How partnerships create value

Partnership insight

Partnership Accelerator · Thinking creatively about resources in partnerships

Mastercard Foundation's Payal Dalal describes how she thinks about 'resources' in partnership - going way beyond just money.

Given the time, challenges and transaction costs involved in partnering, the primary driver for working through MSPs must be that, by combining their resources creatively, organisations can deliver far more than is possible alone. Additionally, every partnership must create net value for each partner – otherwise there is no incentive for their continued involvement.

In order for partnerships to be a success, it is essential that all partners focus regularly on the question of how the partnership is creating value. In business terms, this would be called the cost: benefit analysis, and it would be expressed in purely financial terms. In partnership terms, it is necessary to go beyond purely financial considerations and think about the multiple forms of value.

This diagram summarises partnership value creation:

Value-add of a partnership as a whole

We define two concepts for consideration in their partnership design:

Collaborative Advantage

The Collaborative Advantage can be thought of as the extra 'processing power' that partnership brings, as a result of combining diverse resources in creative ways, going way beyond what an additional organisation operating alone might achieve. It is different for every partnership but there are several common types of collaborative advantage, including sharing risk, accelerating knowledge exchange, expanding reach, encouraging organisational growth, fostering innovation, building collective legitimacy, or creating critical mass on an issue.

THE PARTNERSHIP DELTA OR PARTNERSHIP DIFFERENCE (ΔP)

The Partnership Delta or Partnership Difference (ΔP) is the additional, specific, extra outcomes or impact that a partnership delivers compared with single actor approaches, as a result of the Collaborative Advantage.

Examples include:

Developing and disseminating norms, standards and policies to raise standards / create a level playing field across a whole sector, enabling ongoing impact.
Raising the level of knowledge, expertise and capacity widely, leading to more effective practice and greater impact.
Increasing efficiency or effectiveness of delivery of similar, proven approaches by joining forces.
Strengthening policy, contributing to better governance or more inclusive markets.

Benefits / value created for each individual partner

1. MISSION VALUE

Direct or indirect achievement of strategic objectives

For an NGO this could include delivery of specific programmatic or advocacy objectives, with direct or indirect impact on intended beneficiaries. For a company it might be gaining commercial value through new business opportunities, or to ensure the sustainability of a supply chain.

2. ORGANISATIONAL GAIN

Leveraging resources

Resource gains can include financial gains in the form of funding or cost savings that can be made (for example through sharing services). Organisations might also receive non-financial material gains such as in-kind contributions of goods, services or volunteers.

Indirect and intangible gains

Organisations may also enter partnerships to achieve a number of non-tangible benefits. These might include, for example, social or political capital; networking and connections; increased legitimacy; reputational benefits; influence and positioning; knowledge and capacity building; innovation in thinking and employee morale and retention.

In order to ensure NET benefit, each partner must also assess, on an ongoing basis, the cost of their involvement, including the full cost of staff time, in-kind contributions etc. and financial contributions.

Partnership insight

Partnerships for innovation in access to basic services. Five case studies from Innovation and Technology for Development Centre

This slide deck analyses five partnerships in Latin America, showing how they created value through INNOVATION Partnerships for innovation in access to basic services.