Public-Private Partnerships: Working toward Sustainability

At USAID, we know that ending extreme poverty and building resilient and democratic societies is impossible to achieve through the work of one organization alone. This is why partnering is at the center of our work, and we are continuously looking at innovative ways to collaborate across sectors while also improving the efficiency and effectiveness of our existing partnerships.

We know that working with the private sector, in particular, is critical to achieving our goals both as an Agency and the broader development community. Great ideas can come from everywhere and these types of engagements create innovative, cost-effective and results-oriented development approaches that enable us to accelerate and scale sustainable impact.

At USAID, we are looking at how we can better define this “value add” of partnering and working with the private sector. With limited research in the field, we are looking at how and why partnerships can improve our work – from the role of relationship health in improving development outcomes to the role of partnerships in driving sustainability.

We recently joined forces with Dalberg Global Development Advisors to examine the enduring results of some of our partnerships with the private sector – long-term continuity of partnership activities, outcomes from a partnership, or development outcomes sustained or scaled as a result of private sector commitment. Though not a rigorous, scientific study, we looked at a set of USAID partnerships that ended in the same year, to better understand how the private sector’s involvement may have contributed to enduring results and whether our partners continue to make efforts to advance development objectives after a project ended.

The first part of a multi-year study, we were able to not only begin developing an important framework for studying this type of engagement, but also gleaned a number of insights around how cross-sector collaborations contribute to sustainability and recommendations for how we might select, design, implement and evaluate partnerships more effectively. Here are a few of our critical takeaways:

1. Market-oriented partnerships – with market-oriented activities – have a higher likelihood of enduring than non-market-oriented partnerships. Of the partnerships we looked at, those designed around a core business opportunity for a profit-driven partner had a high likelihood of creating enduring results, more so than those engaging solely in CSR activities. So while we know there is an important place for CSR and philanthropic efforts, we also know that shared value partnerships can help us achieve lasting results.

2. Not surprisingly, our work suggests that enduring results were linked to private sector partners contributing in an additive manner. When the private sector was not essential and did not generate “additionality,” partnership activities were less likely to endure, which is why we don’t partner simply for the sake of partnering but seek collaboration that advances our development objectives. More specifically, we found that as an asset, private sector relationships were most additive when used to create market linkages.

3. Achieving policy change can be an effective way to drive scale and sustainability of a partnership, particularly when combining private sector assets with the capabilities of donors and host country governments.  Of those partnerships we reviewed, those that achieved policy change demonstrated strong potential to both sustain and scale activities or outcomes, without requiring additional funding.

4. Partnerships with corporations that have a strong local presence are more likely to have results that are financially self-sustaining. USAID has a long history of working with local firms, the dynamics of which we have explored in depth as we consider the value of working across sectors.

This work also revealed anecdotal evidence of positive spillover or indirect effects from our partnerships that may be significant but hard to quantify. For example, a specific partnership and the commercial viability of a company’s engagement in a development project may have raised attention and attracted other companies to invest in a traditionally underserved community.

These insights and findings support much of what we already believe. That partnerships are critical to our work and they can help us approach development challenges more effectively and efficiently with an eye toward sustainability and scale. Now, we must look to strengthen the understanding and expectations for sustainability and scale in partnerships – both internally and amongst our partners.

USAID is actively working to better understand how our cross-sector partnerships improve our development outcomes so that we can also improve when, where and how we engage with partners. We aim to build upon this recent work to further refine a framework for examining our partnerships to better assess and evaluate the contributions and roles of the private sector in building lasting development results.