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A Good Practice Handbook for Companies Doing Business in Emerging Markets
Strategic Community Investment
Strategic
Community
Investment
A Good Practice Handbook for
Companies Doing Business in
Emerging Markets
In partnership with Italy, Luxembourg,
the Netherlands, and Norway
INTERNATIONAL FINANCE CORPORATION
2121 Pennsylvania Avenue, N.W.
Washington, D.C. 20433 U.S.A.
Telephone: 202 473-1000
Facsimile: 202 974-4384
www.ifc.org
All rights reserved
First printing, June 2010
The findings, interpretations, views, and conclusions expressed herein
are those of the authors and do not necessarily reflect the views of the
Executive Directors of the International Finance Corporation or of the
International Bank for Reconstruction and Development (the World
Bank) or the governments they represent.
Some information in the publication comes from publicly available
sources such as company websites. IFC has not verified the accuracy of
such information nor the companies’ practices.
Rights and Permissions
The material in this publication is copyrighted. IFC encourages use and
distribution of its publications. Content from this document may be used
without prior permission provided that clear attribution is given to the
original source and that content is not used for commercial purposes.
Cover Photo Credits:
1st row (L to R): T.Pollett, iStockphoto, T.Pollett,
2nd row (L to R): iStockphoto, World Bank staff, iStockphoto
3rd row (L to R): Y. Hadar, T.Pollett, A. Ilyasov
Tab Photo Credits:
Chapter 1: A.Bhalla
Chapter 2: iStockphoto
Chapter 3: World Bank staff
Chapter 4: World Bank staff
Chapter 5: World Bank staff
Chapter 6: J.Pantoja
Chapter 7: World Bank staff
Chapter 8: R.Parker
Tools: T.Pollett
Strategic
Community
Investment
A Good Practice Handbook for
Companies Doing Business in
Emerging Markets
Contents
Good Practice Principles for Strategic Community Investment
Introduction.................................................................................................................................... i
What Is Strategic Community Investment?
About this Handbook
Putting the Approach into Practice: A Strategic Planning Framework for CI
Chapter 1: From Well-Meaning to Strategic................................................................................1
12 Reasons “0ld-Style” Community Investment Has Underperformed
Elements of a Strategic Approach
How Strategic Is Your Approach?
Getting Started: The Building Blocks
Chapter 2: Assess the Business Context for CI..........................................................................13
Focus on the Business Case
Undertake a Company Diagnostic
Align Internal Functions to Support CI
Build on Core Competencies and Business Links
Chapter 3: Assess the Local Context for CI................................................................................25
Know What You’re Getting Into Before Engaging
Map the Social Landscape: Actors, Institutions, Dynamics, Relationships
Use this Information to Facilitate Strategic Planning for CI
Chapter 4: Engage Communities on CI. .....................................................................................35
Why Engagement for CI is Different
Support Community Planning Processes
Five Phases of Community Planning for CI
Chapter 5: Invest in Capacity Building.......................................................................................49
Be Strategic—Five Questions to Ask Up Front
Target the Right People
Build the Right Types of Capacities
Evaluate Capacity-Building Results
Chapter 6: Set the Parameters....................................................................................................59
Screen All Activities (Against Established Objectives, Principles, and Criteria)
Select Investment Areas
Build a CI Portfolio that Supports Your Strategy
Build Sustainability into Project Design
Set a Preliminary Budget
Re-engage with Stakeholders on Proposed Parameters
Chapter 7: Select the Right Implementation Model and Partners...........................................81
Understand the Different Implementation Options
Consider Timeframe, Budget, and Local Context
Key Questions for Implementation Planning
Strategies for Successful Partnering
Chapter 8: Measure and Communicate for Strategic Advantage............................................95
10 Ways to Make the Measurement of CI More Strategic
Linking Community Outcomes and Business Value
Communicating About CI
Tools............................................................................................................................................115
Tool 1: Template for Preparing a Community Investment Strategy
Tool 2: Template for Preparing a Communications Plan
Tool 3: Institutional Mapping Questionnaire
Tool 4: Social Network Analysis
Tool 5: Risk and Opportunity Screen
Tool 6: Capacity Assessment Methods
Tool 7: McKinsey Capacity Assessment Tool
Tool 8: Exit/Handover Strategy Template
Tool 9: Turnaround Strategy Template
Tool 10: Planning and Financial Valuation Tool for Sustainability Investments
Useful References......................................................................................................................135
Notes. .........................................................................................................................................139
Figures
Figure 0.1: Seven Steps for Developing a Community Investment Strategy....................................... iii
Figure 1.1: Key Elements of Strategic Community Investment ..........................................................3
Figure 2.1: Examples of Business Drivers for CI................................................................................14
Figure 2.2: Examples of CI Linked to Business Competencies and Resources....................................21
Figure 3.1: Variables of the Local Context.......................................................................................25
Figure 3.2: Mapping Stakeholders...................................................................................................27
Figure 4.1: Community Assessment: Moving from “Needs and Wants” to “Assets and Opportunities”.....43
Figure 5.1: Examples of Stakeholder Groups Targeted for Capacity Building....................................50
Figure 5.2: Areas in which Change May Occur due to Capacity-Building Measures. .........................56
Figure 6.1: Setting Parameters for the CI Strategy...........................................................................60
Figure 6.2: Selective Investing to Create Shared Value.....................................................................64
Figure 6.3: Risks and Opportunities Posed by Community Needs and Issues....................................66
Figure 6.4: Sample Screening Process for CI Options.......................................................................68
Figure 6.5: BG Group’s Typology for Social Investment Spending.....................................................69
Figure 6.6: Focus on a Few Key Areas for Greater Impact................................................................69
Figure 6.7: Different Types of Investments for Different Business Phases and Objectives...................70
Figure 6.8: From Dependency to Development................................................................................71
Figure 7.1: Examples of Implementation Models.............................................................................82
Figure 8.1: Hierarchy of Indicators – An Education Project Example.................................................98
Figure 8.2: Targeting Communications for Community Investment................................................109
Tables
Table 1.1: Higher Risk and Lower Risk Contexts. ................................................................................5
Table 1.2: Benefits of Having a Communications Strategy for CI. .......................................................8
Table 2.1: Example – Making the Business Case for Community Investment....................................15
Table 2.2: Potential Interface Between Business Units and Local Communities.................................20
Table 2.3: Sample Worksheet for Brainstorming Business Competencies and Resources. ..................22
Table 3.1: Useful Approaches for Understanding Community Relationships and Dynamics. ..............31
Table 4.1: Invest in Building Trust with Local Communities..............................................................36
Table 5.1: Sample of Company Competency Dimensions/Key Skill Areas for CI................................51
Table 5.2: Investing in Local Capacity Building – A Menu of Options. ...............................................55
Table 6.1: Examples of Company Funding Formulas for Community Investment Activities. ...............78
Table 7.1: Common Implementation Models...................................................................................81
Table 7.2: A Road Map for Deciding How to Implement..................................................................83
Table 8.1: Sample Tools and Mechanisms to Support Participatory Monitoring and Evaluation.......102
Table 8.2: Emerging Methodologies for Valuing Corporate Sustainability Programs.......................107
Boxes
Tips for Supporting Strategic Community Investment....................................................................... iv
Company Self-Assessment................................................................................................................4
What a Good Community Investment Strategy Should Do................................................................6
Sequencing Issues and the Project Cycle. ...........................................................................................7
Communications Versus Engagement...............................................................................................8
The Community Perspective: What Factors Determine the Relationship with the Company?............10
Why Community Investment Programs Perform Better When They are Aligned with the Business..........13
The Costs and Benefits of Securing Community Support (Philippines). .............................................16
Valuing Sustainability Risks in the Extractives Sector .......................................................................17
How Companies Define Their Vision for Community Investment.....................................................18
The Importance of Cross-Functional Coordination...........................................................................20
Dialog Telekom (Sri Lanka) – Harnessing Core Competencies in Information and
Communications Technology.....................................................................................................23
Big-Picture Issues and Challenges that can Affect CI. .......................................................................28
Aracruz Cellulose (Brazil) – Mapping Key Stakeholder Issues to Inform Company Strategy...............30
Institutional Mapping: Areas for Investigation.................................................................................32
Indicators of Community Engagement Effectiveness. .......................................................................35
Core Principles of Community-Driven Development (CDD)..............................................................38
Newmont (Ghana) – Gender Mainstreaming Program.....................................................................40
Lonmin (South Africa) – Lessons from the Rekopane Development Forum.......................................41
Five Capitals Framework.................................................................................................................42
Key Questions for Visioning............................................................................................................44
Veracel (Brazil) – Supporting Community Planning Through Social Networks...................................46
Chevron (Nigeria) – Community-Driven Development Planning Approach.......................................47
Peru LNG (Peru) – Promoting Municipal Strengthening and Social Accountability
Around Revenues from Extractive Industries...............................................................................52
UNDP’s Five Functional Capacities...................................................................................................53
Community Capacity Assessment (Fiji). ............................................................................................54
Capacity Building Practice Pointers..................................................................................................57
Montana Exploradora (Guatemala) – Geographically-Based Eligibility for CI Funding.......................61
Chevron (Nigeria) – Guiding Principles and Selection Criteria for Screening
Community Investment Projects.................................................................................................63
Coca-Cola (Kenya) – Shared Interests Around Water Issues.............................................................65
Tips for Developing Handover and Exit Strategies............................................................................73
Himal Power Limited (Nepal) – Designing for Sustainability: An Exit Strategy Involving Local Capacity......74
Lihir Gold (Papua New Guinea) – Promoting Sustainable Development Planning for Lihir Island.......75
Budgeting Tips for Community Investment.....................................................................................78
Chevron (Nigeria) – A Regional Development Governance Structure. ...............................................85
Baku-Tbilisi-Ceyhan (BTC) Pipeline (Azerbaijan) – Piloting a “Star Community” Approach...............86
Foundation for Environment and Development (Cameroon) – Addressing the
Challenges of Financial Sustainability.........................................................................................87
Steelpoort Valley Producers Forum (South Africa) – Scaling Up Through
Industry-Government Collaboration...........................................................................................90
Standard Chartered Bank – Extending the Reach of HIV/AIDS Workplace Programs.........................90
CEMEX (Philippines) – Establishing Clear Roles and Responsibilities in Partnerships..........................92
Making Objectives “SMART”..........................................................................................................96
Performance Indicators and Targets for Community Investment .....................................................99
APRIL (Indonesia) – Using Perception Surveys to Monitor Stakeholder “Goodwill”.........................101
Rio Tinto – Utilizing Gender-Sensitive Indicators to Improve Outcomes..........................................103
Dialog Telekom (Sri Lanka) – Adopting an Integrated Performance Scorecard Approach................104
Valuing Placer Dome’s Community Involvement Program (Chile). ...................................................105
Indicators of the Company-Community Relationship.....................................................................106
Good Practice Principles for Strategic Community Investment
1. STRATEGIC
Activities flow from a well-defined strategy (objectives, criteria, guiding principles) linked to
a clear business case and assessment of risks and opportunities
Addresses both short and long-term objectives through a strategic mix of investments
Focuses selectively on a few key areas for greatest impact where the company can most
effectively leverage its unique role and competencies to address community priorities
Looks beyond financial resources and considers how to make best use of company assets,
resources, expertise, advocacy, and relationships to benefit local communities
Evolves with the business phase and uses different approaches along the project cycle
2. ALIGNED
Aligns the strategic issues of the business with the development priorities of local
communities, civil society, and government to create “shared value”
Coordinates CI with other company policies and practices that affect communities, such
as impact management, stakeholder engagement, and local hiring and procurement
Promotes cross-functional coordination and responsibility for supporting CI objectives
among all business units that interact with local stakeholders
3. MULTI-STAKEHOLDER DRIVEN
Positions the company as a partner in multi-stakeholder processes rather than as the
principal actor in promoting local development
Recognizes that a multi-stakeholder approach reduces company control but adds value by
building local ownership and complementarity around shared interests
Supports communities and local governments in defining and meeting their own
development goals and aspirations through participatory planning and decision making
4. SUSTAINABLE
Seeks to avoid dependency, encourage self-reliance, and create long-term benefits that
can outlast company support
Does not commence activities without a viable exit or handover strategy
Invests heavily in capacity building, participatory processes, and organizational
development to enable local communities, institutions, and partners to take progressively
greater roles and responsibilities
Reinforces, rather than replaces, local institutions and processes where feasible
5. MEASURABLE
Measures return on community investment to both the company and the community
Uses outcome and impact indicators to measure the quantity and quality of change
Tracks changes in community perceptions to gain real-time feedback on performance
Uses participatory methods of monitoring and evaluation to build trust and local
ownership of outcomes
Proactively communicates the value generated by CI to internal and external audiences
Introduction
Companies around the world engage in community investment (CI) efforts as
a way to promote local development and benefit stakeholders in their areas of
operation. For the private sector, community investment—a subset of overall social
performance and corporate responsibility—is linked to competitiveness and to
creating an environment conducive to private investment. In contexts where social
risks and expectations are high, benefits channeled effectively through community
investment programs can help companies gain a social license to operate, access
land, reduce project and reputational risks, boost productivity, meet government
requirements or global standards, and/or successfully compete for the next venture.
Good practice in this area continues to evolve. Companies are moving away from
philanthropic donations and ad hoc practices to more sophisticated and strategic
ways of planning and delivering their community investment programs. There
is greater emphasis on the business case—on viewing CI through the lens of
risk and opportunity, and on creating “shared value” by aligning business goals
and competencies with the development priorities of local stakeholders. Other
trends include a focus on building social capital and local ownership through
multi-stakeholder processes; factoring sustainability and handover strategies
into project design; and measuring and communicating results to optimize the
business value derived from CI.
WHAT IS STRATEGIC COMMUNITY INVESTMENT?
For the purposes of this handbook, we define strategic community investment as:
Voluntary contributions or actions by companies to help communities in their
areas of operation address their development priorities, and take advantage of
opportunities created by private investment—in ways that are sustainable and
support business objectives.
The use of the term investment implies an expectation of a “return” and signals
that company support for community development should be viewed like other
business investments.
i
While the biggest contribution a company normally makes is in the positive impact
of the business itself—through employment, contracts, its supply chain, and
payment of taxes—voluntary community investment programs offer an important
additional avenue for enhancing positive impacts and socioeconomic benefits.
Through CI, companies support capacity building, access to social services and
infrastructure, livelihoods development, skills transfer, microfinance, and the like,
often in contexts where the levels of poverty are high and where business and
communities compete for the use of land and natural resources.
While this publication focuses on voluntary programs, a strategic approach encourages
companies to think creatively and cross-functionally about the many different ways to
increase the “share of the pie” that goes to the local population. This means tapping
into the full spectrum of what the private sector has to offer—from opportunities
linked to the core business and supply chain; to business competencies, assets, and
know-how; to leverage with key contacts, networks, and partners. In this sense, CI may
be viewed as a strategic tool that can be combined with other efforts to generate value
for both the business and its neighboring communities.
Community investment, of course, goes hand-in-hand with a company’s
stakeholder engagement efforts. Experience shows that these types of up-front
investments in relationship-building with local communities and partners can pay
significant dividends during times of conflict or crisis.
ABOUT THIS HANDBOOK
The aim of this handbook is to help IFC client companies and the wider private
sector operating in emerging markets to think strategically about how they can
support community investment programs that are successful, sustainable, and
consistent with their own business objectives. The handbook draws heavily on
the lessons and practical experiences of IFC, its client companies, and other
organizations focused on the private sector in emerging markets. It also draws
specifically on the knowledge and insights of IFC social development specialists and
community investment practitioners inside companies or working with companies.
When taken as a whole, these insights and good practice approaches point toward
a new, more strategic business model for community investment.
Who is the Target Audience?
This handbook is particularly relevant for sectors such as oil, gas, mining,
infrastructure, tourism, power, agribusiness, forestry, and large manufacturing—
where forging good relations with neighboring communities and contributing
to sustainable local development can be a business imperative. It is meant for
use by anyone who is interested in developing a company-supported community
investment program or improving the performance of an existing one.
