No longer is the relationship between business and non-profits confined within the walls of Corporate Social Responsibility (CSR).
Collaborations have evolved from a traditional philanthropic nature, to an integrated one. Businesses are redesigning their core processes to assimilate social and environmental impact into every activity.
Companies are tapping into unexplored avenues – unmet social needs, environmental hazards – and creating profitable products that overlap with their own business. A change in the modus operandi, structure, and incentives, results in the growth of the value of the product created, in the economy as well as in society.
The management strategy evolved from the Harvard Business Reviewarticle “Creating Shared Value” (January/February 2011), by Professor Michael E. Porter and Mark R. Kramer.
The Shared Value Initiative (sharedvalue.org) puts it simply –
“Shared value is not about redistributing value created through philanthropy or about including stakeholders’ values in corporate decisions. Rather, shared value focuses on the creation of meaningful economic and social value – new benefits that exceed the costs for the business and society.”
Companies have shifted out of the dimensions of CSR, and into a joint effort with NGOs to deliver sustainable social and economic development in the communities in which they operate. CSV has enhanced the systems of the world’s biggest companies – Unilever, Intel and the Coca-Cola Company.
There is constant needfor innovations and engagement in opportunities that fortify value.
The alliance grows when benefits are generated for both partners. More than money, it is the mobilization of manpower, of knowledge, of personal interactions that builds value.The mutual benefits of such collaborations cannot be ignored, which is why an increasing number of Not for Profit concerns are opting for strategic alliances with companies.
One of the most important benefits of cross-sector alliances is cost saving, as competition for financial resources increases. Sharing of infrastructural and administrative expenses allows these organisations to direct a larger portion of funds towards their main cause.
The culture of both organisations is influenced by each other. A strong discovery ethic is maintained. Projects are developed internally, with leadership support. Since there are high levels of expectation and accountability, a deep trust culminates across organisations.
Once the collaborators understand each others’ capabilities, ideas start to flow. Complementary skills are tapped into, leadership improves.