"People don’t buy what you make; they buy what you stand for." These were the words of Adidas’s former head of global brands, Eric Liedtke, in 2018 during a talk about creating change within business at a conference of the creative festival organisation SXSW in Texas. He was talking about a four-year collaboration between the footwear manufacturer and an environmental charity to produce a line of trainers made from reclaimed plastics.
When Adidas issued two profit warnings in 2014, it was Liedtke who led with the idea that sustainability could be "a real USP". When Cyrill Gutsch, founder of the environmental network Parley For The Oceans, stepped into Liedtke’s office that same year to ask if tackling the climate crisis could be factored into the firm’s business plan, it began a partnership that last year produced five million pairs of trainers made from plastic recycled from the ocean.
The Parley and Adidas recycled ocean-waste shoes are just one example of the ways in which new kinds of corporate-charity partnerships are changing the sector. In 2018, Building More Impactful Corporate-charity Partnerships, a report by the charity sector think tank NPC, said that 41 per cent of charities expected to be partnering more with private sector organisations over the following three years, indicating an opportunity for growth for both charities and companies.
But rather than a traditional funder-recipient relationship, we’re seeing more interdependent relationships between the for-profit and not-for-profit sectors. What does this mean for charities? Could large, socially conscious corporates crowd them out of a space they traditionally dominated, or could they be key ingredients for their future success?
Partnerships have historically been beneficial for both. Traditionally, corporations have been able to improve their credibility through association with non-profits, while charities benefit financially. This was backed up by the NPC’s report: 91 per cent of businesses said enhancing corporate reputation was the driving factor behind engaging with charities, while resource generation was key for 92 per cent of NGOs.
Those factors remain key motivations for collaboration, but new ways of generating revenue streams are becoming more popular, especially through sales of charity-affiliated products that can be promoted easily on social media. In the age of online activism, today’s climate-conscious Generation Z teenagers are a key demographic for businesses, and charities can tap into this age group in the same way. Take Parley’s #fortheoceans campaign: sharing a photo of your Parley x Adidas trainers on Instagram helps the charity to spread awareness (influencers tagging the brand will increase engagement), with the added bonus of helping Adidas to sell shoes. The more Parley shoes Adidas sells, the more it can feed back into its partnership with Parley.
Joe Flack is corporate partnerships manager at the charity Street League and is part of the Institute of Fundraising’s corporate special interest group. As he puts it: "For the corporation, partnerships offer legitimacy to align itself with a charity. If it’s trying to be green, or to be socially conscious, having the right charity as a partner will only back up its claims of legitimacy in that space."
And where corporations might simply have given money in the past, increasingly multi-faceted partnerships can make for more successful collaborations in the longer term. A report from the IoF in 2015 said that 70 per cent of one-off donations from corporates were less than £5,000, suggesting the sector’s goals were generally more short-term and focused on a single outcome. But now, as more charities look to partner with businesses that have multiple aims, there are many opportunities to increase your output in completely new ways.
For the corporation, partnerships offer legitimacy to align itself with a charity. If it's trying to be green, having the right partner will back up its claims of legitimacy in that spaceJoe Flack, corporate partnerships manager, Street League
"The obvious answer to what’s in it for charities is funding," Flack says. "But beyond that, a partnership offers further expertise that corporates can offer to the charity on how it delivers, based around pro bono work and volunteering."
However, although any voluntary support might seem better than none at all, this isn’t always the case. Ongoing, skilled volunteering is undeniably useful, but the IoF found in 2015 that one-off, unskilled volunteering opportunities were much more commonplace among charity-corporate partnerships. Although corporate employees might consider volunteering to be an attractive proposition for their own personal growth – which also takes them away from their desks for a few days – it’s more beneficial for charities if they actually do something in line with their day jobs. Pro-bono work might be less "fun" for volunteers, but it’s a far more efficient resource for the charity than a gaggle of accountants descending for a day to repaint the office walls.
"I think volunteering as a benefit for charities is really up in the air," says Angela Kail, director of consulting at NPC. "A lot of charities that talk about the volunteering they get from corporates say it actually ended up costing them rather than helping them."