• For a community investment practitioner who needs to design a program
from beginning to end, the handbook offers a detailed road map (but will
need to be supplemented by additional tools, some of which can be found in
the Tools section or listed under “Useful References”).
ii
• For a senior manager who wishes to understand the key concepts of a
strategic approach to community investment, what the planning process
entails, and the implications for business managers, the Quick Guide version of
this handbook will provide a useful overview.
• For a nongovernmental organization (NGO) involved in CI implementation,
or considering partnering with a company to design a CI program, the
handbook will provide critical information on understanding the company
perspective, including the “business case” for CI.
• For IFC staff involved in assisting clients in the design of strategic community
investment programs, the handbook is required reading.
• For policymakers, or those involved in setting standards and guidelines
regarding the contribution of companies to sustainable local development, the
global good practices and lessons of experience contained here should provide
useful insights.
PUTTING THE APPROACH INTO PRACTICE: A STRATEGIC
PLANNING FRAMEWORK FOR CI
Developing a CI strategy is an iterative, multi-step process with some steps taken
internally by the company and others requiring engagement, feedback, and multi-
stakeholder processes. This handbook is organized around seven key areas comprising a
comprehensive strategic planning framework for community investment.
Figure 0.1: Seven Steps for Developing a Community Investment Strategy
Assess the Invest in Select Measure and
Business Assess the Engage Capacity Set the Implementation Communicate
Context Local Context Communities Building Parameters Models Results
Business Case Socioeconomic Community Needs Objectives, In-house Baseline
Assessment Planning Assessment Guiding
Risk and Principles, and Third-party Indicators
Opportunities Stakeholders Assets and Target Criteria
and Networks Opportunities Groups Multi- Participatory
Core Investment Stakeholder Methods
Competencies Institutional Visioning and Types of Areas Partnership
Mapping Prioritization Capacities Community
Internal and Skills Exit Strategy Foundation Perceptions
Alignment Partners Expectations
Management Options and Budget Hybrid Models Return on
Project Cycle Strategies Investment
Gender
Communications
iii
We must acknowledge that reality does not have the same “clean lines” as the
flowcharts and neat chapters in this handbook. Trying to capture and convey
the CI process in a document forces a sequential logic that can sometimes make
what is an iterative, dynamic, often unpredictable process look overly precise
and mechanical. As such, it should be viewed simply as a tool requiring flexibility,
expertise, and adaptation in its application on the ground.
In outlining this process, the handbook is designed to be read from beginning
to end. However, we recognize that the needs of users will differ, and that not
all will have the time, the inclination, or the need to read every page. We have
therefore structured this handbook into eight chapters, with sub-sections, to
allow it to be used as a reference document. Users with specific interests can dip
in and out as the need arises.
TIPS FOR SUPPORTING STRATEGIC COMMUNITY INVESTMENT1
Money can’t buy you love. A multi-year study of Help people recognize the importance of
over 60 international companies operating on five making choices and setting priorities. Unlimited
continents concluded that there is no correlation requests from communities for support tend to occur
(and sometimes even an inverse correlation) when the company has not set any parameters or
between the amount of money a company spends managed expectations effectively. Open dialogue
on community projects and the quality of their with communities on issues such as budget, criteria,
relationship with the community. and cost-sharing can help facilitate discussion on
priorities and how to make the best use of available
Resist preconceived ideas of what local com- resources. Additionally, evidence suggests that when
munities need. For communities, shared decision communities trust that a company is willing to support
making is about respect and ownership. No matter them over a longer timeframe, they are more likely to
how well intended, if a company decides the priorities prioritize skills training and capacity building.
for communities instead of with communities, people
might willingly accept—but feel no responsibility to- Choose the option that builds local ownership
ward—what the company offers. and capacity. There are many ways to build a clinic
or a school. A company can use its own engineers,
Recognize the responsibility of communities for hire a local contractor, or involve the community
their own success. A dynamic of “dependency” through the use of communal labor. The quickest
can be created if a company lacks confidence in and easiest way is often to use company staff and
the community’s ability to achieve things for itself. equipment. While the end result is the same—a new
Companies should try to resist the impulse to take building—the degree of community ownership of
the initiative on community projects if communities the project can differ significantly depending on the
themselves do not. This risks sending the message option chosen.
that, if communities wait long enough, the company
will do it for them. Move away from doing it yourself to making
sure it gets done. Instead of substituting for
Do not provide free goods or services. This government by providing health and education
is not sustainable in the long run, and it creates services, companies are increasingly using their
dependency and a sense of entitlement from which access and leverage to ensure that local community
companies find it hard to extricate themselves needs are met. This can be done by lobbying the
during times of economic contraction or at government to provide services, using contacts to
project end. Experience shows that handouts and attract external donor funds and forge partnerships,
free services earn only temporary goodwill from or building the capacity of communities to take these
communities. Requiring partner contributions (in types of actions themselves.
cash or in-kind) will reveal what communities and
government value most.
iv
Being Strategic
Chapter 1
From Well-Meaning
to Strategic
• 12 Reasons “0ld-Style” Community
Investment Has Underperformed
• Elements of a Strategic Approach
• How Strategic Is Your Approach?
• Getting Started: The Building Blocks
Being Strategic
An ad hoc approach (reacting to community requests as they arise)
is the opposite of being strategic.
Chapter 1: From Well-Meaning to Strategic
What Some Companies Say About Community Investment Challenges
“We spend lots of money on CI, but relations with communities don’t improve (and sometimes even deteriorate)”
“Our CI program has become a source of conflict among communities”
“Local stakeholders have become dependent on us”
“Infrastructure projects we built lie abandoned and unused”
“There are endless requests from communities—how do we say no?”
“We get pulled in a hundred different directions”
“We’ve ended up having to take over the government’s role”
“Our CI program has little to do with our core business”
“We are doing all these good things for the community, but no one gives us any credit”
“In the end, we have little to show for all the resources we’ve spent”
12 REASONS “OLD-STYLE” COMMUNITY INVESTMENT
HAS UNDERPERFORMED
Achieving long-term, positive community development impact through company-
supported initiatives can be a complex and challenging endeavor. Many programs
do not deliver to their full potential—for either the company or the community—
despite the considerable time, goodwill, and resources invested. In some cases,
poorly planned CI has given rise to negative attitudes about the company by
creating dependencies and generating conflict around the distribution of benefits.
Contributing factors include:
1. Limited Understanding of the Often Complex Local Context
Companies have sometimes commenced community initiatives without fully
understanding the socio-cultural context or how their presence and actions
can affect the often complex dynamics between and among local stakeholder
groups. This has led to a range of unintended consequences, including the
exacerbation of tensions or creation of conflict among communities.
2. Insufficient Participation and Ownership by Local Stakeholders
Delivery of community projects without sufficient involvement of communities
and local government in decision making around development priorities has
resulted in projects with low relevance to local stakeholders.
3. A Perception of “Giving” Rather Than “Investment”
(Including Lack of Clear Objectives)
The tendency to view community development as charity rather than as an
investment linked to the business has resulted in vague objectives and a lack of
direction and purpose.
4. Detachment from the Business
Community programs have tended to be planned and implemented in isolation
from business activities and other day-to-day actions affecting stakeholders. This
has limited CI’s effectiveness in helping the company to address key social risks
and opportunities at the site level or to take advantage of business efficiencies and
competencies in support of local communities.
From Well-Meaning to Strategic 1
5. Responding to Local Requests in an Ad Hoc Manner
Ad hoc approaches are typically opportunistic and focus on short-term outputs
rather than catalyzing long-term change. The risk, in many cases, is that the
sum of all these disparate contributions to local causes does not add up to
anything that either the company or host communities can point to as a
tangible or lasting development benefit.
6. Lack of Professionalism and Business Rigor
Few community programs are held to the same standards that companies apply
to other business investments they make (in terms of professional rigor, a clear
business rationale, planning and budgeting processes, and accountability for
results). This often reflects the low priority given to CI by senior management
when there is no perceived link to the company’s bottom line.
7. Insufficient Focus on Sustainability
It is only in recent years that the sustainability of community development activities
supported by companies has become a key factor in project selection and design.
In the past, short-term objectives took priority over longer-term considerations, and
sustainability policies and criteria were not given much emphasis.
8. Provision of Free Goods and Services
While well-intended, the long-term consequences of providing free goods and
services have not proven to be in the interests of either the company or local
stakeholders. The lack of requirements for matching contributions (whether
financial or in-kind) has made it difficult to generate shared ownership or
financial sustainability, and has instead fostered dependency.
9. No Exit or Handover Strategy
Commencing activities without planning in advance for the company’s eventual
withdrawal has rendered many company-supported programs unsustainable and
created difficulties for the company around its “social license to exit” in times of
financial cutbacks or project end.
10. Overemphasis on Infrastructure and Underemphasis on Skills Building
Traditionally, community programs have been dominated by company-led,
bricks-and-mortar types of projects with a significant lack of investment in
the participatory processes, skills building, and organizational development
necessary to affect and maintain long-term change.
11. Lack of Transparency and Clear Criteria
Unclear criteria have led to numerous cases of conflict between and among
communities over who gets what and why. When transparent criteria are
lacking, company practice in distributing benefits may be perceived as secretive,
unpredictable, and susceptible to manipulation.
12. Failure to Measure and Communicate Results
In many cases the effectiveness of community programs is unknown because it
has not been systematically tracked or measured the way most other business
activities or expenditures would be. Common shortcomings include the lack
of proper baseline data and a focus on measuring the volume of spend or the
number of outputs rather than the quality of outcomes.
2 From Well-Meaning to Strategic
ELEMENTS OF A STRATEGIC APPROACH
In learning from these past experiences, companies seeking to break out of a low-
results pattern are beginning to adopt new approaches and ways of engaging with
their local stakeholders. Strategic CI encompasses five elements that reinforce one
another: strategy, internal and external alignment, multi-stakeholder partnerships,
sustainability, and results measurement. The goal is to create lasting improvements
in the quality of life for local communities, which in turn generate business value
for the company in the form of broad community support, reputational benefits,
risk reduction, productivity gains, and/or competitive advantage.
Figure 1.1: Key Elements of Strategic Community Investment
STRATEGY
RESULTS ALIGNMENT
MEASUREMENT
Better Local
Outcomes
and Business Benefits
SUSTAINABILITY MULTI-STAKEHOLDER
PARTNERSHIPS
HOW STRATEGIC IS YOUR APPROACH?
The following self-assessment provides a more detailed look at how the five
elements of a strategic framework for CI might be incorporated and applied in
practice. Companies can determine the general degree to which their programs
and practices are consistent with strategic CI by undertaking this quick survey.
From Well-Meaning to Strategic 3
COMPANY SELF-ASSESSMENT
STRATEGIC Yes No Partial
• We have a written strategy linked to a clear business case and assessment of
risks and opportunities
• We screen all initiatives against well-defined objectives, criteria, and guiding
principles, and say “no” to requests that do not fit within these parameters
• We look beyond financial resources and consider how to make the best use of
our company’s competencies, assets, expertise, and relationships in support of CI
• We focus selectively on a few key areas for greatest impact where the company can
most effectively leverage its role and competencies to address community priorities
• Our choice of implementation model is driven by strategic factors, such as time
horizon, budget, availability of local partners, and fit with our objectives
ALIGNED
• We align the strategic issues of our business with the development priorities of
local communities, civil society, and government to create “shared value”
• The link between CI and business objectives is understood by staff and
management, and we involve all business units that interact with local
stakeholders in the design of the CI strategy (and assign cross-functional
responsibilities for meeting objectives)
• We coordinate CI with all other company policies, practices, and programs that
affect communities, including impact management, stakeholder engagement,
and local hiring and procurement
MULTI-STAKEHOLDER DRIVEN
• We position ourselves as a partner in multi-stakeholder processes rather than
the principal actor in promoting local development
• We support communities and local government in defining and meeting their
own development goals and aspirations through participatory planning and
decision making
SUSTAINABLE
• We do not commence activities without a clear exit or handover strategy
• The projects we support are designed to avoid dependency, encourage self-
reliance, and create long-term benefits that can outlast company support
• We take a long-term view when engaging with communities (although short-
term results may be needed to meet business objectives at various stages of
the project cycle)
• Our support requires matching contributions (financial or in-kind) or fee-for-
service arrangements and partnerships
• We invest in capacity building, participatory processes, and organizational
development to enable local actors to take progressively greater roles and
responsibilities
• We try to reinforce, rather than replace, local institutions and processes
MEASURABLE
• We track progress systematically over time against an established baseline
(and use outcome and impact indicators to measure both the quality and
quantity of change)
• We are able to communicate the value generated by our community
investments to both internal and external audiences
• We use shared definitions of “success” and participatory methods of monitoring
and evaluation to build trust and local ownership of results
• We track changes in community perceptions to gain real-time feedback on
performance
4 From Well-Meaning to Strategic
GETTING STARTED: THE BUILDING BLOCKS
Assess Whether Community Investment is Needed
Not every project needs to have a CI program. In fact, many projects can reduce
their social risks by managing project impacts well and adjusting their business
practices and procedures to increase local economic benefits. However, in “higher
risk” contexts where there are significant project impacts on local communities,
where basic needs and expectations for benefits are high, or where the affected
communities do not have the ability (i.e., skills or resources) to take advantage of
development opportunities being created by private investment, CI may provide a
company with an effective channel to enhance development impacts.
Table 1.1: Higher Risk and Lower Risk Contexts
HIGHER RISK LOWER RISK
Significant project impacts on communities Minimal projects impacts on communities
Poor or remote areas More developed or urbanized areas
Company needs host community support to operate Community relations is not a significant issue
effectively (fixed site) for the business
Basic needs are high but government capacity is low Government provides basic services and infrastructure
Company is the largest or sole employer Company is one of many employers in the area
Expectations for benefits are high Community is indifferent to the project
Local opposition to the project exists Community is indifferent to the project
Local needs go beyond employment Employment is the main issue
Affected community lacks the ability to take Population has the skills and resources to benefit from
advantage of opportunities created by the project opportunities created by the project
The process by Invest in Process
which a company
The process by which a company engages its local stakeholders and partners, and
engages its local the spirit in which this is done, are as important to the success of CI as the strategy
stakeholders and itself. The building blocks of CI—trust, mutual respect, goodwill, capacity, shared
partners, and the learning, and local ownership—are all developed through an ongoing and iterative
process of collaboration. Getting it right involves focusing less on the number of
spirit in which this meetings organized and more on the quality of the interaction. This implies a long-
is done, are as term investment of company time and resources in establishing and maintaining a
important to the process that local people find meaningful and empowering.
success of CI as Don’t Skip the Strategy
the strategy itself.
An ad hoc approach (reacting to community requests as they arise) is the opposite
of being strategic. Having a good strategy enables a company to direct its CI
efforts with purpose. This lowers the risk of unintended outcomes and increases
the chances that CI objectives will be achieved.
From Well-Meaning to Strategic 5
WHAT A GOOD COMMUNITY INVESTMENT STRATEGY SHOULD DO
• Set out a 3-5 year plan for the company’s community investments
• Establish CI strategy objectives that are linked to the business case
• Identify target stakeholder groups and specify eligibility criteria
• Link the CI strategy to the local context by drawing upon
socioeconomic baseline studies
• Establish an iterative process of engagement with local
stakeholders and partners on CI
• Draw on the company’s core competencies and resources to support
communities
• Promote cross-functional coordination and accountability for
supporting CI objectives
• Integrate CI with other company programs that involve
communities (stakeholder engagement, grievance process, environmental
and social impact management, and local hiring and contracting)
• Set out criteria and guiding principles against which all CI proposals will
be screened
• Identify the key program areas in which the company will invest
• Identify the implementation model and decision-making/governance
structures
• Define roles and responsibilities, budget, scope, and timeline
• Describe the company’s exit/handover and sustainability
strategies
• Consider both short-term and long-term objectives
• Describe how project results will be monitored and
communicated
* A template for preparing a community investment strategy is provided in the Tools section.
Align with the Project Cycle
Strategic CI needs to evolve with each phase of the business. This calls for different
approaches along the project cycle to respond to changing business drivers. As
the types of risks and opportunities related to communities change, so should the
strategy and the kinds of activities that flow from it.
