How and Why Companies Partner with Social Enterprises: Key Takeaways

Earlier this year, we interviewed 75 + Corporate CSR, social enterprise, and impact investing leaders about their thoughts on social enterprise growth and inclusion in the global economy. Since we released our findings in the report, Can Capitalism Lead to a More Sustainable and Equitable Future?, we have seen an increased amount of attention on this topic, including some great reports just in the past few months (summaries of which you can find here). One consistent takeaway across the board is that social enterprises should spend less time chasing investors, and more time selling to corporations (and governments) who are increasing investments in “social procurement.” 

These kinds of revenue based partnerships are a win-win: for the social enterprise, it’s a tremendous opportunity to scale impact and revenue, and for the corporation, it’s a meaningful way to invest in supply chain sustainability and commitments to ESG.

Recently, a new report came out called “Catalyzing Collaboration,” based on research from global consulting firm Resonance in partnership with Catalyst2030. Last week, we invited leaders from Resonance, IKEA, & Industree Foundation to discuss the findings of the report (which you can watch in the full recording at the end of this article, or if you’re short on time, skim our summary below!)

The Business Case for Social Procurement

The Catalyzing Collaboration report revealed that corporations are changing their approach to sustainability: more and more companies are seeking to integrate sustainability throughout their “core business”, rather than keeping it siloed as CSR. To do that, they need partners – particularly partners who exist to create social and environmental good, aka social enterprises. Together, they can make entire supply chains and industry more sustainable. 

The following graphic illustrates the main sources of value to corporations of engaging in social enterprise partnerships along the value chain, which include:

1. Developing new markets
2. Creating sustainable products that improve the business model
3. Helping fuel innovation
4. Reducing risk for the company
5. Improving competitiveness and overall brand

Of course, there are challenges: it remains a hurdle for corporations to build internal buy-in, and the ecosystem for collaboration is underdeveloped. But there’s a lot of exciting work happening to bridge those gaps, from our work here at MovingWorlds helping social enterprises build corporate connections through our S-GRID program to the work of organizations like SEWF, Ashoka, Yunus Social Business, Resonance, & Catalyst2030 (to name a few.)

Recommendations for Partnership Development

Based on a series of interviews and in-depth case studies, the report distills 6 key recommendations for developing these kinds of partnerships, including:

1. Tailoring your approach to each potential partner
2. Making the business case clear
3. Having the data to back up your impact claims
4. Having a designated partnership point of contact
5. Building your network
6. Telling your partnership story

As the panelists on our webinar illustrated, at the end of the day, successful partnerships meet the needs of both parties. This is not corporate philanthropy; it’s a business relationship. But as the recent research has found, there are hundreds if not thousands of corporate-ready social enterprises with the capacity to deliver as supply chain partners, and no shortage of corporations eager to differentiate themselves by bringing more social enterprises into their value chains.

Case Study: IKEA & Industree Foundation

A great example of what this kind of partnership looks like in practice is the successful and long-standing relationship between IKEA and Industree Foundation, a social enterprise that helps communities assess their traditional skill base, organize them into production units, develop products that appeal to modern markets, and create consistent demand to create sustainable businesses at the lowest possible costs. Industree Foundation has reached 30,000 women artisans across India and Africa, through collaborative efforts with corporate partners like IKEA. 

You can watch the full recording below for a more in-depth look at how Industree and IKEA have built their partnership, and tips for how your social enterprise can do the same:

In Summary

Social procurement is a massive funding opportunity for social enterprises, and has the potential to shift the entire system around it to become more sustainable in the process. Is your social enterprise seeking to scale impact and revenue through corporate partnerships? Apply to S-GRID. Looking for support integrating social enterprises with your company? Talk to us!