The IoF’s 2015 report, Corporate Fundraising – a Snapshot of Current Practice in the UK Non-profit Sector, stated that more than a third (34 per cent) of charities said they didn’t have the capacity to manage more corporate volunteers, yet often felt obliged to accept them. "It’s something that a corporate often thinks it is giving as a benefit, which might not always be the case, but charities are still seeing it as an investment in fundraising," Kail adds.
The rise of ethical business
Another trend to gain traction in the sphere of doing good is the rise of B-Corporations, an ethical business initiative that describes itself as a "global movement of people using businesses as a force for good". The celebrity chef Jamie Oliver recently announced plans to convert his ailing restaurant empire into such a business, which gives profits, people and the planet equal footing.
Today there are 236 certified B-Corps in the UK, an increase from just six companies in 2014, while globally there are more than 3,000, boasting a combined turnover of $67bn. And while even socially-conscious businesses on the way to becoming B-Corps could still benefit from working with charities, Kail warns that they can have less of an incentive to collaborate. "Corporates that are socially-minded can be slightly less interested in working with charities, because they feel like they’re doing that ‘good’ in their own business," she says.
"They don’t necessarily see what a charity can bring to that. In those instances, charities need to make a stronger case as to why they need to work with the business."
When partnerships save lives
Where charities and corporations are willing to work together strategically and unite behind a common mission, partnerships have been shown to go far beyond traditional fundraising and skilled volunteering models. When Save the Children UK partnered with the global healthcare company GSK in 2013, the main aim of the relationship was to help families – particularly mothers, babies and children – to lead healthier lives. Both sides committed to working beyond the traditional corporate-NGO partnership model.
The first five years of the partnership saw more than £3.3m fundraised by GSK employees alone (a figure that was matched by the company). And the strategy-focused partnership had other significant benefits. For example, GSK’s expertise drastically improved supply and procurement management, saving more than £300,000 in costs for the charity that can be redirected into the charity’s other programmes across the world.
Sayyeda Salam, business director at Save the Children UK, says that a key reason for the partnership’s continuing success is how deeply it is embedded in the DNA of both organisations. "If you go to GSK House, you’ll see Save the Children everywhere," she says. "Its employees are really engaged with it and they do all sorts of fundraising.
"They’ve done some work around things such as procurement and logistics, bringing in a highly skilled volunteer base from which we really benefit. We have also worked with its R&D department, looking at how we could combine what we know about what works in the health space with GSK’s formidable R&D capability."
One of the most profound outcomes for this research-led collaboration was the introduction of an innovative gel, chlorhexidine, which has saved thousands of lives in developing countries. In 2012, the UN said chlorhexidine had been an overlooked "life-saving commodity" that could save 422,000 neonatal lives over five years.
In response, GSK staff worked to convert Corsodyl mouthwash into a gel that could be applied to the umbilical cord during births in low-income areas across sub-Saharan Africa. Now 30,000 newborns in Kenya have had access to the life-saving formula.
There are arguably reasons for charities to hesitate over aligning themselves with some corporations, whether financially or in a more multifaceted way. Some will argue that it can contradict their core missions or implicate them in any negative action taken by the organisations. But the wildlife charity WWF UK, whose income from corporate partnerships rose by £2.9m in 2017/18, from £4.5m to £7.4m, wholeheartedly advocates for the benefits gained from teaming up (see right).
"We need to work with businesses," it says in a written statement. "They may be one of the main drivers of environmental damage, but they offer enormous potential to change things for the better. After all, their future success depends on a healthy planet."
In recent years the charity renewed a water programme with the banking corporation HSBC and launched a partnership with Sky aimed at developing marine protection areas in the UK and other parts of Europe. Its collaboration with the supermarket Tesco was established to reduce food waste and restore the farming sector to produce more sustainable produce.
One of its most successful initiatives to date is its shared mission with the global food and drink company Unilever to tackle deforestation, which was launched in 2015 as a one-year project to protect a million trees. The success of the initiative resulted in the extension of the partnership and the 2018 accounts show that 28 million trees were protected in three years, a huge increase on the 2015 target.
"Our strategic partnerships involve working closely with companies, their staff, customers and other stakeholders," the charity says. "We provide them with expert guidance, support and inspiration in the fight for our world."