6 From Well-Meaning to Strategic
Sequencing Issues and the Project Cycle
• During the concept phase, special considerations may include planning
for future workforce needs, local procurement, or suppliers/outgrowers
development. For example, if the construction or development phase is
going to create jobs, a community investment program on skills training
or technical assistance for local communities might need to start well in
advance.
• If the project is going to cause significant negative impacts that people
are concerned about (e.g., resettlement or loss of livelihoods), it is
advisable to engage with communities to explain and address these
basic concerns before engaging on CI.
• In the development phase, “quick impact” projects executed (e.g.,
infrastructure) by the company may be needed up front to deliver on
initial expectations by government and the community for tangible
benefits and to counterbalance disruptions and impacts caused by
construction activities. The operations phase is often where capacity
building, partnerships, and long-term productive investments take place.
• Communities need to understand the project schedule so as to avoid
unrealistic expectations regarding the delivery of benefits. Some major
projects can take as long as a decade from early concept to actual
operations. Other projects may be fully operational within months.
• CI can be an extremely strategic element of a company’s exit/handover
planning process, enabling communities to think beyond the life of the
project and to prepare themselves for it. Ideally this planning should
occur at the development phase but, at a minimum, five years prior to
exit, with constant monitoring and evaluation of the transition process.
© B.Lyons
From Well-Meaning to Strategic 7
Use Communications as a Strategic Tool
Some companies may be reluctant to talk publicly about their CI programs. The
view is that “good works” should speak for themselves and that the company
should not oversell in this area. While true, this thinking can also lead a company
to undersell its efforts and, in doing so, miss important opportunities to optimize
the business benefits generated by CI. If, for example, a community investment
program is designed to secure a license to operate, improve risk management,
or enhance brand value, communicating actively and repeatedly about these
programs should be an integral part of the process. Similarly, if a company wants to
reap reputational benefits, both shareholders and other stakeholders at the local,
regional, and international levels need to be informed about these investments and
the value they create.
Having both internal and external communications plans for CI, and implementing
these proactively, can yield a number of important benefits. It can help to secure
internal management support for community investment and to promote a
collective sense of pride among staff. Locally, it can contribute to improved
relations by creating a two-way channel for information sharing. (A template for
preparing a communications plan is provided in the Tools section.)
Table 1.2: Benefits of Having a Communications Strategy for CI
External Communications Internal Communications
• Increases program transparency • Helps secure internal support
• Reduces the spread of misinformation and resources for CI (through
• Serves as a two-way channel for communication of the business case)
feedback from stakeholders • Builds company-wide understanding
• Builds interest and buy-in from civil and appreciation of the purpose of CI
society and government and the link with business goals
• Strengthens corporate image among • Promotes a collective sense of pride
the public and industry peers and goodwill among staff by doing
• Improves risk management something positive for communities
• Strengthens brand value/reputation • Leverages External Relations/
• Increases appeal to financial investors Communications staff in support of CI
Communications Versus Engagement
In contrast to stakeholder engagement, communications is more informative
than consultative. In the context of CI, the purpose of communications is to:
• Deliver key information to target audiences
• Convey plans for community investments
• Create transparency around the process
• Prevent misinformation from spreading
• Disseminate information about successes and achievements
• Enhance the reputational benefits from community investment
• Communicate the value of CI to different audiences and stakeholders
• Help anticipate, control, and manage crisis situations
8 From Well-Meaning to Strategic
When it comes Take a Holistic Approach to Community Relations
to managing
When it comes to managing company-community relationships, community
company-
investment is only one part of the equation. While CI can be used to help build
community local support and channel development benefits to communities, it should not be
relationships, thought of as the company’s primary means for risk management, stakeholder
community engagement, or local job creation. These three functions are part of a company’s
core business processes and should normally be in place prior to commencing CI.
investment is only
one part of the This handbook assumes that companies are already implementing the following
equation. three programs, and that community investment will build upon and seek to add
value over and above these existing processes.
Risk Management: Run Your Core Business Well and Actively Manage Your
Direct and Indirect Project Impacts
Good social and environmental performance is fundamental to managing risks and
building strong relationships with local communities. CI programs—which should
not be confused with mitigation or compensation for project impacts—cannot
be effective if the local population feels that the company is not adequately
managing negative impacts. Good practice companies take broad responsibility for
the wide range of impacts generated by the project and work with communities
transparently and in good faith to address them. This includes indirect or “induced”
impacts (such as population influx, food security, or an increased incidence of HIV/
AIDS), as well as impacts from associated facilities linked to the project.
Stakeholder Engagement: Engage Communities on the Issues that Matter to
Them Most and Be Responsive to Local Grievances
As a general rule, a company will have established ongoing engagement on the
broader project—and the issues of highest concern to local stakeholders—before it
engages communities on CI. Making investments in community development when
there are major outstanding issues, or when adequate relationships have not been
established, is usually unproductive. Effective engagement comes from knowing
what issues local communities care about most, discussing these with them early
on in a culturally appropriate manner, and using iterative processes (including
accessible grievance mechanisms) that enable company action and follow up. The
quality of the engagement process and how the company engages will set the tone
for future interactions and relations with local stakeholders, so it is important to try
to get this right from the beginning.
Local Community Content: Adopt Policies and Practices that Promote Local
Hiring, Sourcing, and Supply Chain Development
In most cases, the number one expectation of communities from private sector
operations is for “jobs,” both direct and indirect. The natural starting point for any
company is opportunities linked to its core business processes, such as employment,
procurement of goods and services, and assisting local vendors to become suppliers.
This is because the income-generating potential of local hiring and procurement
efforts linked to a company’s own business processes far outweigh those that can be
generated through other community investment efforts.
Sometimes what the company defines as “local,” however, may be different from
the community’s definition. This can affect the perception of “fairness” in the way
a company allocates jobs and contracts. Special efforts may be required in working
with Human Resources and Procurement to ensure that local content includes local
community content. Consultations with communities should address this issue in a
transparent manner and seek to manage expectations.
From Well-Meaning to Strategic 9
The Community Perspective: What Factors Determine the Relationship
with the Company?2
Experience from the Corporate Engagement Project What Responsibility Does the Company Take
(CEP) across regions and sectors has shown that for Project Impacts?
communities are surprisingly consistent when it • Does the company take broad responsibility
comes to defining what matters most to them in for the range of impacts (both direct and
terms of company-community relations. According to indirect) that affect people’s lives or does it
communities, it is the company’s policies and practices take narrow responsibility?
in the following three areas that determine whether
the relationship will be a positive or negative one. • Are company actions in this area perceived as
fair, transparent, and accountable?
How Does the Company Distribute Local How Does the Company Behave?
Benefits?
• Does the company engage with local
• Does the project generate tangible economic communities in a manner perceived as open,
and social benefits for local communities (e.g., transparent, and honest?
jobs, contracts, development opportunities,
• Do company actions and the behavior
improved access to social services and
of its staff convey respect, caring, and
infrastructure, and so forth)?
trustworthiness? Or does the company’s
• Is the way in which the company distributes behavior convey arrogance, disrespect, and
these benefits perceived as fair, transparent, lack of caring?
and equitable?
• Are there clear criteria and does the company
apply them consistently?
The Three Pillars of Company-Community Relations
Jobs, Contracts, Benefits Fairness
Community Projects Distribution Transparency
Strategy Alignment
Management of Broad
Direct and
Project Impacts Accountability
Indirect Effects
Transparency
Respect
Company Behavior
Perceptions Caring
Transparency
10 From Well-Meaning to Strategic
Chapter 2
Business Context
Assess the Business
Context for CI
• Focus on the Business Case
• Undertake a Company Diagnostic
• Align Internal Functions to Support CI
• Build on Core Competencies and
Business Links
Business Context
A strategic-minded company tends to support CI programs and
activities in areas where it, as a business, has the most to offer,
and where there are links to its business interests.
Chapter 2: Assess the Business Context for CI
“The ability to FOCUS ON THE BUSINESS CASE
demonstrate
In a strategic approach, making the link between a company’s community
good social investment objectives and its business objectives is essential. This step is often
and community bypassed, however, due to a general assumption that anything “good” done for
development communities—such as building a clinic or donating to a local cause—will translate
into goodwill with the local population (which, in turn, will benefit the company).
practices makes In reality, this outcome cannot be taken for granted. As many companies have
us an attractive discovered, it is quite possible to invest considerable resources in CI and yet have
partner for little to show for it (e.g., in terms of improved local support or less social risk).
governments,
Increasingly, leading companies are able to articulate internally and to their
opening up shareholders a clear business case for pursuing a CI program. Yet not all companies
new business are comfortable doing this. Depending on their corporate cultures, some companies
opportunities.” may be reluctant to make their underlying interests explicit. They may even object
to the notion that community investment needs a business case.
—ArcelorMittal3 In the past, separating CI from business interests was done so that, in theory, CI
programs could focus on “doing good” without being seen as “self-serving.”
In practice, however, the separation from core business weakens CI in terms of
its relevance, sustainability, and effectiveness. Experience suggests that closer
alignment between business operations and CI programs produces better outcomes
for both the company and local communities.
WHY COMMUNITY INVESTMENT PROGRAMS PERFORM BETTER
WHEN THEY ARE ALIGNED WITH THE BUSINESS
• When CI is aligned with a company’s business strategy, it is likely to
receive more internal support and resources from management and
shareholders
• When CI programs are integrated with business operations (rather than
implemented separately), this enables more effective coordination with
other business units on the day-to-day interactions and issues that can
impact the company-community relationship
• When the link between CI and business objectives is understood by
staff and management, core competencies and resources across the
business can be more readily accessed and leveraged for the benefit of
local communities
• When CI is geared toward specific business objectives, activities tend to
have greater focus and direction than when the purpose is not well-
defined
• When CI has a clear business case, the program is more resilient to
budget cuts (versus pure philanthropy, which tends to disappear during
economic downturns)
• When a company is clear about why it supports CI and what it hopes to
achieve, the “return” on investment can be more readily measured and
articulated
Assess the Business Context for CI 13
Link CI Strategy to Business Drivers
Channeling development benefits to local communities through CI can generate a
wide range of direct and indirect business benefits. The pursuit of these benefits,
or “business drivers,” is what motivates companies to support CI programs. Once a
company identifies the key business drivers to which CI can most readily contribute
(such as gaining a “social license” to operate in the case of a mine or a hotel, or
meeting global certification standards in the commodities sector), these can then
be used to drive the strategy.
It can be argued that many of the business drivers for CI are the same as those for
“sustainability” or “social performance” programs more broadly. This is true, because
in most cases CI will not be the only, or even the primary, vehicle a company should
use to address community issues; rather, CI will be a supplementary, strategic tool for
further enhancing local benefits.
Figure 2.1: Examples of Business Drivers for CI4
Timber Resources Management Sino Gold's Jinfeng Mine was able to build its Levi Strauss partnered
legislation in Ghana requires logging social license to operate in the Ghizou province, with a local NGO in
firms to commit a portion of their one of the poorest in China, by committing to a Bangladesh to provide
financial resources toward the ten-year program of community development in workers’ rights education
provision of social infrastructure and consultation with local stakeholders. and microenterprise support
services to local forest communities to female garment workers
through “Social Responsibility in response to criticism of
Agreements.” sweatshop labor in its
supply chain.
Social
License
Government Risk
Requirement Management
Customer
Loyalty Reputation
Competitive Access
Advantage to Land
Global Business Local
Certification Drivers for CI Workforce
Requirements Productivity
Universal Sodexo’s innovative The Roundtable on Sustainable Palm Oil In East Africa, Serena Hotels’
approach to supporting aboriginal has principles and criteria for smallholders, HIV/AIDS program—including
people in developing indigenous requiring contributions to local outreach to communities—resulted
enterprises helped the company win a sustainable development. in dramatic workforce productivity
major food and facilities maintenance gains due to reduced mortality,
contract with Rio Tinto. lower health insurance premiums,
and less absenteeism.
14 Assess the Business Context for CI
Develop Your Business Case for CI
The key ways in which community investment can help a company to meet its
business objectives and reduce its risks (relative to costs) constitute the “business
case” for CI. To define the business case for your community investment program,
follow these key steps early on:
1. Identify your company’s broad business objectives and the steps necessary
to reach them.
2. For each business objective, identify the underlying business “drivers” or
“benefits” that could be facilitated by community investment.
3. For each driver, consider if and how CI could contribute. Be specific.
4. Prioritize those areas where CI is likely to make the biggest contribution
to facilitating business strategy and objectives.
5. Formulate the business case by describing the key ways in which community
investment can help the company meet its business objectives and reduce its risks.
6. Further develop and quantify the business case for CI, based on estimated
costs versus estimated value of community investment in helping the company
to achieve its specific business objectives.
7. Use the business case to strengthen corporate commitment and secure
resources for CI.
8. Ensure the link between your CI program and the business case by
checking that your CI strategy objectives and business objectives are aligned.
9. Think about, and discuss internally, what other company actions may be
needed (in addition to CI) to successfully deliver on the business case.
Table 2.1: Example - Making the Business Case for Community Investment
Business Business Drivers Business Benefits of CI Business Case for CI
Objectives
To define and –– Risk management –– Builds trust, credibility, and local Estimated costs
approve a project –– Social license support of CI relative to
within two years –– Government approval –– Enables access to area estimated value of
–– Access to land –– Lowers risk of opposition business benefits
generated
To maximize –– Risk management –– Lowers risk of disruption or Estimated costs
value for all our –– Social license stoppage of CI relative to
stakeholders –– Government approval –– Visibly demonstrates local benefits/ estimated value of
–– Local workforce development impact business benefits
productivity –– Improves skills and lowers generated
–– Reputation absenteeism
To achieve the –– Risk management –– Lowers risk of anti-company Estimated costs
highest global –– Adherence with global sentiment, protests, and stoppages of CI relative to
standards on industry standards –– Diffuses social tensions by estimated value of
health, safety, –– Reputation demonstrating corporate business benefits
security, and –– Competitive advantage commitment to local development generated
environmental and –– Enhances reputation
social sustainability
To build long- –– Social license –– Visibly demonstrates benefits- Estimated costs
term, successful –– Reduced operational risk sharing of CI relative to
relations with –– Helps build trust and local support estimated value of
stakeholders –– Shows corporate commitment to business benefits
tackle long-term development generated
challenges
To be the –– Competitive advantage –– Creates competitive differentiation Estimated costs
company of choice –– Reputation through sustainability track record of CI relative to
in our industry –– Access to approvals and (of which CI can be an important estimated value of
capital component) business benefits
generated
Assess the Business Context for CI 15
Try to Quantify CI’s Business Value
Maximizing business value involves both value creation and value protection.
Companies can take actions or make investments that create direct value by, for
example, decreasing the cost of inputs or boosting worker productivity. At the
same time, they can also protect existing value through actions or investments that
reduce project or reputational risks and avoid incurring costs related to such risks.
Quantifying the business case for community investments that create value
(e.g., community HIV/AIDS programs that reduce health care premiums and
lower absenteeism rates) is fairly straightforward. However, financial valuation of
community investments that protect value by building “intangibles” such as trust
and goodwill—or by decreasing the potential risk of delays, disruptions, or negative
effects on corporate reputation—is more challenging. Even though these metrics
can be difficult, quantifying the benefits generated by CI programs and other types
of sustainability investments is helpful in order to strengthen the business case. (See
Chapter 8 for further discussion on emerging financial valuation models.)
THE COSTS AND BENEFITS OF SECURING COMMUNITY
SUPPORT (PHILIPPINES)5
The Malampaya Deep Water Gas-to-Power project is a $4.5 billion joint
venture of the Royal/Dutch Shell subsidiary Shell Philippines Exploration,
Chevron Texaco, and the Philippine National Oil Company. The project
illustrates how a potentially controversial, high-impact infrastructure project
can avoid costly community opposition through ongoing efforts to secure
and maintain consent throughout the project cycle. In Malampaya, the costs
of gaining community consent proved to be minimal in comparison with total
project costs. Even using conservative “base estimates” of potential delays
due to community opposition, the project sponsors received benefits that
were worth many times these costs. In addition, Malampaya has generated
broader reputational benefits for Royal/Dutch Shell.
