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How can campaigners tap corporate largesse without undermining their credibility? Unlocking millions for advocacy

December 12, 2013
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It’s great to be accidentally topical. In the week that Save the Children had to fend off allegations of letting corporate funding influence its campaigns, here’s Oxfam America’s Chris Jochnick (@cjochnick) suggesting a way to accept money (in this case from extractive industries) while staying demonstrably independent

Oxfam was recently approached by a major mining company to help it implement “free prior and informed consent” (FPIC).  The company Chris Jochnick(rightly) anticipated that it would face future conflict if it didn’t earn community support for its project.  It needed an organization with the expertise, credibility and relationships to help it manage this process.

For Oxfam, this was a great opportunity – our local partners would have likely supported it, we’ve been championing FPIC for many years, and here was a chance to help implement it in a credible, robust manner with an influential actor.  We turned it down – in no small part because of the expense.  The company would have been happy to cover our costs, but we couldn’t accept payment.  Our campaigning around extractive industries makes it impossible to take money from oil or mining companies.

It’s a common story. As a general rule, donors won’t pay for corporate advocacy or engagement (see interesting breakdown on human rights funding here); and credible advocates won’t take money from company targets.  Community groups lack funds to engage with companies meaningfully, and better-resourced NGOs are loath to deploy scarce funds to advise or mediate around conflicts.  Those companies out to make good faith efforts to address complex challenges will lack for credible partners and intermediaries (a common lament).  The result:  watchdogs stick to “naming and shaming”; companies hire consultants; problems fester.

This situation is only getting worse.  Companies seeking resources, markets and cheap labor are moving aggressively into poorly-governed countries, exacerbating conflicts and raising a host of new challenges.  Efforts to address this “governance gap” have led to a dizzying array of voluntary and global standards, capped by the UN Guiding Principles on Business and Human Rights (with 1700 people attending the most recent UN Business and Human Rights Forum), but oversight is lacking and funding for these initiatives is woeful.

Multi-stakeholder initiatives (MSIs) bring companies and advocates together (e.g. the Fair Labor Association, the Roundtable on Responsible Palm Oil, the Global Network Initiative), but these initiatives are not aimed at funding watchdogs, and, not surprisingly, they struggle to attract and engage advocates.  Oxfam recently dropped out of a large MSI targeting oil and mining companies (the Voluntary Principles on Security and Human Rights) in good part because we couldn’t justify the use of staff resources in a process that lacked adequate accountability measures. Other large NGOs — Amnesty International, Human Rights Watch, Human Rights First – have similar dilemmas; smaller watchdogs – local NGOs, community groups, social movements face even more significant hurdles and are rarely present.

corp transparencyCompanies recognize that their bottom line and reputations rely on getting out front of conflicts and have increasingly recognized and adopted human rights commitments.  Implementation is now high on everyone’s agenda and watchdogs and stakeholders need to be in that mix.   Companies are willing to pay for it.  So how do we tap ready and willing corporate largesse for a field that is starving for resources?

A genuine solution to this problem – a “Watchdog Fund” – would have to meet four conditions:

  1. Garner corporate funds.  In theory, the Fund could be subsidized by a small tax on companies in high risk industries.  For governments truly intent on addressing conflict and corruption, underwriting civil society engagement makes eminent sense (though may raise additional issues for watchdogs).  Recent legislation in India requiring companies to devote 2% of net profits to corporate social responsibility offers a possible model (interesting blog analyzing it); but in reality, we are still a ways off.  In lieu of that, companies will have to be sufficiently incentivized to fund watchdogs.  Many companies will have an interest in stronger civil society groups to address complex problems, help level the playing field and advise on novel issues.  Companies commonly pay for the right to participate in MSIs that aim to raise standards and bolster transparency/accountability (however weakly) and companies are willing to partner with (and pay for) credible stakeholders.  The challenge would be to attract investments in an independent fund, over which companies might have some loose call on services.  That’s probably easiest with a handful of companies working on a particular challenge like FPIC or human rights grievance mechanisms (there are many such platforms already bringing companies together).
  2. Designate funding for credible watchdogs. There is no shortage of good environmental, development and even human rights-minded NGOs ready to take funds from any company; but by definition, these groups are too beholden to the companies to serve as credible watchdogs or intermediaries.  The Fund would need to target a more “radical”/independent mix of organizations, prepared to work on some particular challenge involving contributing companies.
  3. Define a set of “transformative” activities. The Fund would need to focus on activities that currently go unfunded and that get to the root of complex problems.  In particular, the Fund should empower marginalized stakeholders (capacity-building, rights awareness, logistical support for engagement) and foster accountability (transparency initiatives, implementation of rights, oversight processes). It might also fund ‘learning by doing’ experimentation – in complex systems, we often don’t know the answers in advance.
  4. Attract willing watchdogs. This constitutes the main challenge.  Credible watchdogs will tend to be suspicious of anything that benefits (or is paid for by) a corporate adversary.    For good reason, watchdogs would assume the Fund is aimed at coopting stakeholders and quelling legitimate protests.  Green-washing, dividing and conquering, bribing adversaries are familiar approaches of companies operating in conflict environments.  Watchdogs will assume similar shenanigans from the Fund and will be reluctant to risk their reputation and credibility by taking part.  However, even the most radical organizations take money from foundations with ties to Wall Street and watchdog organizations have willingly joined initiatives funded and driven by company interests (e.g. the various MSIs above).

