May 31, 2013
Summary Report

On May 31, 2013, the DI hosted a workshop focusing on best practices in corporate-NGO partnership ‘due diligence.’ The objective was to identify the leading practices in selecting and designing cross-sector partnerships, focusing on the lessons learned and tools/strategies applied by various DI members and invited external presenters. The workshop began from the question, “How do you ensure you have identified the right organization and best partnership model to most appropriately address a common social/economic/environmental challenge?”

Having a clear reason for partnering is important before any formal due diligence steps are undertaken. An organization must establish a vision for partnership that aligns with its own organizational strategy and values. The key is identifying the kind of partnership that best aligns with the mutual goals and vision of the organizations. Internally, organizations need to prioritize and devote appropriate resources to investing in partnerships in line with respective organizational strategies and visions.

Formal due diligence processes are a central part of nearly all partnerships. The due diligence process can be lengthy, but proper steps taken earlier on in any relationship can avoid missteps and pitfalls in the future. Internal and customized due diligence tools and checklists are becoming increasingly common, and are applied to help each party assess the other organization’s profile. Key issues considered in these processes and tools include: the reputation of an organization; the organization’s vulnerability to stakeholders; its ability to manage crises and failures equally as well as success; the role of third parties and other potential partners; the place of internal champions; and, the governance and accountability structures both within prospective partner organizations and within the possible partnership.

There is no one-size-fits-all approach to due diligence. That said, since corporate-NGO partnerships are largely influenced (early on at least) by relationships, the first impressions are critical to establishing the foundation for a partnership. Various strategies can be applied to assessing first impressions, including: (1) holding a series of discussions at each other’s headquarters; and (2) assessing levels of commitment and the nature/style/degree of engagement by the other organization.

In partnerships, it is critical to establish proper governance and accountability protocols to create a stable foundation for the relationship. A highlight here is the importance of information management – controlling the flow of information and addressing confidentiality boundaries in the relationship. Non-disclosure agreements are commonly used as a tool to help parties be open about confidentiality boundaries and concerns and to establish clear rules of procedure.

Equally important in the early stages of a relationship is internal support on all sides. It is a recommended practice to involve individuals from all levels of an organization in the due diligence process. Having many representatives involved ensures that the partnership is institutionalized on both sides, and that it takes into account the many dimensions of the organization that are engaged in the relationship and its common activities.

Finally, due diligence is not a static nor one-time undertaking. It is important to continue the due diligence process throughout the lifecycle of the partnership. A recommended practice is to continuously re-evaluate the scope of the partnership and to identify agreements for new or modified work. Continued due diligence is not merely a risk management strategy; it is also a useful way to allow a partnership to evolve and to become truly transformational, both to the organizations involved and to their shared objectives.