The relationship is valuable to the company: the partnership contributes towards Unilever’s three "big goals" in line with the UN’s Sustainable Development Goals, looking to improve health and wellbeing for a billion people, reduce its environmental impact by half and enhance the livelihoods of millions of people between 2020 and 2030.
According to NPC’s Kail, charities could benefit more – financially and otherwise – if they were clearer in expressing their needs to their corporate partners. But when dealing with a huge company such as Unilever, the usual problems with hierarchy can arise.
"Our corporate clients often say that this has come from the top, that the chief executive is very committed," she explains. "But then it’s also gone through the finance department, the HR department and probably the marketing department, and they all have different aims. Then it will have landed on the desk of somebody who is known in the company for being socially minded, who has another aim again, and it now has four different paymasters."
Even a clear mission, she warns, can easily become confused within a large organisation. Particularly for smaller charities, navigating the right working relationship can be tricky. Getting the power balance right is crucial to a successful partnership, but can be difficult to navigate in traditional funder-recipient roles.
Kail adds: "You’ve got your normal funder-charity power dynamic, which is always a little bit difficult to deal with, but I think it’s made worse by the fact that neither party here really understands the other one."
Understanding is crucial
Corporates often fail to understand how charities function, she says, because it’s rare to have full-time members of staff working with charities. As a result, managing partnerships can become "a sort of ‘edge-of-desk’ job for someone who doesn’t really understand what’s going on".
Understanding how each business model works is crucial to securing a long-lasting relationship, but this is something research has shown is lacking between corporations and charities. A 2015 report by the consultancy Three Hands said half of charities felt obliged to take on employee volunteers, even though they didn’t really need them. "In a good partnership the power balance should be relatively even," Flack says. "The charity is the expert in what they do, and that doesn’t matter if you’re Cancer Research UK or a small charity working in a community.
"The charity is the expert on the social cause, so it’s important that charities are confident with that and really back themselves when dealing with a corporate.
"Obviously there’s a financial mismatch, but I think lots of charities need to realise just how much benefit they are giving a corporate in that partnership and be confident enough to run with that when speaking to the corporate."
For Salam, having the courage to express yourself honestly is the most important point. "If something doesn’t align with our ethics or donation-acceptance policy, or if things change and the partnership becomes unsustainable, it’s not strategic any more," she says.
"You need both the continuity plan to be able to withdraw but the courage to say no, at first, if it’s not the right fit."
As Flack points out: "I think the days of ‘here’s some money, go and do something nice with it’ are probably coming to an end. Future collaborations are not going to be about partnering for a donation every year, but partnering to hit what the charity is doing in terms of achieving the outcome it is looking for. If the partnership leads directly to more of that, that’s where the strongest partnerships are."
Parley & Adidas: A perfect fit
Since the Adidas-Parley partnership was first launched in 2015, the collaboration has kept more than 2,800 tonnes of plastic waste out of the oceans and raised awareness of the environmental threats caused by ocean pollution on an international scale.The trainers themselves – "turning a threat into a thread" – are created from upcycled marine plastic waste gathered from remote islands, beaches and coastal communities, and shipped to Parley’s supply chain partners, who shred and rework the materials into a polyester yarn. The resulting Parley Ocean Plastic is fashioned into Adidas sportswear, with the brand producing 11 million pairs of upcycled marine waste shoes this year, an increase from five million in 2018.
But it’s not just about flashy, environmentally conscious gear. Parley’s "number one mission", according to founder Cyril Gutsch, is to raise awareness of the dangers of endemic plastic pollution in the oceans, and the partnership has gone a long way towards both spreading the word and embedding best practice into its own initiatives.
Adidas adopted the environmental network’s "AIR" (Avoid, Intercept, Redesign) strategy for reducing plastic use across multiple aspects of its business, scrapping plastic bags from its stores worldwide in favour of responsibly sourced paper and banning single-use plastics from its offices. The partnership is also working to educate and empower different communities to join the fight, with Adidas’s annual Run For the Oceans event set up to empower and educate young people about the plastic problem. Funds raised in the 2019 RFTO have gone towards the development of a global youth activism platform hosted by Parley, with Adidas contributing $1 to the not-for-profit’s education initiatives for every kilometre run, up to a cap of $1.5m dollars.
Additional reporting by Liam Kay