Costs and Benefits of Gaining Consent from Communities
Activities Costs Results Benefits/Avoided
Costs
General USD $6 –– Construction ahead of USD $36 million
Community million schedule by 3 months
Engagement/ –– Contractual penalties USD $10-30
Consultations avoided million
(including –– Project delays from USD $4-6 million
resettlement) laying of pipelines
avoided
Total Costs USD $6 Total Benefits USD $50-72
million million
16 Assess the Business Context for CI
Valuing Sustainability Risks in the Extractives Sector6
In a review of 83 cases from the oil, gas, and mining sectors, 50 cases reported
“risk events” related to sustainability issues:
• Delays in planning phase – 10 cases
• Delays in construction phase – 5 cases
• Disruptions in production phase – 17 cases
• Project expropriation – 12 cases
• Added costs (e.g., litigation) – 24 cases
A preliminary exercise based on the case reviews looked at the potential
costs of disruptions during the production phase of a project and made the
following rough assumptions:
• Likelihood of 3-6 disruptions in the first 10 years of operation
• Likelihood of 8-20 disruptions in the subsequent 40 years
• Likelihood of 3-6 disruptions in the last 10 years
• Approximate duration of disruptions ranged from 2 days to 2 weeks
• One-time-costs per disruption ranged from USD $140,000 to $700,000
(assuming management time, contract penalties, and legal and
consulting fees)
• Recurring costs ranged from USD $7,700 to $154,000 per month
(representing between 40-80 percent of total planned operating costs)
• Lost revenue from production ranged from 20-80 percent (although
companies interviewed stated they could usually make up for revenue
losses from short-term production disruptions)
UNDERTAKE A COMPANY DIAGNOSTIC
A useful starting point for many companies wanting to adopt a more strategic
approach to community engagement and investment is a company diagnostic
or assessment. This exercise can be undertaken as part of an internal strategy
workshop with key internal stakeholders from relevant business units, and may
include some or all of the following steps:
• Establish the Vision
• Review and Assess Existing Company Activities and Programs
• Ensure Cross-Functional Coordination and Internal Alignment
• Identify Core Competencies and Nonfinancial Resources to Support CI
Assess the Business Context for CI 17
Establish the Vision
Developing a CI strategy typically begins with a collective vision or sense of purpose,
which can vary significantly from one company to the next due to differences in
corporate culture. What is the company’s view of itself? What does it stand for and
how does it want to be perceived by the local community and other stakeholders?
What does it see as its role in promoting local development? (Benefactor? Catalyst?
Implementer? Advocate?) What legacy does it want to leave behind? These
are important questions to be clear about upfront, because they will drive the
type of approach a company will take, and can significantly influence—or even
predetermine—the type of community investment activities a company will support.
For some companies, the “vision” and even the specific areas of intervention
for CI are decided at a corporate level. For example, one company might have a
corporate policy that states that it will contribute to literacy and access to clean
water in places where it has operations. Another may have a CEO whose personal
commitment to biodiversity conservation and HIV/AIDS prevention influences the
type of programs the company will support. Still other companies may choose to
delegate these decisions to their local operations to determine CI priorities based on
the local context. Regardless of the approach taken, it is important to acknowledge
these factors up-front and communicate them clearly to local stakeholders when
commencing discussions on community investment priorities.
“The wellbeing of
the communities How Companies Define their Vision for
from which Community Investment8
we draw our Microsoft
agricultural raw Microsoft’s mission for community investment is to enable social and
materials and local economic opportunity, transform education and foster local innovation, and
enable jobs and economic opportunity.
labor is vital to
our success as a Nestlé
business and to Creating shared value is a fundamental part of Nestlé’s way of doing business
our shareholder that focuses on specific areas of the Company’s core business activities—namely
water, nutrition, and rural development—where value can best be created
value.” both for society and shareholders… Under rural development, the wellbeing
of the communities from which we draw our agricultural raw materials and
— Nestlé7 local labor is vital to our success as a business and to our shareholder value.
Dialog Telekom
At Dialog Telekom, we realize that to be a leader in any chosen field, a
corporation has the responsibility to not only ensure its own sustainability
but also contribute to the sustainable development of the environment it
operates in. As a Group in the Global South, this responsibility means that
we strive to use our core competence in digital technology for community
benefit, in support of [Sri Lanka’s] national development and the United
Nation’s Millennium Development Goals.
Favorita Fruit Company
Our Vision: The Wong Foundation (established by Favorita fruit to channel
its social investments) exists in order to develop a new generation of
Ecuadorians—healthier, better educated, more responsible and productive—
towards a prosperous, efficient Ecuador.
18 Assess the Business Context for CI
Review and Assess Existing Company Activities and Programs
As discussed in Chapter 1, it is important for a company to review its performance
in the three key areas of (i) impact management, (ii) stakeholder engagement, and
(iii) local hiring and procurement to assess whether there are concerns or room for
improvement, and to take action. The self-assessment questions (provided on page
4) offer a good place to start.
For companies already engaged in providing support to local communities, a
self-assessment should include a stock taking of activities to determine which
initiatives are working well and which are not. This exercise serves to identify gaps
(if any), build on successes, and point out activities that may need to be made
more sustainable or realigned more closely with the business case. (For guidance
on phasing out or restructuring existing programs that are not sustainable, see
turnaround strategies in Chapter 6.)
Some companies also find it useful to get the community perspective on these
questions, including how successful (or not) existing initiatives have been and how
the company and its efforts on CI are viewed. One way to do this is by engaging a
third-party to conduct perception surveys. (See Chapter 8 for more information on
perception surveys.)
Align Internal Functions to Support CI
Goodwill generated Goodwill generated by CI programs can quickly evaporate if actions undertaken by
other parts of the business generate conflict or negative perceptions of the company
by CI programs among local communities. Most companies, especially in the earlier stages of the
can quickly project cycle, have day-to-day interactions with local stakeholders that are separate
evaporate if actions from community investment activities. These may include engagement around project
issues such as land acquisition, compensation, or management of environmental and
undertaken by social impacts. These activities can also involve interaction with construction crews
other parts of the and contractors, or have to do with jobs and local contracting matters.
business generate
While responsibility for community relations usually rests with the community
conflict or negative
relations manager, the reality is that a community’s daily interactions with
perceptions of the other business units (over which this person may have a low level of control)
company. can significantly influence local attitudes about the company—either positively
or negatively. Cross-functional coordination and shared accountability across
departments or business units is therefore needed to effectively manage both CI
and community relations more broadly. It is also important that all staff be aware
of the company’s CI strategy and understand their roles as “ambassadors” of good
company-community relations. Here, senior management support is key.
Assess the Business Context for CI 19
THE IMPORTANCE OF CROSS-FUNCTIONAL COORDINATION
• Ensures that day-to-day interactions with communities by other business
units support the overall CI strategy and do not undermine CI efforts
• Creates understanding and buy-in for CI from functional units,
including clarification of roles and accountability for supporting
business objectives related to community relations
• Brings together the perspectives and expertise of different functional
areas within the company to assess existing impacts, benefits, and
opportunities for CI
• Helps leverage a wide range of resources, skills, and competencies
across the business in support of local communities
Table 2.2: Potential Interface Between Business Units and Local Communities
Functional Teams Community Interaction
Business Initial contact with communities
Development/
Feasibility
Human Resources Local employment, hiring, salaries
Land Acquisition Land negotiations, resettlement, compensation
Procurement Local contracts, sourcing of goods and services
Engineering and Project infrastructure siting and development
Logistics
Environmental and Environmental and social impacts—avoidance, mitigation, and
Social Management compensation
Community Liaison Broader stakeholder engagement processes and grievance
management
Government Liaison and coordination with relevant authorities and
Relations government units
External Relations/ Working with media and key external audiences, internal
Communications communication
Contractors Construction activities, workforce interaction, transport/
trucking
Security Company personnel and/or external contractors providing
security
20 Assess the Business Context for CI
Figure 2.2: Examples of Community Investment Linked to Business Competencies and Resources9
Deutsche Bank’s employee volunteer program capitalizes Google Earth uses its cutting-edge technology to
on a core competency—its microfinance know-how—to help Amazonian Indians monitor forest destruction.
deliver high-quality pro bono consulting services to
microfinance institutions in emerging markets. Himal Power leveraged its contacts with UNDP
Research and the Nepal Government to create a rural
Nestlé supports the Philippine and electrification system for surrounding villages.
government's “Donate-a-Classroom Technology
Program” to help alleviate the critical Shell Foundation was able to
shortage of classrooms. Under the Staff
Convening bring domestic banks and other
program, the company donates Time and
Power investors to the table to unlock
Expertise
space in its local factories to be used access to finance for micro-
as public school classrooms. entrepreneurs.
Microsoft and the Aga Khan Apollo Tyres sends its master
Foundation have partnered to Community
Investments trainers to educate its supply
establish Community Technology Facilities Supply chain partners on awareness
Learning Centers in remote rural Equipment Chain and prevention of HIV/AIDS.
areas of Pakistan to foster new Logistics Contacts Point-of-tire sales have also
social and economic opportunities. become an important avenue
for disseminating health
Somboon Potash Mine worked with information to consumers.
Business Access to
local farmers in Thailand to increase
Know- Consumers
yields through the use of fertilizers (of How
which potash is a key ingredient).
A strategic-minded Build on Core Competencies and Business Links
company tends
Companies are encouraged to assess the full range of their business competencies
to support CI to see how they might take advantage of these to help advance local development
programs and efforts. In other words, what else can companies bring to the table besides money,
activities in areas and what comparative advantage do they have over other actors? A strategic-
minded company tends to support CI programs and activities in areas where it, as
where it, as a a business, has the most to offer, and where there are links to its business interests.
business, has the In addition, leveraging nonfinancial company resources can increase efficiency and
most to offer, and multiply the value that business can deliver. This is important because development
needs inevitably outstrip CI budgets.
where there are
links to its business
interests.
Assess the Business Context for CI 21
Table 2.3: Sample Worksheet for Brainstorming Business Competencies and Resources
The community investment manager might meet with managers from the other business units within the company to
brainstorm an initial list of competencies that can contribute toward the community investment program. This list can be
strengthened or formalized through an internal alignment workshop and further developed over time as specific projects are
agreed to with stakeholders.
Type of Skill, Competency, or Resource Description Contributing Potential Timeframe
Unit or Community
Department Application/
Benefit
Staff Skills and Expertise
-Financial
-Legal
-Technical
-Engineering
-Planning
-Accounting
-Medical
-Human Resources
-Other
Facilities
Logistics, Transportation, and Communications
Government Contacts
Donor Contacts
Supplier Contacts
Equipment and Supplies
Technology
Volunteer Time
Data, Studies, Assessments, and Statistics
Convening Power
Advocacy
Procurement
Catering
Other
22 Assess the Business Context for CI
Dialog Telekom (Sri Lanka) - Harnessing Core Competencies in
Information and Communications Technology10
Dialog Telekom defines strategic community investment as sustainable long-
tern investments, in communities where the company operates, that are
aligned with a clear business case. Based on this philosophy, Dialog Telekom
has developed numerous community investment initiatives that combine
local partnerships with harnessing its core competencies in information and
communications technology:
• Creating wireless accessibility for an SMS-based emergency call system
for the hearing and speech impaired.
• Collaborating with the National Blood Transfusion Service of Sri Lanka
to create an SMS blood appeal, matching, and donor management
system.
• Collaborating with the Disaster Management Center to create Sri Lanka’s
first mass alert early warning system for emergencies and disasters.
• Creating a customer care, billing, and relationship management system
that allows post-paid subscribers to donate a percentage of their Dialog
Telekom bill to the company’s Change Trust Fund (up to a maximum of SL
Rst 25). The company makes a matching donation, and the funds collected
are used to support community projects throughout the country.
• Engaging students in real-time interactive learning from experienced
teachers.
• Collaborating with an NGO to create an e-village, combining connectivity
with capacity-building programs (e.g., computer and English training to
facilitate the creation of new information technology-based livelihoods
and improving the productivity of existing livelihoods).
© Dialog Telekom
Assess the Business Context for CI 23
Chapter 3
Assess the Local
Local Context
Context for CI
• Know What You’re Getting Into Before
Engaging
• Map the Social Landscape: Actors,
Institutions, Dynamics, Relationships
• Use this Information to Facilitate
Strategic Planning for CI
Local Context
There are often multiple variables specific to the local context
that need to be understood before a company engages with local
stakeholders on community investment.
Chapter 3: Assess the Local Context for CI
KNOW WHAT YOU’RE GETTING INTO BEFORE ENGAGING
Once a company has defined its business case, its vision and role, and the
competencies and resources it can best offer to support community development, the
next step is to understand the local “ecosystem” it is entering and the implications for
community investment. There are often multiple variables specific to the local context
that need to be understood before a company engages with local stakeholders on
community investment. These can range from historical legacies and conflict settings,
to elite capture and gender issues, to issues relating to local governance or the
availability of capable local partners. Local context analysis considers how community
investment efforts can be helped or hindered by these broader-level challenges. At
the project level, tools such as stakeholder mapping and analysis can help a company
to directly link site-specific risks, issues, and opportunities with its CI strategy.
The injection of new resources through CI can help communities improve their
livelihoods and rebuild their social and economic infrastructure. It can also enhance
their ability to work collaboratively to achieve shared goals. At the same time, who
a company chooses to talk to (and through), to work with, and to target for CI
benefits can profoundly impact power structures and social outcomes. This means
that companies need to guard against inadvertently creating perceptions of bias,
causing conflicts around resource allocation, or deepening tensions between and
within local governance structures. Such decisions should be grounded in local
knowledge of the types of issues discussed in this chapter.
Figure 3.1: Variables of the Local Context
Community Priorities
Stakeholder Groups:
Jobs Individuals and Institutions
Health,
Education Company
Gender and Youth Presence and
Development
Resources
Infrastructure, Natural
Resource Management
Power dynamics and capacity
Potential entry points
How will CI affect stakeholders and their existing relationships?
How will CI be helped or hindered by local factors?
Community Assets
Risk Factors
Corruption Human Natural
capital capital
Elite Capture
Low Capacity Social Economic
capital capital
Community Opposition
Physical
Impact on success of CI capital
Leverage and impact
Assess the Local Context for CI 25
MAP THE SOCIAL LANDSCAPE: ACTORS, INSTITUTIONS,
DYNAMICS, RELATIONSHIPS
Companies do not need to start from scratch to build their knowledge of the local
operating context. There are many existing sources of information that can be readily
accessed. For example, many companies undertake socioeconomic baseline studies
as part of their environmental and social impact assessments; they use stakeholder
identification and analysis techniques to identify potential risks and prioritize
stakeholder groups for engagement; and they conduct public consultations on
project impacts. This usually provides a pretty good picture of the project area, the
likely project impacts, and which stakeholders will be affected and how.
Collect Targeted Data to Inform CI
Because much of the assessment work related to local communities tends to be
project-centric and undertaken using a “risk lens,” it does not always focus on
gathering some of the broader pieces of information needed for CI planning.
Going this route means also using an “opportunities lens.” This type of social
analysis needs to situate the company as one player within a dynamic and
complex network of interrelated local actors and institutions (see Figure 3.1)
and to examine the nature of these relationships and systems in shaping local
development processes and outcomes.
Identifying which Assessment work of this nature typically covers the following areas:
stakeholders to
• Identification of potential opportunities to enhance or generate local benefits
target ensures (assuming that risk mapping has already been done at an earlier stage)
that CI is strategic
and will help a • Mapping of potential partner organizations and institutions, and their
capacities
company respond
to site-specific • Mapping of other development initiatives and programs at the local, regional,
social risks while and national levels (including government priorities and plans)
also taking • Analysis of social networks and systems and the potential for collaboration and
advantage of program synergies (including key actors and their roles in social mobilization
opportunities to and delivery)
have a positive
• Analysis of stakeholder groups and sub-groups that need to be included in the
impact in its areas CI process along with their capacity-building needs
of operation.
