Ten Ideas for How the Trump Administration Can Improve Public-Private Partnerships
December 12, 2016
Some people worry that a Trump presidency means an end to large social, environmental, and international development programs, but does it mean an end to progress in these fields? Republican administrations often let private, voluntary action take the lead over public regulation and legislation, which could usher in a new wave of social innovation and public-private partnership. But should it?
With a new American presidential administration poised to take power, we want to take stock of the abundance of public-private partnerships (PPPs) and “ collective impact” programs that have emerged in the past decade. We’ve conducted an extensive review of the literature and interviewed numerous executives across the public, private, and civil sectors to answer that question and have come up with a list of recommendations for the incoming administration. But first, a little history.
In 2006, Harvard Business School’s Michael Porter and FSG’s Mark Kramer rocked the business and philanthropy worlds by introducing the concept of “ shared value.” They argued that companies can engage in corporate citizenship and create social or environmental benefits if it also serves long-term business interests. Contemporaneously, companies, civil society, and governments began collaborating more and more to tackle difficult challenges.
Within the field of international development, the U.S. Agency for International Development (USAID) started using the Broad Agency Announcement (BAA) process to cocreate new approaches to tackle problems facing the environment and poor and vulnerable communities. Under the Federal Acquisition Regulations, the BAA offers a procurement tool for sourcing innovative solutions to difficult development challenges. The BAA streamlines the traditional Requests for Proposals (RFP) mechanism and is open to all, including the private sector, educational institutions, and nongovernmental organizations (NGOs). Organizations submit three- to five-page statements of interest in response to a BAA; those with merit are invited to the next stage to cocreate and codevelop a concept paper with other organizations. An expert panel and the contracting or agreement officer then reviews these concept papers. Organizations that successfully make it through all stages enter negotiations for a final award, which often translates into participation in a PPP.
Since its first convening around the BAA, USAID has cocreated over a dozen new approaches to challenges, including combatting wildlife trafficking, improving the lives of children in institutional care, and creating more sustainable access to water, sanitation, and hygiene in the developing world. The BAA enabled USAID’s Grand Challenges program.
These approaches challenge traditional development models, including the rules-bound approach to managing donations, in a powerful way and can yield more sustainable development outcomes with greater community buy-in. Participants say that a tremendous amount of learning occurs when both beneficiaries and others who touch the problem work together. They speak about the power of developing a deep shared understanding of the problems before jumping into specific solutions, which often end up only addressing symptoms instead of underlying causes.
After interviewing dozens of partnership practitioners—executives from across the public, private, and civil sectors who have helped fund, implement, or manage public-private-civil collaborations—combined with our own direct experience over two decades, we have concluded that only a narrow set of problems actually warrant these kinds of collaborations. For the next director of USAID and for those who hope to partner with the agency, we offer the following 10 recommendations:
- Cocreate and collaborate on multifactorial, adaptive problems—those that have multiple, poorly understood causes, multiple possible solutions, and require multiple stakeholders to solve them. Most problems in the world are technical in nature, with well-understood causes, a few direct solutions, and require only the power and authority to implement them. These problems do not require cocreation or collaboration to solve. Welcome players that come seeking a new understanding of the problem and willing to cocreate more effective solutions. Beware players disinterested in learning; just seeking more money for their existing programs.
- Get clear on terms. “Partner” and “cocreate” get thrown around a lot. Don’t confuse a customer/supplier relationship with a partnership. A true partner shares a stake in the outcome and has real “skin in the game.” And while not all partners are equal all the time, they can operate on something of an equal footing with each other. True partnerships start with cocreation and rely on it throughout. Continuing to work on the partnership is critical for amplifying impact, yet many actors underinvest after the initial stage. Common data and measurement frameworks drive better work, outcomes, and sustainable impact.
- You can have too much of a good thing. If you can solve a problem alone you should. If you need partners, involve the fewest possible to get the job done. Collaboration brings transaction costs and the more partners, the higher the costs. Remember: this is a new process for everyone, including the donor/government. Coming up this steep learning curve costs time and money—which some players may not be able or willing to pay. Be prepared if some players have to back out.
- Government should only lead if it brings something really special to the party. Public-sector donors should usually follow as a second- or third-round funder, not the first money in, unless their presence allows something to occur that would not occur without them.
- Nonprofit does not mean noncompetitive. Civil society organizations (aka nonprofits or nongovernmental organizations) can and do compete for funds. Cocreation and collaboration can occur best in fields with either numerous niche specialists who don’t directly compete with one another or with lots of competitors who are used to “coopetition”—having to regularly team up and combine to win work. Collaboration and partnership often fail when they involve oligopolies—a few dominant players who jealously carve up an ever-shrinking pie of funds.
- Form should follow function in funding and procurement. The procurement mechanism (the legal agreement among the parties) and the funding mechanism (the method by which funds flow from donor to grantee to subgrantees) should derive from the programmatic needs—not the other way around.
- The program and procurement officials must have a strong relationship. She who defines the programmatic needs on the part of the donor or government and he who runs the legal and procurement process must share a common understanding of the process, equally value the role of partnerships and collaboration, and feel comfortable with chaos and ambiguity.
- The process takes work. One of the primary values of cocreation and partnership comes from the ability to get new thinking and new players to the table. This takes a lot of work. Involving the private sector takes figuring out who within which specific organizations will care and involving them at the beginning—not dragging them in as an afterthought or in the hopes of squeezing them for cash. Smaller players need a leg up, especially if they do not understand the vagaries of government procurement. And communications are critical, especially for new players who will often not understand the “unspoken rules” or embedded traditions of the process.
- Find your backbone. Most people in a partnership will want to work “in” the partnership, getting down to doing the work. At the same time, someone needs to hold the center, working “on” nurturing the partnership itself. In many partnerships, and especially those with partners from different sectors, there is need for a starter/convener, facilitator, and backbone organization. The backbone takes ongoing responsibility for ensuring the partnership stays together, helping the different parts work together so they provide more value than each of them acting alone, and sharing data and learning across the different organizations.
- Profit is not a four-letter word. The private sector is almost always a key stakeholder in cocreation—the ultimate sustainable solution is a market-based one. However, the public sector and NGOs can sometimes be wary of private-sector involvement, fearing that business may benefit from philanthropy. Companies should consider their involvement as a long-term investment in building markets where they do not exist, and NGOs and governments should embrace the fact that a successful philanthropic program could give way to a commercial solution. Profit is not a four-letter word, and private-sector partners should be engaged from the start so that interests align for shared value.
Ultimately, cocreation has the opportunity to break the cycle of well-intentioned but misdirected philanthropy and thread the needle to create true shared value. To ensure that cocreation accomplishes its goals, though, potential cocreators should:
- Carefully choose problems and cocreate judiciously;
- Bring potential cocreators, especially the private sector, to the table early and often;
- Be transparent about the length, breadth, and cost of the total process;
- Invest in data and measurement; and
- Remember that market-based solutions are the most sustainable ones.
Not all problems are right for cocreation and partnership, but those that are have much to gain from the process—namely greater community buy-in and more sustainable solutions to some of the world’s trickiest development challenges.
Richard Crespin is CEO of CollaborateUp and a senior associate of the Project on Prosperity and Development at the Center for Strategic and International Studies (CSIS), both in Washington, D.C. Helen Moser is a fellow with the CSIS Project on Prosperity and Development.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
© 2016 by the Center for Strategic and International Studies. All rights reserved.Photo credit: STRINGER/AFP/Getty Images