One NGO’s journey to big impact through smarter corporate partnerships.
When it comes to social change, large companies can bring the resources needed to make it happen in the long term. Pact is an international NGO (INGO) that knows this well: In 2009, CEO Mark Viso challenged his 38-year-old organization to augment traditional funding with corporate partnerships, while leading an organization-wide emphasis on innovation and social entrepreneurship. At the time, for a mostly U.S. government-funded INGO like Pact, these new corporate shared value partnerships had the potential to maximize their impact around the world.
But as outlined in our recently published case study, Pact’s reorientation around corporate partnerships required a significant shift to both high-level strategy and overall organizational structure. A shift in which the INGO is familiar: In 1998, Pact restructured to create Pact Institute, which focuses on organizational innovative capacity and funding diversification. In 2009, it was the Institute – led by then-President John Whalen – that received this shared value challenge from the CEO.
As leaders of all industries know, this kind of transformation does not happen by accident or overnight. Here to tell the story of this intentional and complex change effort – implemented in an organization operating in over 30 countries – are the people who made it happen on the inside.
The following leaders at Pact contributed to this roundtable discussion:
Mark Viso, President and CEO
John Whalen, President, Pact Ventures (formerly President, Pact Institute)
Kurt MacLeod, Vice President, Asia Eurasia
Blakey Emmett, Senior Director, Corporate Engagement
What sparked Pact’s organizational shift toward shared value partnership? At the time, what did you see as the main benefits of corporate partnership over government funding – and how has that changed in recent years?
Viso: At Pact, we wholeheartedly believe that a world where poor and marginalized people can exercise their voice, build their own solutions and taken ownership of their future is possible. Everything we do is in service of them and delivering on our promise of a better tomorrow. We felt obligated to explore every possibility for delivering on that promise, which is why we undertook this change within the organization. It was a strategic shift that would allow us to be more flexible and nimble in responding to the needs of the communities around the world where we work. Without question, today, we’re a stronger and more impactful organization because of the changes we made.
Whalen: The 2010 strategic shift enabled Pact to generate some important reliable annual flows of unrestricted funds. Pact and Pact Institute then reinvested those funds into critical business areas like innovation, productization, social enterprise development, and knowledge management—areas that are often difficult to fund with donor project funds. This infusion of internal investment has built out critical new skillsets and capacity while positioning Pact for growth and increased impact in its work. In short, Pact Institute was a crucial investment in enabling Pact to become a more effective 21st century INGO that increased its social impact (with new donors) and improved Pact’s overall business sustainability.
MacLeod: For decades Pact has seen the private sector as a critical player in helping us achieve our mission and likewise in Pact helping the private sector achieve theirs. Pact’s entry into partnerships with the private sector began through philanthropic and corporate social responsibility relationships. True to Pact’s desire to play an equal partnership role, over time we viewed our private sector relationships as not just a means through which we could positively impact families and communities at the local level but also leverage to positively influence the policies and procedures of our private sector partners around issues of social and environmental safeguards, human rights and community relations. Our tenure as the NGO chair in the Extractive Industries Transparency Initiative (EITI) attested to our commitment to go beyond traditional private sector/NGO relations and influence the sector as a whole. Our foray into addressing value chain challenges for mining companies wanting to adhere to the Dodd-Frank ‘conflict-free minerals’ legislation advanced our work with the private sector to add shared value partnerships that has gone on to positively impact tens of thousands of lives in the Great Lakes region of Africa.
What were the key elements to driving the successful organizational and strategic shift for Pact with Pact Institute?
Viso: One of the key elements to success has been maintaining cohesion between Pact and Pact Institute. We are all one Pact. We have the same mission—to help the poor and marginalized realize a better tomorrow. It has been an important point for us all to keep in mind throughout the shift. It is one thing that has allowed us to be successful. Pact Institute is an important mechanism that allows us to creatively pair our assets and knowledge with the power of the private sector. But at its core, it is still Pact.
MacLeod: Political will at the top of the institution echoed by a commitment by our major business units, country offices, has been the driving forces behind Pact’s success with private sector partnerships. Pact takes a holistic approach to our corporate relations through developing deep roots at the area of impact (in the countries where both the company and Pact work) as well as throughout the various and often complex levels of engagement in the corporates’ structure. We are an honest steward of corporate resources and have frank and strategic conversations with our partners to ensure that they are well informed of our project actions as well as providing necessary information that allows both Pact and our corporate partners to evolve the project activities to better achieve the changes we envisioned in the people we work with at the local level. This engagement has been particularly strong at Pact’s corporate, regional and country levels.
What challenges or hurdles did you encounter throughout the implementation process with Pact Institute that have led to greater organizational learning and development?
MacLeod: Pact Institute’s model has been based on deeply understanding the client, exhibiting flexibility in agreement terms and reporting, and maintaining relations at all levels within the corporation. Pact Institute has placed the Country Office and regional vice president in the driver seat of relationship building and maintenance with our corporate partners. Our due diligence standards could be stronger and more uniformly implemented which would help ensuring we are entering into corporate partnerships that are mutually beneficial and ultimately helps Pact achieve our vision of the future.
Looking ahead, how do you see the landscape evolving for shared value partnerships in the next 5 years, and how are Pact and Pact Institute positioned to be a leader in this space?
Emmett: I envision more and more shared value partnerships, as companies continue to seek out new markets and new products and work in tandem with NGOs to do exactly that; innovation, coupled with the desire of corporate and NGO leaders to expand social impact will help to drive these partnerships. Perceptions and misconceptions of and between corporations and NGOs will continue to evolve, and I see increased recognition of the value of cross-sector experience, which will be demonstrated by the hiring of multi-sector “athletes” who understand the needs, desires, strengths, and limitations of each sector and how to bring disparate parties together for transformational partnerships. Those organizations that can capitalize on the fourth sector, where these multi-sector athletes will be able to optimize the strengths of each sector, will be those that survive and thrive. The flexibility of Pact, demonstrated already in the accomplishments of Pact Institute and in new ventures the organization is investigating, will continue to be an important part of the success of our organization—an organization that never settles for the status quo and understands how flows in capital and needs of businesses and stakeholders can be best utilized to improve the lives of those in need.
For more on Pact’s journey, read the case study: Pact: Innovating organizational structure to facilitate shared value partnerships.