• Identification of obstacles, gaps, or deficiencies in the prevailing “system” that
could prevent or pose risks to collaborative planning and delivery of CI programs
Identify and Analyze Stakeholders
Stakeholders are persons or groups who are directly or indirectly affected by a
company’s operations as well as those who may have interests in and/or the ability
to influence the company’s activities (either positively or negatively). Identifying
which stakeholders to target ensures that CI is strategic and will help a company
respond to site-specific social risks while also taking advantage of opportunities to
have a positive impact in its areas of operation. Stakeholder analysis also informs
the development of a company’s “eligibility criteria” (discussed in Chapter 6). It
can be a means to identify those for whom the company can make the greatest
difference in terms of development impact. Wherever possible, a company should
build on stakeholder identification already undertaken for prior processes, including
impact assessments and early engagement activities.
26 Assess the Local Context for CI
In the context of CI, stakeholder identification and analysis might involve the
following steps:11
1. Determine who your stakeholders are.
2. Using a process similar to Figure 3.2, map your stakeholders according to the
degree to which they are affected by the project (horizontal axis) and the level
of influence they might have over company activities (vertical axis).
Figure 3.2: Mapping Stakeholders
Stakeholder Map
High
Capacity to Influence
Low
Low High
Degree impacted by the Project
supportive supportive with conditions
neutral opposed
Further analysis of these stakeholders can help a company assess to what degree its CI
strategy (or existing programs) responds to each of the key stakeholder groups—and the
potential risks or opportunities associated with each. Questions to consider may include:
• Which stakeholders are impacted by the project (how and to what degree)?
• Of those impacted, which are benefiting from the project (how and to what
degree)?
• Which stakeholders are not benefiting (and does this pose any risks to the
company’s business objectives)?
• Which of these stakeholders are supportive of the company and its operations?
Which groups are opposed, and which are neutral?
• How might the company’s CI strategy address the various stakeholders
identified (e.g., keep supportive stakeholders happy and/or help address the
concerns of less supportive stakeholders)?
Assess the Local Context for CI 27
Big-picture ISSUES AND CHALLENGES THAT CAN AFFECT CI
Local variation and complexity is what makes CI from, or underrepresented in, the development
challenging and often unpredictable. Adaptation process. When this happens, the interests and
to the local context is vital. The following is a list opinions of these groups are likely to be overlooked,
of some of the most common issues that have resulting in further marginalization.
presented challenges on the ground. As these
are strategically important for CI planning and Addressing gender imbalances in CI processes
management, companies should be aware of is a particularly challenging matter. Even when
such issues—and prepared to tackle them, as women are “formally” present during meetings,
applicable. established power relations can shape their
behaviors and hinder their effective participation in
Historical Legacy decision making. Gender-responsive facilitation and
In some places, the past actions of governments and techniques, accompanied by attention to gender
private companies have left a legacy of mistrust among in monitoring and evaluation, can help to address
the local population. In some cases this mistrust has these issues. Some practical steps to promote
been in response to environmental damage, land women’s participation include: participatory
disputes, unfair compensation, broken promises, techniques, awareness raising, support around the
corrupt practices, non-transparent behavior, and/or non-traditional roles women can perform, use of
human rights abuses. In other cases, CI has been used gender-sensitized facilitators, timing meetings to
as a means to “manage” community disturbances, accommodate women’s schedules, and organizing
which has had the inadvertent effect of rewarding separate women’s meetings.
violent behaviors and encouraging more of the same.
Such patterns of company-community relations, and Elite Capture13
the accompanying breakdown of trust, can become Some communities can be highly stratified, with
deeply ingrained and difficult to change once they power structures dominated by traditional “elites”
are established. who control most of the community decisions
regarding resource use and management. While
Companies entering into this type of setting need these elites can provide important support early in
to fully understand the historical grievances of the CI process by helping to mobilize community
local communities and the behavioral patterns participation and engaging with the company, they
engendered before beginning any discussion on may also distort decision making and “capture”
community investment. In such cases, longer funds and resources.
lead times may be required to undertake conflict
assessment and resolution, facilitation and trust- Elite capture poses a major threat to CI. It undermines
building processes, and stakeholder engagement to representation, participation, and fairness in the
allow patterns and perceptions to change in ways distribution of benefits. This can lead to perceptions
that can enable effective CI. of bias in the allocation of resources, which in turn
can be damaging to a company’s reputation and its
Gender and Inclusion12 CI program.
At the core of CI strategy is the establishment of
a multi-stakeholder process that will engage and While undoubtedly challenging, certain measures
represent many different groups and sub-groups can be taken to reduce the risk of elite capture.
within the target population. Cultural norms and Information sharing and transparency are
values are important determinants in shaping particularly powerful tools as they help to level
community decision making and participation. Some the playing field by making information broadly
communities may not historically favor participation accessible. Engagement and consultation processes
and inclusion; others do. Similarly, cultural values should also be carefully managed in order to avoid
shape gender relationships and the extent to which consolidating decision-making power in the hands
women can participate in local decision making. of a select few, and to ensure that the views of
This can present a pitfall for companies who, in chosen representatives are “validated” by the wider
good faith, undertake engagement processes they communities they are meant to represent. Finally,
assume are participatory. Experience shows that having a grievance procedure in place to receive
without specific measures to ensure their inclusion, complaints around CI can serve to gather early
the most vulnerable groups are typically excluded feedback and increase transparency.
28 Assess the Local Context for CI
big-picture ISSUES AND CHALLENGES THAT CAN AFFECT CI Continued
Conflict and Post-Conflict14 Other issues that relate to local governance
Planning and managing a community investment include historical distrust between government
program in a conflict or post-conflict setting is a authorities and communities, lack of resources and
complicated task even for experienced practitioners. institutional capacity, patronage politics, and lack
The key risks include the possibility of CI exacerbating of political will. At the extreme, poor governance
existing tensions by favoring certain groups over can go hand in hand with human rights abuses
others and the danger of sparking new conflicts over and security issues, impacting the ability of a
CI resources. At the same time, the needs are great company to build productive relationships with
in conflict and post-conflict environments, and CI is local stakeholders. Depending on the local context,
often one of the few channels for socioeconomic the degree and the nature of engagement with the
development. Done well, it can play an important local government will vary. Careful analysis of local
role in bringing groups together around shared governance settings, good legal provisions, and
interests, facilitating collaborative processes, and smart CI program design features that emphasize
strengthening the capacities of local actors. transparency and participation should help a
company manage potential downsides. Past lessons
Understanding the history of the conflict in the point to the importance of promoting CI without
project area and the often complex interrelationships circumventing local government, and implementing
is critical. In such settings, the measure of effective initiatives to build local government capacity and
engagement may not necessarily be the absence promote accountability and inclusiveness.
of conflict and disagreement but, rather, the ability
of the different parties to maintain a constructive Availability of Reliable Local Partners16
dialogue. Companies can facilitate this process by While good practice encourages companies to
being transparent in their actions, engaging with all work, wherever possible, with and through NGOs,
players, treating everyone with respect, and sharing community-based organizations (CBOs), and other
information openly. Numerous tools and approaches local groups, this can be easier said than done. In
exist to guide companies operating in conflict some contexts, the lack of viable local partners
settings. (See also Useful References section.) presents a serious dilemma for companies wanting
to support community development. Experience
Local Governance Issues15 has shown that even where there are local NGOs
In some settings, government can serve as an and CBOs, these organizations can lack capacity,
effective partner, contributing to strong local accountability, transparency, or representativeness.
participation, accountability, and the long-term CBOs in particular are often informal in structure
sustainability of community development efforts. and tend to reflect the power structures and
In practice, however, the potential for “good cultural values of their communities. This can make
governance” can be hindered by a variety of factors. it difficult for them to adopt new approaches, such
Corruption and vested interests, for example, can as participation and inclusion, that may run counter
pose major difficulties for engaging local government to traditional practices. These issues do not mean,
stakeholders—especially where government however, that companies should not persevere
representatives or traditional authorities fear in trying to work with, support, and develop
community-led planning processes might threaten local organizations as part of their long-term
the status quo. There are also numerous examples commitment to sustainable local development.
where community hostility has been directed at Rather, it means that companies should be realistic
companies due to local development benefits from in their expectations, understand the limitations,
private sector projects not materializing as a result and be prepared to invest time and patience in a
of corruption or lack of government capacity. The long-term process of capacity building and mutual
power dynamics between elected and traditional learning.
authorities can also cause governance challenges.
For a company, these complex interrelationships
can complicate the decision about whom to work
with and how to establish meaningful tripartite
partnerships around CI.
Assess the Local Context for CI 29
Map Project Issues, Risks, and Opportunities to Determine Where CI
Can Be Most Effective
Related to stakeholder analysis is the identification of the key issues and sources of
risk and opportunity in the project’s area of influence (see Tool 5 for more guidance
on assessing risks and opportunities). This type of mapping will help a company to
formulate its specific business case for CI at the site level and determine the degree
to which its CI strategy might respond to such risks and opportunities. While
CI is not meant to be used as a primary risk mitigation tool, it can nevertheless
be effective in addressing certain project risks and other issues of concern to a
company, or as a means of targeting particular groups of stakeholders.
ARACRUZ CELLULOSE (BRAZIL) - MAPPING KEY STAKEHOLDER ISSUES TO INFORM
COMPANY STRATEGY17
To inform its sustainability strategy, Aracruz Cellu- Priority issues that could be potentially addressed, in
lose, a Brazilian company and world leader in the part, through CI are highlighted (our emphasis).
production of bleached eucalyptus pulp, consults its
employees and stakeholders to learn about key is- Other companies can use similar mapping exercises
sues and priorities in relation to the company’s activ- to identify and rank priority issues, risks, or oppor-
ities. In the graph below, identified issues are plotted tunities related to local communities to determine
on a “materiality matrix” according to the degree where CI might be used most effectively.
of importance to stakeholders (vertical axis) and the
degree of impact upon the business (horizontal axis).
1. Ethical behavior 15. Local and regional economic
High
8 2. Corporate governance impacts of Aracruz activity
6
3. Climate change 16. Relationships with Indians
2 4. Product responsibility 17. Relationships with Quilombolas
16
Importance to Stakeholders
5 5. Community impacts of 18. Opposition from groups to
1
19 plantations plantations/agribusiness
17 15 23
18 6. Biodiversity impacts of 19. Impacts on fishing communities
plantations 20. Occupational health and safety
11
10
24 12 7. Technical management 21. Workforce diversity and equal
13
22 20 8. FSC certification opportunity
21
3 9. Use of genetically modified organisms 22. Labor rights and practices
7 10. Energy use 23. Wood supply from third parties
9 4 14 11. Emissions, effluents and waste 24. CSR related requirements for
12. Emissions, effluents and waste outsourced work and suppliers
Low
13. Toxic/hazardous chemicals used
14. Transport impacts
Low High
Impact on Business
30 Assess the Local Context for CI
Consider Approaches for Understanding Community
Dynamics and Relationships
Relationships within and among stakeholder groups are constantly changing and
evolving. Because such dynamics can have direct implications for CI outcomes and
overall relations between the company and its stakeholders, it is useful to try to
understand the range of interests, motivations, and interrelationships.
Before looking at the tools and approaches for understanding community
relationships and dynamics (see Table 3.1), it is important to highlight three points.
First, NGOs, CBOs, local governments, and communities are complex entities.
Second, their interests and needs vary, and at times may be at cross purposes. Third,
these type of assessments are, in and of themselves, a form of intervention. Given the
importance of managing expectations around CI, if a company is not yet prepared to
fully engage communities on the topic, it may wish to keep the process low key by
using existing channels (e.g., ongoing consultation processes or survey work around
its environmental and social impact assessment) to collect this additional data.
Table 3.1: Useful Approaches for Understanding Community Relationships
and Dynamics18
Approach Definition Purpose
Participatory Techniques that incorporate Empower communities’
Rural Appraisal knowledge and opinions of local decision-making processes
(PRA) people in the processes of data and facilitate community
collection, action planning, and planning and monitoring.
measuring results.
Social Network The mapping and measuring of Identify important actors,
Analysis (SNA) relationships and flows among relationships, sub-groups,
people, groups, organizations, roles, and network
or other information/knowledge characteristics to answer
processing entities (see Tool 4 for questions about resources,
details). influence, and information.
Appreciative A methodology for discovering, Empower organizations,
Inquiry/Assets understanding and fostering networks, and
Mapping innovation via the gathering of communities to take
stories, visions, and other forms of charge of their futures
dialogue. and engage in a visioning
and strategic planning
process building on assets
and best practices already
present in the system.
Identify Local Institutions and Potential Partners
Assessing who is who and which organizations could be potential partners for CI is
an important part of understanding the local context. Partnerships are a cornerstone
of strategic community investment. Ideally, they should be pursued in the early
planning stages as part of a company’s sustainability and exit strategies. Partnering
both supports local capacity and helps avoid the risk of creating dependence on the
company. Where possible, it is good practice to explore working through existing
organizations or programs before going out and creating new ones.
Assess the Local Context for CI 31
INSTITUTIONAL MAPPING: AREAS FOR INVESTIGATION
• Reach (local, regional, national, and international)
• Thematic areas of expertise (health, capacity building, water)
• Delivery capacity, including staffing
• Existing relationships, contacts, and networks
• Geographical areas of operation
• Core values (which should be compatible with the company’s)
• Reputation and track record
When identifying local institutions and programs, consider government, business,
NGOs, civil society organizations, donor agencies, and foundations. The aim of
identifying and mapping local institutions is to:
• Find out what programs and initiatives already exist locally that the company
could support
• Find out the government’s development priorities and programs
• Find out what type of expertise and delivery capacity exists locally
• Identify potential implementation partners
• Understand what others are doing to avoid duplication of efforts
• Learn which programs have worked well, which have not, and why
For further guidance, see Tool 3 on institutional mapping.
USE THIS INFORMATION TO FACILITATE STRATEGIC
PLANNING FOR CI
Mapping the social, institutional, and stakeholder landscape will enable a
company to gauge the extent to which the local setting is conducive to sustainable
community investment and to plan accordingly. Specifically, this knowledge will
feed directly into the planning process for CI by helping to:
• Define the program scope for CI. The more supportive the local context, the
more ambitious the scope of the CI program and activities can be.
• Determine the capacity-building strategy. The timing, level of effort, and
specific strategies for local capacity building will in large part be driven by the
needs, characteristics, and challenges of the local context.
• Determine the choice of implementation model. The legal and regulatory
context, as well as the existence of local capacity, programs, and partners that
the company can work with or through, will help determine which delivery
mechanisms work best in a given context.
• Develop the parameters for a handover or exit strategy. One of the key
considerations of a viable handover or exit strategy is the level of readiness and
capability of local development actors to sustain and drive the development
agenda in their communities after the company withdraws or reduces its support.
32 Assess the Local Context for CI
Assess the Local Context for CI 33
34 Assess the Local Context for CI
Chapter 4
Engage Communities
on CI
• Why Engagement for CI is Different
• Support Community Planning Processes
• Five Phases of Community Planning for CI
Engagement
Community
Engagement
Community
The way dialogue is initiated with communities around the topic
of CI can have long-term implications for the relationship.
