May 6, 2003
An important driver of NGO-business partnering in Canada has been industry's heightened interest in sustainable development. However, an additional factor which has served to bring the two sectors into closer alignment has been funding problems in the NGO sector. Cutbacks in Canadian government spending during the early 1990s left NGOs with a smaller pot of public money from which to draw.
Not all NGO-business relationships are centred on money, though. Monte Hummel of WWF Canada points to dozens of deals brokered with the corporate sector by WWF and other groups to help conserve habitats. But as Paul Griss, co-ordinator of the New Directions Group, notes, most NGOs have been unable to raise the sums of money they need from the public, and are increasingly looking to the corporate sector funding.
Indeed, several organizations are scaling back their membership, or at least trimming back their canvassing activities targeting small, individual donors. Keith Stewart of the Toronto Environmental Alliance explains that monies raised from door-to-door canvassing often went right back out to pay the canvassers.
Griss points out that in such a tight funding climate, some NGOs have realized that the private sector is where the real money is. He believes private-sector funding can play an important role in building the capacity of NGOs. 'If an NGO comes to the table, we may be able to contract some research out to them,' he explains.
Griss insists that this arrangement need not compromise the NGO. Decisions about disbursement of corporate money are taken by the New Directions Group (see case studies) at 'arm's length' from the corporations that fill the group's coffers.
Nevertheless, despite the enthusiasm of NGOs to work in a more collaborative way with the corporate sector, NGO representatives are typically wary about relationships predicated upon a financial arrangement. Even those who insist that corporate funding does not neuter NGOs are sensitive about the proportion of corporate 'filling' in the funding pie.
Ken Ogilvie of Pollution Probe stresses that NGOs should not become hostage to the aspirations of those from whom they are receiving their money. Accordingly, Ogilvie strives for diversity in his funding base, with 25% of the money coming from governments, corporations, individual donors and foundations.
Other groups are even more circumspect. Julie Gelfand, Executive Director of the Canadian Nature Federation, agrees that CNF's independence from corporate funding - just 5% of its budget - means it can afford to be 'more sceptical'. By the same token, she is concerned that groups such as Pollution Probe may be 'too closely aligned' with industry.
WWF Canada has traditionally enjoyed good relations with the corporate sector. Monte Hummel pioneered the practice of appointing business people to his board of directors, and WWF has forged an wide range of relationships with corporate partners. These include marketing relationships with media and other sponsors, sizable donations to support advocacy work, and licensing of WWF's famous panda logo. Hummel lays down a challenge to his critics: 'Show me a single decision that has ever been improperly influenced by a relationship with a corporate donor.'
Nevertheless, even where corporate funding of NGOs cannot be shown to have influenced decision-making, such arrangements are not without their complications. Occasionally NGOs can find themselves caught in the crossfire between corporate competitors. Hummel explains that WWF Canada has tended to avoid giving product endorsements, because it lacks the expertise to fully analyze the merits of competing products - and companies are quick to pounce when an NGO aligns itself with one of their competitors.
In this context the experience of the Ontario Clean Air Alliance is instructive. Not strictly an NGO, the Alliance is a diverse coalition of cities, environmental groups, public utilities and interest groups devoted to one objective: the elimination of the five remaining coal-fired power plants from the province of Ontario.
Although the Alliance draws three-quarters of its funding from charitable foundations, it has faced some criticism for accepting money from natural gas and wind energy industries, which stand to benefit financially from a phase-out of coal..
But Jack Gibbons, chairman of the Alliance, dismisses such criticisms. 'We are up against the biggest polluter in the country [Ontario Power Generation] so we can use all the help we can get,' he argues. Gibbons notes that NGOs are frequently subject to criticism that their lobbying could benefit one company or sector at the expense of another. But in his case, he says, hard science backs up the Alliance's position.
Besides, the coalition is receiving funding from such a wide variety of sources that it is hard to imagine any particular one will receive special treatment, he adds Nonetheless, Ontario Power has rounded on the Alliance's financial ties in an attempt to counter the Alliance's lobbying efforts. A healthy debate is ongoing among NGOs as to which type of corporate funding arrangements afford them the greatest degree of autonomy. The following section reveals how NGOs are searching for funding relationships which preserve an organization's credibility and independence.
More Information on NGOs
More Information on NGOs and Funding
More Information on NGOs and Business
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