NGOs and companies

When I was checking my inbox recently, I received a piece of news from Oxfam America. This international NGO (non-governmental organization) has launched a new initiative to promote the rights of communities impacted by the oil, gas and mining industries. In a few words Oxfam calls on international oil, gas and mining companies to provide complete and timely information about how their work affects the community, the environment, society, and the economy– as well as how much the natural resource industries are paying the government to remove natural resources. This new initiative is another clear example of how NGOs can place controls on the actions of companies.

However, in the last year I have heard about other forms of relationships between NGOs and firms. One of them is the increasing collaboration between NGOs and companies working together to establish better social conditions for people.

There a number of successful examples. For instance, through its foundation Anglo American plc contributed $50.3 million to the wellbeing of local communities by means of gifts, donations in cash and staff time. Anglo American’s fund in South Africa regularly receives top ranking among its peers from social investment vehicles and NGOs.

AngloGold Ashanti and Rio Tinto plc offer successful stories of their efforts working with NGOs.

In the first case, AngloGold Ashanti’s CSI Fund contributed $1.98 million to 68 projects across southern Africa. In terms of sectors, education received the greatest backing (40%) followed by HIV/AIDS (20%), welfare and development (17%) and skills training and job creation (11%).

Rio Tinto’s case shows that businesses are ready to play a leading role in tackling climate change. Across the group’s operating countries, Rio Tinto is engaged in talks with a range of widely respected NGOs including Resources for the Future, the Pew Center on Global Climate Change, WWF Australia and Conservation International. These are but a few of the thousands of successful examples of good relationships between mining companies and NGOs.

As a volunteer worker for different NGOs, I know in many cases there are problems when corporations pursue social objectives together with NGOs. One problem is time. Company foundations perceive that NGOs’ time is slower than theirs to resolve practical problems. Another important difference is based on financial resources. While company foundations do not have a cash problem, NGOs are chronically under-budgeted.

In addition, NGOs and company foundations do not always speak the same language. For instance, for some people “to support projects” means to design ideas and then hire a group who will put the ideas into practice. However, for others “to finance projects”mean to call different specialized entities and choose the best proposal.

In other cases, the background of company staff responsible for social programs may well be an obstacle. For instance, some firms hire marketers who do not have social agency background and are very oriented to short-term results. They do not know that social changes take time. Another obstacle arises when there is a weak legal framework in the local and regional government. Some foundations and NGOs experience problems when they try to produce social changes in regions where politicians promote welfare programs and boycott NGOs’ efforts.

There are a number of reasons for strengthening this special relationship between NGOs and companies. For instance, companies know that NGOs are able to interpret social needs and trends, while NGOs perceive that without financial support from foundations they cannot work properly. In addition, volunteer workers can learn significantly from NGOs while NGOs can learn from companies how to draw up an annual progress report, or how to achieve management transparency. Last but not least, this relationship can offer to the community real social changes beyond the public agenda, offering long-term public policies.