Chapter 4: Engage Communities on CI
“Our relationships As discussed in Chapter 1, good stakeholder engagement is an essential
prerequisite for community investment. As a general rule, a company should try to
with local establish ongoing engagement on its overall operations—and the issues of highest
communities concern to local stakeholders—before engaging communities on CI. Making
around the globe investments in community development when there are major outstanding issues
or inadequate relations established may otherwise prove counterproductive. Under
are complex and such circumstances, stakeholders can sometimes perceive community investment
dynamic. We as a company “pay off” in order to avoid addressing the real concerns of the
know that the community. As a result, even when these investments do generate local benefits,
relationships they may not generate the type of goodwill and trust the company is seeking.
we build are Focusing on the quality of stakeholder engagement is important in that it helps
fundamental to to lay the foundation for mutual respect and trust that will affect all aspects
the success of our of company-community relations, including CI. An integrated approach to
engagement, which includes CI, will usually deliver the best results. This assumes
business.” that company actions incorporate the following:
—Richard • Effective management of all aspects of company-community interface,
including grievance channels
O’Brien, CEO,
Newmont Mining • Cross-functional coordination and accountability across business units for
Corporation19 community relations
• Meaningful stakeholder engagement processes, especially during key stages of
the CI process
• Capacity building of stakeholders to effectively participate in and drive CI
For detailed guidance on how to undertake stakeholder engagement in private
sector operations, please see IFC’s Stakeholder Engagement Handbook.20
Indicators of Community Engagement Effectiveness21
• Communities say they have access to the information they need on issues
that affect them
• Communities say they feel listened to and that the company takes their
concerns and grievances seriously
• Communities express satisfaction with their level of involvement in
decisions that affect their lives
• Community elders and leaders state that they feel respected by the company
• People wave back when greeted
• The same grievances do not arise over and over
• Company staff feel welcome visiting local communities
• Women and minority groups in the community say they feel their
interests are taken into account
• There is a high level of participation in consultation meetings
• There are no disruptions due to community unrest
Engage Communities on CI 35
Table 4.1: Invest in Building Trust with Local Communities22
Trust Builders Trust Breakers
Benefits • Company is reliable and predictable; it • Company does not follow through on its
Distribution follows through on its commitments/ promises
promises • Company does not respond to letters or
• Community members have direct access community requests
to the company decision makers who • Company deals with “representatives” who
determine benefits distribution lack community support
• Company is seen as trying to generate • Company makes deals in secret
maximum benefits for local people • Company plays groups with different
• Community is well-informed about future interests off against each other
prospects or plans
• Company is clear about criteria for
distribution of benefits and applies them
consistently
• Community is fully aware of company
criteria
Management of • Company acknowledges the potential • Company addresses symptoms of problems
Project Impacts impacts of its operations, takes rather than root causes
responsibility, and works with communities • Company provides little information
to prepare for and manage these about likely project impacts, day-to-day
• Company is seen helping out people operations, decision-making processes, or
with small problems that are beyond its future plans
immediate interests • Company is paternalistic in solving problems
• Company maintains an accessible and rather than working with communities to
responsive grievance mechanism come up with joint solutions
• Communities are regularly consulted and
have a say in solving problems as they arise
Behavior • Community meets company staff in • Company only engages with the community
informal and personal settings even when when it wants something or when the
there is no “business” to be discussed community behaves in an obstructive
• Company staff respect local culture, social manner
and religious norms, and values • Company staff violate cultural and religious
• Traditional leaders are treated with respect norms and values
• Company shows respect for culturally • Company managers use technical or
significant sites legalistic language that communities don’t
• Company uses language that people understand
understand • Company staff behaviors are seen as
• Expatriates speak at least a few words of arrogant, flashy, and/or wasteful
the local language • Company is seen to maintain close relations
• Staff do not seem hurried or impatient with oppressive or corrupt authorities
with local people (take time to listen in • Company only visits communities when
meetings, drive slowly through villages, accompanied by security forces and/or has
greet people, and so forth) an armed presence at the company gate
• Company regularly acknowledges it needs • The company consults the community but
community involvement for a project to be then provides no feedback nor disseminates
successful results
• Company reports back regularly to the
community on follow up and next steps
36 Engage Communities on CI
WHY ENGAGEMENT FOR CI IS DIFFERENT
Engaging with local stakeholders on community investment differs in one important
way from the ongoing stakeholder engagement processes a company normally
conducts in other aspects of its operations. While most consultation activities seek
stakeholder feedback on key issues and project impacts to enable the company to
improve its own actions and decision making, engagement on CI must promote
stakeholder-driven action and decision making. In other words, a company needs
the active participation and leadership of local stakeholders to generate successful,
sustainable community investment. This means that the approach and methods
used in this type of engagement need to generate a much more intensive level of
stakeholder involvement and ownership of the process.
Adopting a Is the Company Ready to Engage on CI?
community- Adopting a community-driven approach often calls for a significant shift in mindset
driven approach on the part of both the company and local communities. For a company, moving
often calls for a from a central role (in decision making and delivery of CI benefits) to a supporting
role in a multi-stakeholder process (partnering, facilitating, co-funding) necessitates
significant shift in readiness on a number of levels:
mindset on the
part of both the • Willingness to give up some control in exchange for greater local ownership
company and local and sharing of risks
communities. • A shift away from “do-it-yourself” to helping ensure that things get done
• A long-term commitment to an iterative process
• A significant up-front investment in expertise, facilitation, and capacity building
• Patience and recognition that results take time
• Support from senior management on all of the above
© T.Pollett
Engage Communities on CI 37
Core Principles of Community-Driven Development (CDD)23
Local participation: The participation of households Representation and social inclusion: It is nec-
and communities in development decision making essary to acknowledge that all communities are
is based on the proven fact that local people are heterogeneous, not homogeneous. Not all com-
capable agents of their own destiny. Even when munity households and members have the same
illiteracy is high and education low, local populations access to power and resources—some are more
are fully able to explain and assess the reality of privileged; some are more marginalized because
their lives, to make rational decisions about resource of age, gender, class, caste, ethnicity, and other
management, and to plan and manage their own factors. CDD emphasizes that sustainable devel-
futures. Thus, local participation in any development opment must include all groups in a community in
intervention is fundamental to successful change. the process of change.
Community empowerment and ownership: Governance and transparency: Just as sustainable
Sustainable development is not possible without development must include all social groups in a
a local sense of ownership and empowerment. community, all decisions must conform to widely-
Many past development failures resulted from accepted rules of public interaction and governance.
a top-down decision-making process. When Under CDD, development activities—including
project interventions are designed without local self-assessment, development planning, project
participation, communities are treated as passive implementation, and evaluation—are transparent
recipients of outside assistance. CDD assumes that and accountable to community members and other
local communities can prepare and manage their stakeholders.
own development plans and interventions, and
this ownership is the foundation of community
empowerment. Capacity-building interventions are
often required to support such processes.
How a Company Engages Can Determine the Success of CI
“How” a company engages will likely determine the success of CI. The way
dialogue is initiated with communities around the topic of CI can have long-term
implications for the relationship. Some ground rules include:
• Engage in ways that encourage trust and collaboration (e.g., openness,
transparency, respect, inclusiveness)
• Position the company as a partner in a multi-stakeholder process rather than as
the principal actor responsible for delivering local development
• Manage expectations
• Involve government and other key stakeholders early on
• Keep track of commitments made, and follow through
• Ask communities which representatives they trust, and work with those
wishing to make a positive contribution
• Verify the views of stakeholders’ representatives with the broader community
to ensure accountability
• Respect traditional systems and processes for community decision making
• Report back regularly and disseminate outcomes
38 Engage Communities on CI
SUPPORT COMMUNITY PLANNING PROCESSES
Engagement around CI is really about a company helping to support and facilitate
a process of community planning. In many respects, the community’s own planning
process—which empowers community members to define their own futures,
identify their own opportunities and assets, and do their own prioritizing of areas for
potential community investment—parallels the internal processes of self-assessment,
diagnostic, and visioning undertaken by the company in Chapter 2. (Company
strategy and community priorities will subsequently come together in Chapter 6 to
determine which areas are best suited for company-community collaboration.)
Community planning is a means to bring people together to define a collective
vision and to agree on a set of priority areas or interventions that becomes their
development action plan. Companies should not see the results of community
planning as something they are obligated to support regardless of their nature.
Instead, the objective should be to work toward a joint vision, recognizing that the
company will only play one part in the development process, and that other actors—
including government, civil society, donors, and communities themselves—will also
need to play their parts.
Use Participatory Methods
Participatory processes are among the best ways to cultivate stakeholder
Participatory involvement and ownership. These processes can contribute throughout the entire
processes are cycle of CI: from planning, assessment, visioning, and prioritizing to project design,
among the best implementation, and monitoring. Although participatory processes may take more
ways to cultivate time and/or require additional resources in terms of expertise and facilitation, they
can have significant beneficial effects on the outcome (e.g., promoting mutual
stakeholder learning and building trust).
involvement and
ownership. Community planning processes normally draw on a set of Participatory Rural
Appraisal tools. While these tools facilitate data collection, the emphasis is on the
process and the valuable discussions, learning, and sense of community ownership
it generates. Each tool can be used on its own. However, since each works in slightly
different ways, it is worth using at least two or three different tools to collect and
triangulate information, and to generate discussion. Common tools include:
• Household surveys
• Semi-structured interviews
• Focus group discussions
• Seasonal calendars, timelines, and trends
• Resource mapping and village maps
• Venn diagrams
• Poverty and vulnerability mapping
• Preference, matrix, and wealth ranking
Engage Communities on CI 39
Integrate Gender Perspectives
There is growing evidence that women’s participation in community investment
programs facilitates better and more broad-based development outcomes. Many
good practice companies take deliberate steps to ensure that women are included
in the engagement process, and that gender perspectives are taken into account in
planning and decision making.
Newmont (Ghana) - Gender mainstreaming program24
Newmont Ghana Gold Limited began developing Since the WCC was launched, there has been a
a new gold mine in the Brong Ahafo Region of significant increase in women’s representation on
Ghana in 2005. A key priority was to ensure broad various committees (from less than 10 women in
stakeholder acceptance of the company in an area 2008 to about 45 by the first quarter of 2010). The
where 68 percent of households are female-headed WCC has become a successful organization, running
households and classified as “vulnerable.” various capacity-building activities for its members
and other women in the community. One result
While women comprised 51 percent of the is that the members of the WCC are now being
population, there were few women on the various trained in entrepreneurship and on how to establish
community engagement bodies established to and manage the microfinance revolving fund that
represent the project-affected population with they set up in response to their identified need for
regards to compensation and community decision business credit.
making. To address this gap, the company engaged
a gender specialist to lead an awareness-raising and Another interesting aspect of the program is a
“recruiting” campaign to encourage more women to “gender sensitization” component for men in the
join these consultative bodies. communities. Although many men and chiefs were
supportive of the WCC, some questioned the special
As a result of the campaign, a 75-member Women’s focus on women. Because the success of the WCC
Consultative Committee (WCC) was set up. It initiative required buy-in from both men and women
consisted of a cross-section of women, including to avoid any potential backlash, community drama
local business leaders, teachers, assembly members, and training techniques were used successfully to
and household farmers from the Ahafo area districts. generate understanding and broad support. As a
Leadership training was provided to the members result, in September 2009, 32 women stood for
of the committee. The WCC holds regular meetings elections and 27 were elected to represent their
with the company on issues relating to environmental communities on a newly constituted Community
management, new infrastructure, educational, Consultative Committee (another initiative by the
economic, and training opportunities, and women’s company to enhance stakeholder engagement).
involvement in local development. Following each
meeting, committee members organize community
meetings with larger groups of women to disseminate
the information and get feedback.
Work through Multi-Stakeholder Mechanisms
Bringing stakeholders together through formal or informal mechanisms for
discussion, planning, and decision making around CI initiatives can be an effective
way to build consensus and work through potential concerns or conflicts.
Companies are increasingly turning to multi-stakeholder processes, mechanisms,
and partnerships as the preferred approach to development action.
40 Engage Communities on CI
Lonmin (South Africa) - lessons from the rekopane Development Forum25
Lonmin is a producer of platinum group metals A number of key lessons emerged from the process:
operating in South Africa. The company has
embarked on a multi-stakeholder effort to help • A Memorandum of Understanding (or other
bring prosperity and sustainable development to the guiding document) that clarifies roles and
local communities in which it operates. Alongside responsibilities helps to manage project
Lonmin, there are three key stakeholder groups— collaborations and to enhance accountability
the traditional authority, local government, and amongst forum members.
local mining companies—that share the same vision • Selection of projects for implementation
for socioeconomic development. should focus on those that are realistic and
for which there is general commitment and a
While these stakeholders have long been operating capacity to deliver.
in the same geographical area, they often worked
in isolation as there was no formal platform for • Alignment of projects with local development
communication and engagement. It is against this plans for the area, as well as with the
background that Lonmin identified an opportunity strategic plans of the company and other
stakeholders, is vital to getting collaboration
for the creation of a multi-stakeholder forum.
off the ground.
The Rekopane Development Forum (RDF) was • It is important to consider how facilitation of a
formed in May 2008 with the following objectives: multi-stakeholder forum will be managed. In
the case of Lonmin, local stakeholders chose
• Identify gaps and overlaps in current and to facilitate the RDF on a rotational basis, with
planned local development projects the hosting party sending out the invitations,
agenda, presentation materials, and minutes
• Jointly plan and implement projects
after the meetings. Such arrangements have
• Jointly achieve project outcomes and common worked well thus far.
goals
• While representation from a strategic level
• Build sustainable relationships to improve (middle to senior management) is needed, an
community well-being operational representative is needed to facilitate
the process. (The “strategic” representative
Since its establishment, the forum has proven to should have the authority to speak and
be an effective mechanism for collaboration. RDF make project-related decisions on behalf of
defined key areas for collaboration and provided the organization, while the “operational”
representative will be responsible for ensuring
an important focal point for information sharing
tasks related to forum decisions are carried out
about community development programs within
on the ground.)
the greater Lonmin community.
• Formal channels should be built to ensure
that the activities of the development forum
are properly communicated back to local
communities.
Engage Communities on CI 41
A good FIVE PHASES OF COMMUNITY PLANNING FOR CI
participatory
There are a number of approaches which enable information gathering for
assessment
development planning while, at the same time, building community ownership
process empowers through a process of active discussion, debate, and self-reflection around the
local communities issues raised. Companies frequently engage experienced NGOs, consultancies,
to examine the and other organizations with expertise in participatory techniques, facilitation
skills, and local knowledge to conduct this process. Typical community planning
various ways around CI has five phases:
in which their
own assets and 1. Establishing the dialogue with communities (raising awareness of the need/
opportunity for change)
strengths can
be leveraged 2. Participatory assessment of community assets (analysis of present state/baseline
to achieve their conditions)
development
3. Facilitation of community visioning (brainstorming and agreeing on a desirable
goals. future state)
4. Prioritization and ranking (of actions or interventions to achieve the
community’s vision)
5. Action planning (defining practical steps to achieve the vision)
Establishing the Dialogue
The way a company (and facilitation team) initiate the discussion on CI with
communities is critical for setting the right tone and managing expectations.
This is an important opportunity for the company to frame the issues and share
its own thinking—its vision and values, how it sees its own role in helping to
promote sustainable local development, and how it wishes to engage and work
with communities, local government, and other partners to achieve shared goals.
It is also a good time to set out some initial parameters for company support and
seek community input.
Assessment of Community
Context and Assets
Five Capitals Framework26
When it comes to identifying
potential areas for community L SO
investment, good practice has moved PITA CIA
CA LC
away from traditional surveying of AL AP
community “needs” and “wants” SIC IT
Social networks, AL
PHY Infrastructure,
(which inevitably results in long equipment organizations, etc.
wish lists and the expectation that
AL
HUM
APIT
the company is responsible for
meeting these needs). Instead, more Water, forests, Skills, health,
AN C
LC
land capacity
strategic approaches seek to reframe
URA
the conversation by encouraging
APIT
Assets, savings,
communities—through participatory
NAT
income, etc.
AL
assessments—to consider their own
existing resources and assets and to ECONOMIC CAPITAL
uncover opportunities to build upon
these inherent strengths to meet their
development goals.
42 Engage Communities on CI
A good participatory assessment process empowers local communities to examine
the various ways in which their own assets and strengths can be leveraged,
supported, and improved to achieve their development goals and aspirations.
Generally speaking, an assessment will typically cover the following:
• Assessment of the local context through a CI lens (demography, livelihoods,
institutions, services, infrastructure, health and education, and so forth)
• Identification of the various groups and sub-groups within the
community (how they interact; differences in their realities, interests, issues,
and priorities; how these may conflict or converge)
• Community strengths or “assets” (what can the community contribute and
what role can it play in driving its own development?)