The key is credible independence – in fact and perception.  The Fund would need to be managed in such a way as to convince watchdogs that the financial backers – the company targets – were not influencing the designation of funding.  To that end, the Fund would need some kind of a third party institution to control the funds, with credible leadership (e.g. watchdogs on the board), decision-making independent of company donors, no single company representing more than X% of funds, etc.

For a Fund to attract both companies and advocates remains a stretch; but both the demand and opportunity for it grows.  The global funding universe for corporate watchdogs could be easily doubled by tapping corporate funds; and forward-leaning companies would be well-served by the investment.  A foundation looking to leverage its own funding in this area could do worse than designate some modest funds to exploring the possibilities.

4 comments

  1. Chris – an interesting idea,and certainly one that could be explored with an existing MSI, although the governance structure of the fund would probably need to be separate. Is this something that you are positively exploring?
    Gerry

  2. Interesting idea.

    I find it difficult to apply the idea to pharmaceutical companies. When they fund NGOs e.g. patients’ groups they ensure that the group advocate for their medicines. How many NGOs receiving significant funds from pharma can talk about Intellectual Property causing price monopoly, or on the high price of medicines or on access to medicines?

  3. Hi Chris,

    Your proposal for a ‘watchdog fund’ is a model potentially relevant to sectors beyond the extractive industry. I wonder whether you’ve had any response from companies on its feasibility…

    As you say, it is also topical, given the allegations aimed at Amnesty, Comic Relief and Save the Children on Panorama. The broader discussion on NGO-private sector relations that this publicity has prompted is a good thing. The way Panorama patched together a misleading narrative was not.

    Save the Children – where I work – have completely refuted the claims that we dropped campaigns due to concern over the impact on existing or potential corporate partners. Having been involved in the discussions in November 2012, I can say with unqualified confidence that the allegation is untrue.

    Save the Children has close relationships with many businesses. And there are of course differing opinions within the organisation – about campaign themes and tone, but also about programming. This is part and parcel of being a large organisation.

    Sometimes, partnerships impact the way in which we can approach these organisations on changing certain areas of their business practices. It can be the case that the close relationships we hold mean we have a better chance at shifting positions within a company. We’ve certainly found GSK to be open to discussion on many areas (others, less so). Our refusal to take money from one company this year, opened up a wide ranging discussion about why the way they were making money didn’t fit with our values – something they clearly hadn’t considered before.

    Of course there are times when we need other theories of change – public policy, regulation, transparency and calling out companies that are doing the wrong thing. We do that too.

    Throughout autumn 2012, we were leading the planning of the Enough Food for Everyone IF Campaign – I chaired the working group that focused on multi-national tax avoidance. In February of this year, we also released a report and accompanying campaign that explicitly criticised Nestle and Danone, amongst others, for alleged violations of the International Code of the Marketing of Breastmilk Substitutes. We are now actually hiring an Access to Medicines Adviser, who will scrutinise the drug prices of pharmaceutical companies- including those of GSK.

    Do we have the balance right yet? Probably not. This isn’t something that is unique to Save the Children – all NGOs that take funds from the private sector deal with the same issues to greater or lesser extent and I am absolutely sure that email conversations of a similar ilk debating the relative risks of a campaign take place in other NGOs.

    One thing that is clear is that there needs to be greater acknowledgement of the diversity within the NGO sector. Not all organisations have to campaign on every issue at every moment. There is a combination of insider/outsider tactics that can support changes that will contribute to greater social justice. Partnerships do have a place within this.

    While there is no denying that these partnerships can lead to conflict of interests, this is not inevitable. Transparency here is key as is the need to better communicate the complexity inherent in dealing with the private sector – as well as with international development more broadly. A positive outcome of the last week is the opportunity for the whole sector to be more open and frank about the way we work. Your blog is a great first step in doing that.

    David

  4. Chris,
    I think the idea you are putting forward is a sound idea andhas merit. My worry is that it suffers either from the curse of sophistication or the curse of expectation. Having written (for Oxfam) on many ocassions about the motives behind corporate giving and corporate engagement the reality is that all too often we anticipate either benevolence in decision making (traditional philanthropy) or enlightened giving linked to core business (exploring riskier business models that have a social impact). The reality however, and those featured in the panorama case were neither. They were marketing or reputational engagement strategies by the corporates in question (edf was a staff vote no doubt with the prize going to the mist emotionally engaging cause). The teams in the ngos tasked with pitching up to them are financially targeted business development professionals desperate for sustainable sources of success and a portfolio to pass on to their account management colleagues. They are contending with the pressures of income from one side and managing to navigate principles on the other. Most often holding out for somebody senior to tell them it’s ok to proceed.
    The reality is that far sighted independently managed funds that operate in the pre competitive space are either neglible or non existent in a world where ngo’s measure success or need in seven or eight figure sums and corporates “give” primarily from the marketing pot far removed from core business.

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