Given the Flurry of New Public + Philanthropic Partnerships with the Private Sector, Let's not Forget the Attraction

The opportunity for government agencies, philanthropic institutions and civil society to more closely unite with the private sector for systemic social, environmental and economic change has become a top priority for those crafting strategic visions in social impact and sustainability. It's almost impossible to scroll through LinkedIn or Twitter and not see a headline or three touting the latest partners to join forces around funding, research, project implementation or elsewhere. For example, even the United Nations is exploring more efficient ways of engaging the private sector, particularly as the global community is relying heavily on the "private sector" to help us acheive all 17 Sustainable Development Goals (SDGs).

As a partnerships advisor who spends a good chunk of my time helping NGOs and government agencies better engage with private sector companies (and vice versa) it feels as though the tribe has finally spoken. The writing on the wall has finally been seen, that without the private sector as a critical partner in designing, funding and implementing social change and sustainability programs (i.e. building them into their business strategies) change simply isn't as forthcoming. It's never that simple though, is it? Partnerships take time, and differences in goal setting approaches, timeframes, expectations, risk profiles and financial mechanisms, let alone local contexts, make partnering with the private sector a bit more challenging than we'd all like.

For example, this week I followed along as several of the big USAID project implementers shared lessons learned in engaging private sector entities small and large, in rural and urban environments. The takeaways? While effective partnerships between civil society, public actors and the private sector can help grow and scale programs that have true impact on the communities they serve, they aren't without complexities like how to best measure impact (financially and socially), how to shift from the donor-funded mindset in country to one that's more ingrained in the business case, and how to make markets accessible and attractive to private sector partners.

Next week USAID will hold a webinar on its New Partnerships Initiative, which is largely aimed at re-orienting much of its traditional development and humanitarian work towards engaging more closely with the private sector. While I applaud this approach, and truly believe that moving from a purely philanthropic or public funding model is an ideal method for achieving lasting change, creating the right mechanisms for engaging local communities as buyers and sellers is where all new partnership initiatives should focus attention. Businesses are, by nature, market-led, profit-seeking entities that look at the role they play in society as creating jobs, creating goods or services, and operating to appease customers. What can the private sector do to help organizations like the United Nations or USAID if market systems aren't properly developed? Sure, the private sector has a bit more wiggle room to operate, and has some leniency in how it takes risks, but let's not forget that there isn't just one "private sector." The "private sector" is made up of millions of entities, of all shapes and sizes, with systems that differ in many ways from each other, and goals that span across time and financial criteria. Not all "private sector" is created equal.

So let's not forget the attraction: long-term, market-led and community based economic development that is spurred by investment and allows for system change that's truly bottom up. Let's not also forget that the "private sector" has to see some benefit for engaging with the public, philanthropic and civil society sectors as well. If potential partners to the private sector can't figure out how to adjust their modalities, remove red tape, operate quicker, faster and with more intention, and also determine how to articulate what a true financial bottom line will be by partnering, collaboration with the private sector simply WILL be more challenging.

Let's not discount the move companies are making towards wanting a social or sustainability-focused ROI. But in the end, companies do need to make money, sell products and services to customers, and operate as such. For these reasons, and more, the "private sector" is a truly attractive partner to governments and civil actors, but also for these reasons, we must remember the attraction is also the challenge.

Joanne Sonenshine is Founder + CEO of Connective Impact, a partnership advisory firm uniting mission-driven organizations to advance social, environmental and economic development goals through effective collaboration. Joanne is also author of Purposeful Profits: Inside Successful Businesses Making a Positive Global Impact.