Increasing the performance of the Netherlands Red Cross through private sector partnerships

1. Increasing the performance of the Netherlands Red Cross through private sector partnerships Ruud Tombrock Martin Schiere March 2006

2. Contents • The big but complex ‘charity sector’ • The Red Cross • The Netherlands Red Cross Society • Trends in the sector that led to the corporate partnership project • Project set-up & approach • The outcome and ongoing development • Key learning points for other organizations

3. In 2004 in the Netherlands: over 2 billion euros donated by private and corporate donors and government Huge competition. Over 40.000 registered charities in The Netherlands After years of grow (10 % per year) the market does not grow any more since 2001 Expenditures by charities are being scrutinized by the media The charity sector: a big, complex sector (1/2)

4. People are getting fed up with direct mail Large international charities often have a complex structure: Netherlands Red Cross has 340 local branches that are autonomous, 34.000 volunteers, 675.000 donors NRC is member of Federation of RCRC societies, ICRC Only an indirect link between services rendered and payments for these services: The ones that receive the services are typically the most vulnerable who don’t pay for the services rendered: handicapped, chronically sick, victims of natural disasters The charity sector: a big, complex sector (2/2)

5. A sudden increase in demand due to emergency situations almost always imply an immediate strain on resources. Many charities determine their service portfolio on the basis of who they perceive needs it most: Offering services to ‘the most needy groups’ is not necessarily the strategy that brings in the most funds. Examples: illegal immigrants, hunger in Africa. Single issue charities are easier to communicate The charity sector: Supply and demand are permanently out of balance

6. Some facts and figures of the sector: Four main sources of funds in order of size: ‘consumer’ donations, government subsidies, legacies, corporate donations Corporate donations not yet an important factor but growing (slowly) A lot of companies talk about CSR. But how many are truly committed? Main reasons for a corporate contribution: image, enlarging the customer database, employee involvement Some facts and figures of the Netherlands Red Cross: Number 3 largest fundraising organisation Traditionally one of the largest charities with operational activities Strategic focal points: Stronger position on social aid in the Netherlands Communications: more TOM, more content knowledge More funding More youth The Netherlands Red Cross & the Dutch charity sector

7. The Netherlands Red Cross: ‘simplified service portfolio’ Social assistance • Assistance to the handicapped, chronically ill and lonely people: • Friend services • Holidays • Houses for terminally ill children • Basic healthcare services • Water projects • Education and prevention • Through bilateral agreements • HIV/AIDS-prevention campaigns International focus National focus Disaster relief, prevention and rehabilitation (goods, professional expertise, rebuilding efforts) Medical assistance and relief by disasters First aid Emergency assistance

8. Trends effecting the demand side: Dutch government pulling back its activities in the ‘care sector’ in a larger trend of privatization. This leaves many vulnerable groups such as the elderly asking for more care from ‘other sources’ such as volunteers Individualization, cocooning: more loneliness Increase in demand for services due to more radical weather and new epidemics such as AIDS. Trends effecting the supply side: Increase in corporate giving. The trend of corporate responsibility. More ´earmarked´ giving More employee involvement Shift from (traditional) donations to many projects to sponsor and partnerships with limited number of charities. But: number of partnerships is still very limited. Donors want more transparency New forms of idealism more individual and more pragmatic. willingness to make a contribution, but in a different manner Trends: a sector under pressure Mission: search for potential corporate partners in a systematic manner

9. Donation for specific projects Trends in corporate giving: from donation to partnerships Money invested in NGO Partnerships Sponsorships Intensiveness of relationship One-time donation for specific projects without further commitment or one time donations to NGO. Most corporate donations. Sponsorship from company to NGO on certain conditions(display, name recognition). Influence or creation of specific projects. Mutual goal, insight and influence on the strategy of all partners. WFP &TNT & BCG City year & Timberland CARE – Starbucks Visible trend is to move from donation to sponsorships. Partnerships are still rare.

10. 2 4 1 Donators of Red Cross National – Social segment 3 3 2 Partner and clients of partner1) 4 Approach: 4 main criteria to assess partners and initial fit 4 main criteria were chosen to assess the potential partners. In the personal interviews more precise and company specific data and criteria were obtained to further assess mutual fit. Ability to assist financially Ability to assist in developing the National-Social segment ‘national sociaal kwadrant’ - Overlaps between RC users and consumers of partner's products. Able to increase visibility within RC’s target segments Overlaps between RC donators and Partner Any other internal needs that Red Cross could provide the partner with • 1) Only companies with presence in the Dutch market and strategic decision authority in The Netherlands are considered. 1 1

11. Financial position of company Turnover Profits Cash flow Willingness to spend on charity in The Netherlands? Amount allocated on charity Charity objectives in corporate statements Ability to create cash in charity organization Synergies in current activities of Red Cross Ability to improve operations of Red Cross Market opportunities for partner in National-Social segment? Marketing decision authority in the Netherlands? Fit between RC and partner's consumers (modern and traditional mainstream) Marketing budget Need for increase in social responsible image Need for increase in employee satisfaction Need for decrease in employee turnover Approach: several soft indicators to measure the criteria Criteria Indicators Able to help financially? Able to help in National-Social positioning? - Able to increase visibility? Any internal needs that NRK could help with? 1 2 3 4

12. Contents • The big but complex ‘charity sector’ • The Red Cross • The Netherlands Red Cross Society • Trends in the sector that led to the corporate partnership project • Project set-up & approach • The outcome and ongoing development • Key learning points for other organizations

13. The outcome: • Shortlist of seven: • 1. consultancy: Booz Allen Hamilton * free consultancy hours (80 days) for two • projects per year • 2. pharmaceutical and health care products: • Johnson & Johnson * no partnership • 3. food: Heinz * no partnership • 4. food: Campina * € 100.000 for two projects, • one in Vietnam and one in the Netherlands. • 5. telecommunications: Vodafone * partnership on two new projects: • `travel assistance for disabled people` project on conflict prevention/reduction • 6. technology: Siemens * small sponsoring only • 7. technology: Philips * talks just started (on a high level)

14. Lessons learned: • Approach by students instead of charity itself works very well • Strategic approach (matching organizational goals of company and charity) works well • Level in the organization should not be too low • Quick follow-up by charity is necessary • More effort should be invested in the handover • Often personal chemistry plays a role • Ideas for cooperation are build up over several conversations • Ideally the handover will be more gradual • Contacts can be a bit erratic • For overworked executives the Red Cross is ‘the last thing on their minds’ • Win-win situation should be created • Building a partnership takes a lot of time

15. Questions and suggestions? • Any comments on the survey? • Any suggestions on sectors and companies that the NRC could contact? • How would you approach potential corporate partners is you were the ‘marketing director of the Red Cross’ • What sectors would you target? • How would you add value to your potential partners? • What would you do different

16. Thank you for more information or to exchange ideas:r.tombrock@redcross.nlmartin@schiere.comPresentation can be downloaded fromwww.schiere.com