• Active facilitation to enable all voices in the community to be heard and
included in decision making (not just the most vocal or influential voices)
Figure 4.1: Community Assessment: Moving from “Needs and Wants” to “Assets and Opportunities”27
“Wants” Assessment “Needs” Assessment “Assets and Opportunities”
Assessment
• Communities make demands • Community-level assessments • Assessment identifies community
• Priorities defined by elites identify needs based upon review of assets that can be leveraged by CI
• Creates sense of entitlement current realities • Considers not just existing reality, but
• Raises expectations that company future changes and opportunities
will meet needs
Level of Community Ownership
Low High
Sustainability
Community Visioning: Opportunities and Constraints
Simply put, visioning is about anticipating a future reality and planning for it. The
process assumes that the presence of the company and the project signifies change.
Visioning helps the community, the company, and the local government come
together to discuss what that change might look like, come to terms with it, and
approach it collectively. The visioning process forms the basis for the identification
of potential community investments. The preceding assessment process will typically
result in a collective snapshot of the current reality and the underlying issues faced
by various groups in the community, as well as the community’s strengths and
assets. This knowledge then informs the visioning phase.
Ideally, this process should provide a platform for articulating a joint vision on the
development of the local area; the nature of the relationship between the company,
the local government, and the community in achieving this joint vision; and the
supporting role that the company will play in the development process. The output
of this stage is often both a collective vision and the identification of the potential
interventions that are needed to realize this vision (within a designated timeframe).
Engage Communities on CI 43
Key Questions for Visioning
• What is the community’s vision of its own development path?
• What development opportunities might the project bring and how can
the community best organize itself in order to benefit?
• What are the root causes and constraints faced by the community that
prevent the current situation from improving?
• What are the potential interventions needed to take advantage of
opportunities and/or to address the challenges experienced by various
groups?
• Who are the key actors in the area (government, companies, NGOs,
donors, community organizations, and so forth) and what are their roles
in supporting sustainable community development?
• Who is best placed to support the community in achieving its vision and
in what capacities/areas?
• How does the community’s vision compare with the company’s vision of
its own role in supporting local development?
• What might a “joint vision” among the company, the community, and
other key actors look like?
Prioritization and Ranking
The fourth phase of community planning focuses on prioritizing a “shortlist” of
actions or interventions identified during the visioning process (based on which are
most critical to achieving the community’s development vision). Prioritization can be
a challenging process given the diverse interests and needs of various groups within
and among local communities (e.g., between women and local youth, or fisherman
and farmers). This exercise requires skilled facilitation: (i) to ensure that the ranking
is done in a collective, inclusive, and transparent manner that avoids “capture” by
any one group; and (ii) to bring the community together around shared interests
and common goals.
Communities As part of managing expectations, the company should be actively
should be communicating the nature of its role in the CI process and the parameters of
its potential support. At the same time, communities should be encouraged to
encouraged to think selectively about the areas where the company’s support is best placed
think selectively as well as the areas where the contributions of other actors can be effectively
about the areas leveraged. The process should also consider which actions can be achieved by the
community itself, and what, specifically, communities are willing to contribute in
where the
terms of their own resources and capabilities.
company’s support
is best placed Some projects on the community’s list may be a good fit with the company’s
as well as the strategic business objectives and core competencies, while others may not.
However, the company can often play an important role in facilitating between
areas where the the community and other potential partners (with whom the company has
contributions of relationships)—such as suppliers, government ministries, or international
other actors can organizations—to help communities get support for implementing development
projects that fall outside the company’s scope. (The overlap between community
be effectively priorities and company priorities in the context of CI and the basis for selecting
leveraged. investment areas for company support will be discussed further in Chapter 6.)
44 Engage Communities on CI
Action Planning
During this stage, the community moves from the prioritized list of potential areas
for intervention to defining practical steps for achieving it vision. A typical action
planning process may include the following steps:28
• Translate community visions into long-term goals and shorter-term objectives
• Identify the highest priority activities to which resources will be committed
• Determine alternative solutions to address problems
• Determine broadly the roles and responsibilities of various parties
• Determine what additional information needs to be gathered
• Agree on timeline and practical actions to be taken
© R. Parker
Engage Communities on CI 45
“By promoting
participatory VERACEL (BRAZIL) - SUPPORTING COMMUNITY PLANNING THROUGH
planning...a SOCIAL NETWORKS30
sense of trust and Veracel, an integrated forest products company based in southern Bahia, is a
respect between joint venture between Fibria of Brazil and Stora Enso of Sweden. One of the
both sides begins company’s strategic goals is to build good relations with communities in the
areas where it has eucalyptus plantations.
to be built.”
In 2006, the company launched a “Social Networks Program” in partnership
—Veracel29 with the Institute for the Development of Social Investment (IDIS) to establish
an active dialogue with key stakeholders and to find collective solutions to local
development challenges. The intention was to overcome any initial mistrust by
the communities and to avoid creating dependencies. This was done through a
participatory planning process that involved the following phases:
• Social inventories undertaken to study the socioeconomic context of
the pilot areas and identify local organizations and leaders to support
the creation of the networks
• Community meetings and capacity building of local facilitators to
agree on network objectives and build a cadre of local facilitators to run
subsequent workshops and mobilize new people and organizations to
join the network
• Participatory assessment of community assets, visioning, and
action planning was fundamental to the evolution of the program
because it focused the dialogue on the potential of each locality to
solve its own problems
Results of Community Planning: Through facilitated workshops and action
planning, the networks identified a number of projects to help achieve their
vision. This included the formation of a cooperative to produce sweets, a
craftsmanship project, and a cassava flour production project.
The Company’s Role: To help ensure project viability, Veracel convened a
meeting to introduce the communities to companies, banks, and suppliers
that could provide support for implementation. For example, one local bank
provided financing for the flour production project, while the craftsmanship
project formed a partnership with a local merchant. Veracel also engaged
a consulting company to qualify craftsmen to use eucalyptus wood for the
production of artifacts.
Outcomes: Overall, the process has helped the company to achieve its objective
of building a constructive partnership with local stakeholders. The success of
the pilot has inspired Veracel to extend the program to additional sites.
46 Engage Communities on CI
Chevron (Nigeria) - Community-driven Development Planning Approach31
In 2005, Chevron Nigeria embarked on a new “certified” then divided into 19 SLA teams based on
strategy to support the Niger Delta communities their existing knowledge and working relationships
in its operating area. The new strategy, called the with each RDC. Each team also trained and engaged
Global Memoranda of Understanding (GMOU), is community members as “co-facilitators” to participate
a model based on community-driven development in data collection, validation, and other steps. Over
planning. Chevron Nigeria has signed GMOUs with 125 people served on the SLA teams.
eight Regional Development Councils (RDCs) that
were formed to represent the interests of some 425 To familiarize community members and implementing
communities with an estimated 850,000 people NGOs with the process, pre-entry visits (including
who live near Chevron’s onshore oil facilities and community sensitization), an NGO meeting with
operations. The RDCs, supported by Project Review stakeholders, selection of local facilitators, and
Committees, are responsible for planning and planning were undertaken after the initial training
managing community development projects in their seminar. These meetings provided opportunities for
geographic areas. community members to ask questions and articulate
their own expectations.
Along with its new strategy, the company decided
to revamp its approach to community investment, SLA field work was conducted over six months. The
and adopted a Sustainable Livelihoods Assessments teams triangulated information from various sources,
(SLA) approach to assess the development context including secondary data, transect walks, community
within these communities. Each RDC engaged mapping, focus group discussions, seasonal
a team of local NGOs to conduct an SLA in its calendars, wealth ranking, problem analysis, and
geographic area. With field work completed in observations. The teams estimated that at least 850
2006, these SLAs represent the most complete and community residents participated in these exercises
current analysis of the needs of and development or attended a town meeting to validate the research
opportunities available to communities in the Niger results. The discussions challenged communities to
Delta. differentiate between “wants” and “needs,” and to
make hard decisions on projects that would spread
NGO Training and Sustainable Livelihood benefits most equitably and have the highest chance
Assessment of success.
Chevron invested in the training of local NGOs to After the field work was concluded, a first draft
carry out the assessments. While this was very time of each SLA was written up. Team members then
consuming to start with, it was itself part of the debriefed each community and shared the draft
strategy to build local capacity. It also provided a set assessments with them. Prior to the documents being
of trained third parties who could obtain information finalized, community members were encouraged to
that was considered more objective than if the make comments and inputs.
exercise had been carried out by a team of company
staff. Twenty-nine NGOs from throughout the Niger The SLAs then formed the basis for communities
Delta participated in a training on community-driven (RDCs) to prepare their individual Three-Year Action
development and sustainable livelihood assessment Plans, covering priority areas for development and
(SLA) led by a leading Nigerian NGO and a U.S- delegating responsibilities.
based NGO. Thirty-six trained NGO specialists were
Engage Communities on CI 47
Chapter 5
Invest in Capacity
Building
• Be Strategic—Five Questions to
Ask Up Front
• Target the Right People
• Build the Right Types of Capacities
• Evaluate Capacity-Building Results
Capacity Building
Capacity Building
Capacity building requires careful planning to target the right
people and build the right skills at the right time and over time.
Chapter 5: Invest in Capacity Building
Building human Capacity building is one of the least understood yet most important aspects of
development work. Building human and social capital is integral to strategic
and social capital community investment because it leverages and multiplies the impact of CI
is integral to resources by strengthening local partner organizations, promoting self-reliance,
strategic community and increasing the likelihood of project success. Effective capacity building benefits
both the company and local stakeholders by generating inclusive processes that
investment because strengthen trust and build commitment and good relationships.
it leverages and
multiplies the For many companies, capacity building is their exit and sustainability strategy rolled
impact of CI into one. Capacity building requires careful planning to target the right people
and build the right skills at the right time and over time. Evidence suggests that
resources. capacity-building initiatives tend to be more effective when they are conceived as
an ongoing strategic commitment. There is a range of different capacity-building
interventions that companies can choose to support depending on need, context,
and desired outcomes.
BE STRATEGIC—5 QUESTIONS TO ASK UP FRONT
Because “capacity building” tends to be a general term which is not always well-
defined, there is a risk that companies can waste time and money on programs
and activities that end up building the wrong skills, targeting the wrong people, or
being detached from the CI process. “One-off” events or training without hands-
on learning and follow-up also tend to have limited effectiveness. Capacity building
investments often work best when they are conceived as longer-term programmatic
interventions that are targeted and integrated with the CI project cycle (see Figure
5.2). To get the most out of such efforts, companies may find it helpful to ask a few
simple, yet strategic, questions upfront:
• WHOSE capacity are we trying to build?
• Capacity to do WHAT and WHY?
• WHEN do we need to build these capacities?
• WHO should deliver the capacity building?
• HOW will we know if we have succeeded?
Target the Right People
There are several target groups that usually require some form of capacity
building or skills enhancement within the context of CI planning and
management. These include the company, communities (individuals, groups, and
community organizations), NGOs, and local government. In some cases, capacity-
building efforts will need to target a broad group; in other cases, individuals or
smaller sets of representatives may be selected for training based on the specific
roles or functions they are expected to carry out.
Invest in Capacity Building 49
Figure 5.1: Examples of Stakeholder Groups Targeted for Capacity Building32
In Colombia, Ecopetrol has DFCU Bank in Uganda provides basic Kinross Maricunga, a Chilean gold
partnered with key oil companies financial training to current and mining company operating in the
and IFC to help civil society prospective female clients and Andes close to indigenous people
organizations in five regions women's organizations on topics that and a national park, organized
improve the performance of range from developing good savings training programs for local
Royalty Investment Monitoring habits to applying for bank financing. communities to enable them to start
Committees. These committees their own income-generating
hold local governments account- enterprises around ecotourism.
able for their use of oil and Women’s
mining royalties. Groups BHP Biliton organizes
practice-based training
Civil programs for its commu-
In Peru, Minera Yanacocha Society/ Local
Communities nity relations professionals
partners with IFC to provide NGOs around the globe. The aim
modern financial management is to improve their
systems and on-the-job training knowledge, skills, and
to the local municipality competencies in working
receiving the mine’s tax with local communities.
revenues.
Capacity
Government Investments Company
Communities
A company may choose to work with communities directly, through local
organizations that operate in the area, or through more informal community-based
organizations (e.g., church groups, women’s cooperatives, and farmers’ groups).
Made up of community members, CBOs, if properly constituted, often have the
best understanding of community issues and the most legitimacy.
CBOs can also face a number of issues, such as lack of formal registration, that
make it difficult for them to gain recognition from outside groups (including the
company). In addition, CBOs can at times be poorly managed and lack proper
organization and resources. Many have no bank accounts or formal systems in
place, posing a challenge for companies wanting to work with them. Not all CBOs
may be representative of communities or have democratically elected members or
be socially inclusive. For these reasons their accountability to the wider community
may be weak. Despite the challenges, targeting CBOs for capacity building can be a
worthwhile investment given their direct links at the community level.
Nongovernmental Organizations (NGOs)
NGOs can play an important role in delivering local services and serving as
advocates for community interests. In some cases, they are seen by communities
as more impartial than government organizations and company representatives.
While NGOs tend to be better managed and better resourced than community-
based organizations, some also struggle with capacity issues related to effective
management systems, funding, skills, and transparency. NGO interests may not
necessarily be aligned with the communities they are intended to serve or with the
company’s objectives. Companies that invest in capacity building of NGOs (and
CBOs) usually do this in order to serve CI-specific needs and objectives related to their
project. It is worth remembering, however, that many NGOs will be around long after
50 Invest in Capacity Building
projects are completed; so connecting the capacities they are gaining in the short
term to a longer-term perspective is important. If capacity building is effective, NGOs
should be able to apply their acquired experience and skills to manage future projects
in other areas and with other companies or organizations.
Local Government
Local government is not always included in capacity-building considerations, yet it is
frequently the critical “missing link.” It is the institution most likely to provide continuity
in an area after the company has left and it usually has the statutory responsibility to
provide basic services to communities—often the very services that companies will help
support through CI. Capacity building of local government institutions, however, has its
own particular challenges (including governance issues, lack of resources, management
capacity, and technical skills, as well as constraints at the policy level). Nevertheless,
companies can and do engage to help address some of these gaps.
Company Staff
Engaging with local stakeholders to develop successful CI initiatives requires a set of
competencies and skills that many companies might not have up front and may need
to acquire either through training, recruitment, or the hiring of consultants and others
with specific expertise. Table 5.1 illustrates some of these skills and areas of expertise.
Table 5.1: Sample of Company Competency Dimensions/Key Skill Areas for CI
Stakeholder Analysis and Engagement Communication and People Skills
• Stakeholder analysis - ability to identify and analyze • Ability to initiate and manage partnerships
relevant stakeholder groups and their interests • Ability to give and receive constructive feedback
• Knowledge of participatory methods and techniques • Active listening skills
• Gender mainstreaming strategies • Ability to communicate clearly and to summarize the
• Facilitation skills – ability to conduct community information received
workshops and multi-stakeholder meetings in a • Ability to deliver a message to different audiences
context of diverse backgrounds, values, and interests • Advocacy skills
• Ability to manage expectations and foster trust • Networking/internal relationship building
• Ability to get along with others
Planning and Management Monitoring, Evaluation, and Learning
• Strategic planning (goal setting) and operational • Ability to design monitoring and evaluation
planning (turning goals into actions) skills processes appropriate to the program parameters
• Project management • Ability to set up and manage baseline and data
• Ability to anticipate issues and identify opportunities collection /reporting requirements
• Ability to develop alternative solutions • Ability to synthesize information
• Ability to manage and supervise others • Ability to document and report results to various
• Fundraising skills, including knowledge of potential audiences
sources of funds • Ability to reflect on results and incorporate learning
• Effective use of information and communication back into decision making
technologies • Knowledge of participatory methods and tools
Mediation and Consensus Building Personal Attributes
• Negotiation skills • Integrity and transparency
• Conflict resolution and consensus-building • Personal authority and charisma
• Ability to bring people together around shared • Awareness of biases
interests • Enthusiasm and energy
• Ability to break the impasse in discussions • Empathy (understanding others’ perspectives)
• Ability to help individuals understand the views of • Patience and perseverance
others • Flexibility
• Ability to identify an issue and look at options and • Creativity/“Outside the box” thinking
alternatives to resolve conflict • Sense of humor
• Team-building skills
Invest in Capacity Building 51
PERU LNG (Peru) – Promoting Municipal strengthening and social accountability
around revenues from extractive industries33
PERU LNG (Liquid Natural Gas Project) is the On the social accountability side, several respected
largest foreign direct investment in Peru’s history. local institutions, including the local chamber of
The shareholders include Hunt Oil, Repsol YPF, SK commerce, professional schools of economists and
Energy Co. Ltd, and Marubeni Corporation. The lawyers, the local university, and NGOs, participate
project’s pipeline passes through four regions—two in the MIM component of the program. Baseline
of which are among the poorest in Peru. In light of and follow-up surveys showed an increased level of
the significant anticipated royalty flows to the local understanding among the local population about
municipalities, PERU LNG recognized the business the royalties and their rights to receive information
imperative of ensuring that these royalties directly on how they are being spent.
benefit the local population.
