their northern counterparts when it comes to brand power, size, or operating structure. Instead, the South is starting to see the birth of social ventures and technology-enabled advocacy groups such as the Awaz Foundation in India and IBASE in Brazil.

3. The social network effect: Following the Arab Spring, there is growing interest in using social networks to generate funds and grassroots support for NGOs, particularly in the wake of institutional funding drying up. However, opinions are mixed about whether social networks will amplify or erode the power of NGOs.

   One school of thought believes that loosely organized groups may compete with NGOs by using tools like Facebook and Twitter to organize people. Indeed, WikiLeaks today breaks stories in a way that was traditionally done by NGOs.

   Others view social networks as effective tools for NGOs to deepen their connection with the public. This group believes social networks will play a greater role in the South, in particular, as a way for smaller, leaner campaigning groups to mobilize resources and people quickly and cheaply.

4. The era of hypertransparency: Over the next decade, universal data accessand the emergence of new reporting standards (such as the Global Reporting Initiative for NGOs) will force INGOs to achieve parity with business and the public sector on transparency standards.

   The rise of companies embracing hypertransparency—with more businesses reporting publicly on ESG data and sustainability issues due to pressure from investors and others—also competes with NGOs’ traditional role as watchdogs reporting on company activities.

5. The convergence of wicked problems: In the next 10 years, the links between climate events, growing population, and unsustainable consumption patterns will be made clearer and give rise to food shortages, water wars, mounting land-use concerns, and growing inequality between the haves and have-nots. Given the magnitude of these problems, NGOs will be forced to work together on systemic solutions.

The Next Generation of NGO-Business Strategies

In the wake of these trends, NGO strategies with business will change in several important ways:

• A move from confrontation to collaboration: The most successful NGOs already recognize that real change requires campaigning against and collaborating with companies—and this hybrid approach is likely to intensify.

  In terms of confrontation, companies can expect social networks to support more radical groups, bring more Southern voices into the mix, and foster greater collaboration among campaigning organizations. To remain credible, businesses and NGOs that are working together should be prepared to demonstrate measurable impact from their partnerships.

• More selectivity around partnerships: In general, both businesses and NGOs are expressing fatigue about gathering for the sake of a conversation, and many INGOs have been skeptical about the overall impact of NGO-company partnerships to date. Going forward, successful NGO-corporate engagements are likely to be time bound and focused on specific outcomes, and partnerships in general are likely to be scrutinized more.
• An increase in social ventures: In the South, particularly in India, China, and Brazil, the increasing number of social ventures funded by newly emerging, high net worth individuals and social entrepreneurs will spur innovative solutions (such as the ones we have already seen in clean tech) that also demonstrate a clear return on investment.
• More pressure on multistakeholder initiatives: The impasse on climate change and ongoing challenges with human and labor rights have created a sense that some multistakeholder initiatives need to sunset, while others need to develop a greater clarity of purpose and accountability, including a tie-in to regulation or other hard instruments.
• More collaboration between NGOs: Historically, NGOs have operated in silos based on their programmatic or priority issue areas. Given the complexity and interconnectedness of sustainability issues, however, savvy NGOs will increasingly collaborate with one another to, for instance, bring the human dimension and the cost of displacement into climate conversations.
• Rise in virtual campaigns: To date, most NGOs have used social networks as a communications tool. In the next decade, business should expect to see savvy NGOs moving from communication to mobilizing the public with viral and compelling campaigns that break human stories on the ground in a faster, more connected way.