Photo Credit: Mary Jordan (USAID)
This post has been adapted from my piece on the Truman Project blog, which can be found here.
Multinational companies and firms conducting business abroad have opportunities to partner with government agencies (such as the US Agency for International Development – USAID) and nonprofit organizations to solve global challenges, especially in developing market contexts. Companies engaged in public-partnerships of this sort are not just doing good to feel good—though that’s an added benefit—they often address local issues because the improvements enhance their ability to operate, and thus their bottom line.
Why would companies engage with the government to solve problems?
1) Buy-in from Essential Stakeholders
USAID has a proven track record of cultivating strong relationships with governments and NGOs. The agency has deep expertise in local challenges and, perhaps more importantly, insight into solutions.
Partnerships with USAID lend businesses that issue-area expertise and credibility with key stakeholders. Companies can take the expertise and relationships to create commercial goods and services.
Carolyn Brehm, Procter & Gamble’s Vice President of Global Governmental Relations, described partnering with USAID as, “[It’s] like getting a Good Housekeeping Seal of Approval. [USAID] bring[s] a lot of legitimacy to our initiatives, particularly when we are entering new markets.”
2) Access to Markets, Resources
By partnering with USAID for goodwill projects, companies establish a local presence, which opens the door to future transactions.
Take the Major League Baseball (MLB) and the Dominican Republic.
Arguably, the most crucial piece in MLB’s mission is recruiting top talent from within and outside the U.S. In 2011 about 30% of MLB players were foreign-born, 10% Dominicans. When MLB decided to partner with USAID/Dominican Republic, it was able to donate directly to on-the-ground projects and have access to potential new recruits.
The Pittsburgh Pirates went further than MLB’s previously established dollar-for-dollar matching grants program; the team created the Pirates Baseball Academy for Dominican youths, and hosted its Dominican Summer League Team. These programs help the local community and give the Pirates access to developing prospects.
3) Enhanced Reputation/Boost in Brand Image
If done in a transparent and well-intentioned way, public-private partnerships can give companies public-facing visibility on topical issues and opportunities to gain accolades from consumers and local communities alike.
Edelman’s 2012 goodpurpose study showed the power of brands engaged in good causes. The data is persuasive:
Not only are consumers making purchase decisions with Purpose top of mind, they are also buying and advocating for purposeful brands. 72% of consumers would recommend a brand that supports a good cause over one that doesn’t…71% of consumers would help a brand promote their products or services if there is a good cause behind them…[and] 73% of consumers would switch brands if a different brand of similar quality supported a good cause. (Edelman, 2012)
Out of these examples, which public-private partnerships were you most surprised to see?