By Doug Pinkham
Public Affairs Council President

June 9, 2010

The Gulf of Mexico oil spill, which caused 11 deaths and continues to devastate the surrounding environment and local economies, will profoundly change how energy companies drill for oil and natural gas. But it may also change how and when corporations partner with non-governmental organizations (NGOs).

Last month, the Nature Conservancy - the nation's largest environmental organization by assets and revenue - faced criticism when supporters learned BP was a major financial supporter. According to the Washington Post, the Conservancy not only has accepted nearly $10 million in cash and land contributions from the company and its affiliates, it also gave BP a seat on its International Leadership Council. Among other projects, the group has worked with BP and government agencies to mitigate the environmental effects of drilling operations in Colorado and Wyoming.

Although the Conservancy had publicly disclosed this relationship, the massive oil spill resurrected a debate that has gone on for years:  Can an NGO partner with industry without selling out?

The Conservancy believes such partnerships will help society in the long run. "Obviously, working with companies is controversial," said Nature Conservancy President and CEO Mark Tercek in an online chat the day after the Post article appeared. "But I believe it's a conservation strategy we should not abandon. Companies like BP are conducting their business in places we care about. We simply cannot ignore that reality."

The Conservancy, along with groups such as Conservation International, represents the most pragmatic wing of the environmental movement. Some NGOs, such as the Environmental Defense Fund, still partner with companies on select projects, but don't accept corporate donations. On the far side of the spectrum, Greenpeace, the Rainforest Action Network (RAN) and others are more confrontational. ("Environmentalism with Teeth," says the tagline on RAN's website.)

In Tercek's view, there's plenty of room for everyone. "The way I see it, the environmental community is vast, with hundreds of organizations employing a wide range of approaches and tactics. There are organizations that accomplish a great deal through lawsuits and others that bring about meaningful change through boycotts and other market campaigns. And, there are organizations like ours that focus on on-the-ground, science-driven conservation action. Every approach has merit and is important."

Nevertheless, the Gulf oil spill has made NGOs of all types reassess their corporate relationships. "When a major corporate sponsor is seen as a bad actor, it can bring into question the charity's reputation as well," wrote Dean Zerbe in The Chronicle of Philanthropy. "The charity and its board need to respond quickly and aggressively to protect the charity's reputation and charitable mission."

The Economist argues that "BP's travails illustrate the limits of enthusiastic corporate citizenship" because certain companies, including natural resource firms, can never be completely free of environmental problems. Partnerships that address supply-chain issues are more likely to be successful, says the magazine. Good examples include Wal-Mart's sustainability program for suppliers and Coca-Cola's campaign to increase access to safe sources of water in developing countries.

Companies, too, are trying to determine what makes for a winning NGO partnership. Erik Wohlgemuth of Future 500, a firm specializing in forging alliances, believes partnerships are most effective when the NGO proposes them, which encourages the group to be more vested in a successful outcome, and when the partnership makes the best use of a company's core strengths.

In addition, he writes in Future 500's blog, partnerships emerge as corporate executives and NGO leaders build trust by getting to know one another informally: "Corporate engagement practitioners should continually strive to humanize their companies' NGO relationships, seeing the individuals within NGOs rather than seeing NGOs as monolithic organizations."  

A new Public Affairs Council Tip Sheet provides advice on working effectively with NGOs domestically and internationally. As the tip sheet notes, companies should consider reputation and credibility when they assess outside groups. Among other suggestions:

• Both parties should be clear on what they hope to achieve through the success of the project, and discuss in advance where potential issues or disagreements may arise.
• To maintain independence, it should be understood that a direct partnership will not limit either organization's policy stance on issues outside the specific agreement.
• Funding responsibilities must be clear and transparent to ensure accountability between partners.
• Project outcomes should be measured (and therefore measurable) as well as communicated.
• Have a mutually agreed upon communications plan specific to the project for proactive and reactive media relations, including a crisis plan as appropriate.

Because of its size and reputation, the Nature Conservancy will certainly survive the controversy over its affiliation with BP and will continue to pursue corporate partnerships. As Tercek puts it, environmental threats are so great that "We cannot afford to write off any strategy, including getting companies to improve their business practices."

But you can bet the Conservancy will keep its eyes wide open as it considers future alliances to ensure they are strategic, transparent and demonstrably effective. Corporations should do the same.

Comments? Email me at http://pac.org/contact/blog.