Why ‘trust-based philanthropy’ is key to effective cross-sector humanitarian partnerships

Ahead of September's International Day of Charity, we are examining how to build effective business-charity partnerships, speaking to leaders within the humanitarian and private sector who have forged successful collaborations.

In this article, Eric Berseth, Co-Founder and CEO of Philanthropy Advisors (PA), sets out the trends seen in the philanthropy landscape, and how businesses can forge more strategic and effective humanitarian partnerships.

MB: What has been the impact of the pandemic on humanitarian organisations, and how have you adapted to the changing environment?

EB: In our daily work with clients and partners we have observed an acceleration in the following trends:

  1. Leveraging smart technology → As a result of the pandemic, a lot of non-profits had to embrace technology if they wanted to continue implementation, including adopting smart technologies. From introducing chatbots designed to build more meaningful engagements with beneficiaries and donors online, to testing the use of AI to accelerate theory-based content analysis, there are a growing number of humanitarian actors who see the potential of smart tech to scale their impact as well as their fundraising efforts.
  2. A shift towards localisation → The pandemic acted as a catalyst, accelerating this much needed shift. Faced with international staff reductions and travel restrictions, many international organisations had to rely on local partners to implement their projects. As a result, our clients and partners have accelerated the incorporation of local and participatory approaches into their strategies and ways of working. However, for this trend to endure, funding to local organisations needs to increase as well. 
  3. Greater cross-sector collaboration and partnerships → On the one hand, the pandemic highlighted how essential private sector contributions are to humanitarian emergency response and recovery. On the other hand, more and more companies and foundations recognise the business value of engaging in humanitarian action.


MB: How has private sector engagement in humanitarian issues evolved over the last few years?

EB: Over the last few years, we have witnessed the private sector mobilise unprecedented levels of flexible funding in response to humanitarian emergencies. Over 800 leaders in philanthropy signed the Council on Foundations’ Covid-19 Pledge to reduce grant-application processes and increase levels of unrestricted funding, thereby making it easier for non-profits to access and allocate funding where needs are greatest.

When it comes to the scope and objective of humanitarian engagements, businesses are moving towards more strategic and proactive relationships. A recent report by the Global Reporting Initiative (GRI) found that four-in-five companies assessed worldwide include a commitment to the SDGs. While some companies and foundations are seeking to leverage internal competencies for the benefit of cross-sector partnerships, others are looking to create opportunities to involve people across their organisation and supply chains. Moreover, engagement in humanitarian issues is being discussed at the highest level by CEOs and executive teams.

However, more work can be done to set “SMART” (specific, measurable, achievable, relevant, and time bound) objectives so action and commitment are linked. The GRI report also found that less than half of the companies set measurable targets for how their actions contribute to fulfilling the SDGs. 


trust-based philanthropy

Eric Berseth, Co-Founder, Philanthropy Advisors


MB: Where are the biggest opportunities for businesses to support humanitarian organisations?

EB: The corporate philanthropy landscape is changing with an increasing number of donors and partners simplifying and streamlining access to funding and favouring flexible funding. This is an opportunity for the private sector to embrace what is known as “Trust-based philanthropy”: to start building relationships with non-profits based on mutually shared values and objectives, to create a culture of transparency around failure and to encourage greater impact visibility. 

There is also great potential to bring about systemic change by investing in collaborative and pooled funding models. These funds are an opportunity for private donors with a common interest to learn from one another and explore new ways and initiatives to create large-scale impact. We believe at Philanthropy Advisors (PA) that by pooling resources together and using them to tackle one institutional issue in a focused and in-depth way, as illustrated by Co-Impact, we stand a greater chance of creating impactful and lasting change.    

Furthermore, supporting grass-root organisations, especially those that have innovative and scalable projects, and investing in their innovation capacity, will lead to amplified outcomes and more sustainable solutions at local level. Even though this approach takes more time and effort, the benefits are worth the risk.


MB: What examples have you seen of successful private sector partnerships, and what made them so effective?

EB: In the past two years, we have witnessed and engaged in several successful partnerships. Among those that come to mind:

Born out of necessity in March 2020, the Covid-19 Solidarity Response Fund (SRF) raised USD $256, 858, 860 in funding to support the World Health Organisation (WHO) and its partners’ response to the global pandemic. The crisis has affected everyone and the creation of the SRF allowed individuals and businesses to take their part in the fight against the pandemic. This was a single pooled fund limited in time that aggregated private donations, mostly from businesses, for a very specific objective. This made it possible for the WHO to allocate resources in a timely manner where they were most critically needed. 

An international cosmetic company and its Foundation, which support women and girls worldwide, created a large endowment fund during the pandemic. What differentiates the Fund from the Foundation is its focus on grass-root organisations and flexible funding. This innovative approach helped local actors survive the pandemic and was key in upholding the broader ecosystem around gender equality.       

Another example of an innovative partnership is the ICRC’s Humanitarian Impact Bond (HIB). Private and public actors collaborated with the ICRC to create this unique financing mechanism and fund three rehabilitation centres in Nigeria, the DRC and Mali. Today the centres are 9% more efficient than the benchmark centres. High levels of trust and collaboration between all parties combined with a shift in risk and an incentive to innovate rehabilitation services were all essential ingredients in the HIB’s successful implementation. 


MB: What advice would you give to small businesses, looking to work with a charity, or NGO, but having limited resources?

EB: Back in 2019, PA participated in the World Economic Forum and engaged in discussions around success factors for enabling sustainable partnerships with two dozen representatives across private and public sectors. Based on these interviews and PA’s experience, here are three insights: 

  1. Business rationale and value added → There are multiple business rationales as well as models for companies to engage with the non-profit ecosystem. It is important to determine from the onset how working with a charity or NGO can create value for the business and what the business can provide to its partner(s) such as employees’ time, services and products that can contribute to social impact.   
  2. Mission alignment and impact monitoring → It may sound obvious, but one of the biggest barriers to effective and sustainable partnerships remains the lack of delineation, in advance, of common objectives and a monitoring plan to assess them. 
  3. Time and patience to build a strategy → In order for partnerships to truly have an impact, this requires time. When two or more actors come together, there is a need for understanding and acknowledgement of the differing organisational structures and processes. Hence the necessity to develop an engagement strategy.




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