CSR: Finding a Local Partner in China

Friday, October 20, 2006 6:03
Posted in category Invest in China, The Big Picture
Comments Off on CSR: Finding a Local Partner in China

More so than ever before, multinational companies have the ability to put together comprehensive CSR programs in China that leverage the core ideas and programs of headquarters to have a measurable impact on the community. For the last 10 years, corporations have been focused on finding economic stability in China. For some that was establishing distribution channels while for others getting suppliers to meet standards was the critical focus.

Understandably, this left little time or attention for the construction of or focus on CSR programs in China, even if they were well established in home markets. Couple these organizational needs with a higher level of difficulty of constructing programs (see: NGOs defined in China) and you had underdeveloped programs in China. With many companies now stable, CSR has become a focus in China. Improving community outreach programs have been the most visible due to their high PR value, and there have been a dramatic increase of personnel responsible for CSR filled in Shanghai in the last year alone. As with everything in China, taking baby steps is the best way to go.

There are numerous differences between establishing programs in China and the U.S, and for companies that have only recently stabilized in China, it is important to understand this. Finding an organization, big or small, to work with can be difficult and time consuming for many, and depending on the scale of the program, partners may be few and less than ideal. China, while having “nationwide” programs through GONGOs, is still missing a critical mass of privately run organizations that can truly operate nationwide.

For companies that are just starting the process, it is recommended that a partnership is identified with an organization that, even if small, can be trusted and will scale in time. Partners of this size can be found in Beijing and Shanghai through the Chambers of Commerce, Embassies, or through word of mouth.

Following some basic research and due diligence (yes, you should perform due diligence on charities) to understand their programs and how they match your objectives, approach them to learn more. Many NGOs (local and international) are NOT registered as NGOs, but as businesses, and many are not registered at all. This is not necessarily a red flag, however knowing this ahead of time is important as companies choose their partners (unlicensed organizations will have scalability problems, and may not be able to offer the same amount of PR support).

Many charities will immediately look to understand the financial side, and that is something systematic in China as that has been the typical history of involvement by many MNCs. However, MNCs should try to shift the focus from financial contributions to building a complete platform by learning more about volunteer programs and expressing interest in these programs.

Designing a volunteer program is something that should be a primary focus of any partnership. More than anything, it is a risk free way to establish a relationship with an NGO and learn about them. Often times, through these programs, true needs will surface while perceived needs that were presented will fall by the side. There is no better way to see how money, management, and other resources are used, and by viewing this before money has been donated will allow for better management of future donations.

When donating money though, care needs to be taken. Often, tracking money and/ or tracking the results of your money can be quite difficult. For some companies, a feeling of logo loss has occurred as popular organizations have received a lot of attention, and thus little gain is felt. At the same time, when working with smaller organizations, ensuring money is spent properly can be difficult. that is not to say that it is misspent, but there may be little in the way of accounting books or financial controls in place that would be able to produce accounting reports.

Being a force for change and organizational development by working closely with the organization in a capacity building role is one of the most important steps long term. Many organizations are suffering from a lack of professional skills that inhibit not only their program capacity, but also their organizational growth, so showing them how a partnership will improve their organizational development is important.

With the goals of both organizations to benefit the societies in which they operate, building a strong partnership that grows in scale, size, and effectiveness should be the goal of both organizations. Take the time ahead of discussions to lay out the goals of the program and the steps to meet those goals will allow both parties to understand the goalposts and milestones for success.

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