Lessons Learned
In 2008, the company started working with IFC’s
revenue management advisory services program • Directly involve and build capacity of the key
in Peru to strengthen municipal investment municipal staff in charge of the investment
management in three provinces. This program was efforts. Consider both investment quantity
based on a two-pronged “push-pull” approach. and quality (linked to the development
On the “push” front, local governments receive priorities of the local population) while
capacity building to efficiently plan, manage, and supporting local governments in the
make sound investment decisions. On the “pull” improvement of their investment practices.
side, which is known as the social accountability • Promote a culture of social accountability by
component, or “Mejorando la Inversión Municipal” showing municipal authorities that a two-way
(MIM), civil society organizations receive support flow of information is in their interest. This
on how to monitor revenue inflows and municipal can be done by: i) helping civil society to make
investments in order to increase both transparency itself heard and gain the means to effectively
and accountability. They publicly disseminate the engage authorities, ii) engaging the media so
information and create channels for feedback to it plays a key role in disseminating information,
muncipalities about local demand and perceptions monitoring municipal affairs, and furthering an
of their performance. informed public discussion, and iii) providing
local authorities and municipal officers with
Results To Date incentives for sharing information with respect
to municipal activities.
After one year of implementation, results have been
• Provide action-oriented feedback to mayors to
encouraging. The participating municipalities have
help them understand local perceptions and to
received in-depth technical support and training that
act on key areas that need their attention. This
helped to resolve several bottlenecks in the investment in turn signals to the population that their voice
cycle. Investment committees have been established is being heard by government.
in each municipality to promote sound investment
practices. Work to develop multi-annual investment
plans is underway. A number of strategic projects have
been selected by municipalities for implementation,
including installation of a potable water and sanitation
system, building of a waste management system, and
a health project to reduce child malnutrition.
52 Invest in Capacity Building
BUILD THE RIGHT TYPES OF CAPACITIES
Another challenge for effective capacity building is getting clear on what sorts
of competencies, awareness, and skills need to be built. The United Nations
Development Program’s classification of two general types of capacities, “functional”
and “technical,” provides a useful framework for thinking about capacity building in
the CI context.34 A third category, “behavioral,” relates to awareness and attitudes.
FUNCTIONAL CAPACITIES are “crosscutting” capacities that are relevant across
various levels and are not associated with one particular sector or theme. They are
the management capacities needed to formulate, implement, and review strategies,
programs, and projects. Since they focus on “getting things done,” they are of key
importance for any successful capacity development. These capacities are the ones
that companies are most likely to target as part of CI.
TECHNICAL CAPACITIES are those associated with particular areas of expertise and
practice in specific thematic areas or sectors. For CI, the technical skills may closely
relate to a sector or program focus, such as microfinance, small business training,
education, health, or agriculture. Technical capacities tend to be acquired through
more formalized instruction, study, and practical training. Because this tends to be a
more specialized set of skills, the target audience is generally much narrower.
BEHAVIORAL CAPACITIES have to do with cultural shifts and changes in attitude. An
important component of capacity building, especially in a multi-stakeholder context, is
raising awareness in order to affect changes in the attitudes, practices, and behaviors
of individuals, groups, and organizations. These changes include partnering, building
alliances, and interacting in new or different ways. Behavioral capacity building can also
prompt changes in strategy direction, policies, and institutional culture.
UNDP’s Five Functional Capacities35
The United Nations Development Programme places emphasis on building the
following five functional capacities:
• Engage Communities
This involves building the capacity to facilitate participatory development
and multi-stakeholder processes by building trust, using participatory
methods, listening, helping to give voice to the silent majority, and
working toward putting the community members into the “driver’s seat.”
• Assess a Situation and Define a Vision and Mandate
Skills in analysis, systems view, visioning, imagination, assets and opportunity
assessment, goal setting, and project design, are a part of this capacity area.
• Formulate Policies and Strategies
Skills in this area include strategic thinking, strategy mapping and
development, social network mapping, prioritization, operational
planning, feasibility analysis, and risk analysis.
• Budget, Manage, and Implement
Skills in this area include forecasting, participating, budgeting, cost analysis,
funds allocation, reporting, financial oversight, and bookkeeping.
• Monitor and Evaluate
Skills in setting measurable goals and objectives, defining outcomes,
developing indicators, formulating and asking appropriate questions,
gathering and analyzing data, using tools for conducting participatory
evaluations, and creating a positive learning environment.
Invest in Capacity Building 53
Start by Assessing Existing Capacities
To build capacity effectively, one must first understand what capacity already exists.
A good place to start is to involve stakeholders in assessing their own capacities
and jointly defining a range of “competency areas” linked to the CI program.
Once key competencies have been identified, the desired level of capacity (target)
and the existing level of capacity (baseline) can be determined. This can be done
through a series of questions intended to investigate each skill area to find out
where the strengths and weaknesses of the group, organization, or individual
lie. The development of such a capacity-building questionnaire can be done in
a participatory setting and should include a discussion of what success might
look like. Capacity levels can be assessed using other qualitative and quantitative
techniques. For examples of existing tools and methods to assess organizational
capacity, please see Tools 6 and 7.
Community Capacity Assessment (Fiji)36
During a capacity assessment of three rural Fijian 8. Role of outside agents (links between the
communities for a health promotion program, nine community and external parties)
“capacity domains” were identified and assessed to 9. Program management (includes control
identify problem areas and define capacity-building by stakeholders over decisions on planning,
strategies to address them. These were: implementation, evaluation, finances,
administration, reporting, and conflict
1. Participation resolution)
2. Leadership
3. Organizational structure (committees, Each domain consisted of five elements that ranged
church, youth, and other community groups) from the least to the most empowering situation and
was presented as a short statement derived from
4. Problem assessment (identification of problems,
community discussions. Each statement was then
solutions, and actions to resolve problems)
discussed and the community made the selection
5. Resource mobilization (ability to mobilize of the one that most closely represented the current
resources from within and to negotiate situation. The following matrix is an example of
resources from beyond the community) how the community assessed the “participation”
6. Asking “why” (the ability of the community domain.
to critically assess causes of problems)
7. Links with others (links between the
community and other organizations,
partnerships, and coalitions)
Domain Assessment Reasons Why How to Improve Strategy Resources
Required
Participation Not all There is a lack Work through Develop a Human resources
community of knowledge, traditional directive with to develop a
groups (e.g., skills, focus, structures and a timeline, plan for better
women, youth) and interest in processes, chiefly activities, and targeting of
are participating the community; leadership, to responsibilities women and
in activities and personal address the though follow- youth
meetings differences are issues up meetings
also creating
divisions
54 Invest in Capacity Building
Consider a Range of Capacity-Building Investments
Local capacity development is increasingly viewed as a worthwhile investment in
and of itself, and not just as a means of facilitating projects in other areas. Once
capacity needs have been assessed and agreed upon, specific interventions can be
identified. Table 5.2 provides a menu of options that can be used to identify the
major components of a company’s capacity-building strategy.
The interventions listed below have different purposes. When choosing among
different types of capacity-building investments it is useful to think about what
objective a particular intervention would achieve, if it is demand-driven, and what
outcomes are expected.
Table 5.2: Investing in Local Capacity Building - A Menu of Options
Types of Interventions Potential Activities
Networking Connecting communities, organizations, and individuals
through formal and informal affiliations to expand service
delivery, improve information sharing, set performance
standards, or empower groups
New Entity Creation Creating new water user groups, co-ops, civil society
organizations, borrower groups, etc.
Training Designing and delivering curriculum to support transfer of
critical skills
Partnering Brokering new relationships and joint ventures between
key actors to meet ci objectives
Leadership Serving as a role model or counselor to emerging
Development community leaders
Organizational Providing support to local organizations to enhance
Development performance
Exchanges and Visits Sponsoring exchanges to promote learning and cross-
fertilization
Coaching and Staff share time and expertise
Mentoring
Social Marketing Applying principles of commercial marketing
to raise awareness and influence behavior changes
Development of Local Strengthening the quantity and quality of local service
Service Providers providers
Direct Management Company staff are either seconded or provide
Assistance direct technical assistance
General Operating Providing small grants to support core staff at key agencies
Grants
Invest in Capacity Building 55
EVALUATE CAPACITY-BUILDING RESULTS
Measuring the success of capacity-building efforts is perhaps the biggest challenge.
Assessing results is nevertheless worth trying given that levels of local capacity are
an important factor in determining whether or not CI will be sustainable. In most
cases, an outcomes-focused approach that utilizes both quantitative and qualitative
data can be useful in measuring the changes in behavior and perceptions among
individuals, organizations, groups, and communities.
Changes resulting from capacity building efforts may take many different forms,
such as those given in Figure 5.3. Once the expected changes have been defined,
these can be developed into specific indicators.
Some important considerations when building a results framework for capacity
building include:
• Objectives, targets, and baseline need to be clearly defined to allow
assessment of results
• Beneficiaries can have multiple perspectives on the nature of the conducted
capacity-building activities
• The capacity-building exercise should be as participatory as possible to ensure
that a range of opinions is captured relating to performance
• Changes in capacities may only be demonstrated over the long term
• Results can be greatly affected by the quality of the intervention
Figure 5.2: Areas in which Change May Occur due to Capacity-Building Measures37
Collaboration Culture Learning & Policy & Process & Strategy Structure Technology
& Alliances Innovation Standards Systems
A change in A change in The acquisition A change in A change in an A change in A change in A change in
the way attitudes, and the rules or organization’s the direction the way an the way
communities/ practices, development policies that methods of of the organization technology is
organizations and/or of new skills, guide an operation. This mission and or community used to
work with behavior knowledge, organization’s includes, but is vision in organizes support the
other and ideas operations not limited to, response to itself to achievement
organizations applied to changes in the external achieve an of CI
and overcoming CI governance, environment objective objectives
institutions development financial or some
challenges management, other
fundraising and long-term,
human strategic
resource consideration
allocation
56 Invest in Capacity Building
Capacity Building Practice Pointers
Make it Demand Driven • Has there been a request for capacity building?
Whenever possible, capacity building should be demand • Have we properly identified the community’s
driven, responding to the interests and needs expressed needs?
by NGOs, community members, local government, and • Is there a solid decision-making process in
others. place to prioritize critical needs?
Take a Systems View • Do we have a clear understanding of the
Consider the impact that an intervention might have on wider context?
the broader system. For example, capacity building for • Have we thought about potential
women may be looked at with suspicion by men, or an consequences related to our intervention?
organization’s capacity building around a particular CI
project may sidetrack it from its core mission.
Understand the History • Have we inquired about past capacity-
Ask about other capacity-building efforts in which building efforts and their impact?
stakeholders have participated. Find out what worked • Have we attempted to build on lessons from
well and what didn’t. past interventions?
Work Through Indigenous Entities • Have we identified local groups that could
Working with and through indigenous entities (e.g., facilitate our initiative?
local consulting firms, NGOs, private contractors) to do • Have criteria been chosen for partner
capacity building strengthens the host country’s service selection?
provider market and makes local experts more visible. • For which activities can we rely on local
organizations?
Integrate Gender • Have we identified and involved women’s
In most developing countries, gender inequality is still seen groups and networks?
as a major obstacle to development. Closing the capacities • Have we created an enabling environment
gap between women and men involves specific efforts to for the participation of women?
create an enabling environment for woman to participate • Have we taken into account the perspectives
in capacity building and to incorporate gender perspectives of both women and men as well as the gender
when planning these interventions. implications of our proposed interventions?
Promote Action Learning and Participation • How do we ensure that communities
Using participatory methods has been found to be the most participate?
effective way to build capacity. Participatory approaches • Are we planning to use participatory
help people actively contribute to teaching and learning, methods?
rather than passively receiving information from outside • Is there “real work” around which we can
experts. When capacity building is directly connected to a organize capacity-building activities to
“need to know,” people are more motivated to learn. promote action learning?
© R.Parker
Invest in Capacity Building 57
Chapter 6
Set the Parameters
• Screen All Activities (Against Established
Objectives, Principles, and Criteria)
• Select Investment Areas
• Build a CI Portfolio that Supports
Your Strategy
• Build Sustainability into Project Design
• Set a Preliminary Budget
• Re-engage with Stakeholders on
Proposed Parameters
Parameters
Setting
Parameters
Setting
Selectivity is essential for companies seeking to direct their
community investment programs strategically.
Chapter 6: Set the Parameters
Given the potential The engagement process with local stakeholders and the outcomes generated
through community planning will have provided the company with a good sense
reputational of priority areas for potential investment. By now, a company should be in a good
implications position to develop the basic parameters of its CI strategy, having acquired a sound
of community understanding of the following elements (covered in Chapters 1-5):
investment and the
• The business case for CI (business objectives and key drivers to be supported)
need to account
to shareholders, • Issues of highest concern to local stakeholders
companies have
• Local stakeholders’ perceptions of the company
both a right and
an obligation to set • Community priorities that can potentially be addressed through CI
specific parameters
• The level of risk and opportunity these issues pose for the company (relative to
on the use of their
business objectives)
resources.
• Availability and capacity of local institutions and potential partners to implement
• Current development initiatives or programs in the area (including government
development priorities at the local, regional, and national levels)
• A sense of what other actors (communities, government, donors, NGOs, and
other partners) can contribute to a multi-stakeholder development process
Given the potential reputational implications of community investment and the need
to account to shareholders, companies have both a right and an obligation to set
specific parameters on the use of their resources. Setting conditions (in consultation
with stakeholders) on the type of activities the company will support, and the way
projects are designed and implemented, will increase the likelihood of achieving desired
outcomes while avoiding undesirable ones. Good practice also encourages discussion
and validation of such parameters with local stakeholders before they are formalized.
© A.Bhalla
Set the Parameters 59
SCREEN ALL ACTIVITIES
(AGAINST ESTABLISHED OBJECTIVES, PRINCIPLES, AND CRITERIA)
Selectivity is essential for companies seeking to direct their community investment
programs strategically. Three screening elements—CI strategy objectives,
guiding principles, and eligibility criteria—come first.
Figure 6.1: Setting Parameters for the CI Strategy
CI Objectives Principles Investment Sustainability
Budget
and Criteria Areas and Exit
Set the Objectives for Your Strategy
In terms of the overall strategy, CI objectives should be fairly high level and linked
to the business case. These objectives will set the stage and provide the rationale
for the type of program areas and activities that the company will support.
Develop Guiding Principles and Criteria
Guiding principles are the fundamental “rules” that all CI proposals and projects
should adhere to in order to receive support from the company. Sometimes known
as “operating principles” or “selection criteria,” they reflect a company’s values and
approach for managing community investment. These might include an emphasis
on sustainability, partnerships, and participatory approaches; or prioritization of
certain elements such as skills training over infrastructure; or the need for matching
contributions to demonstrate shared ownership.
Early clarity on CI principles and selection criteria is the most effective way for a
company to manage stakeholder expectations and requests for support. Conflicts
tend to arise when the rationale for how CI projects or budgets are distributed is not
transparent or is perceived as unpredictable and subject to manipulation. Clear criteria
help communities understand the basis by which decisions are made regarding CI
resources, and why benefits might not always be shared evenly among stakeholders.
Good practice pointers on using guiding principles and criteria include the following:
• Put your principles and/or criteria in writing, consult on them, and
disseminate them widely in order to promote transparency
• Screen all community investment decisions against these principles and
criteria to ensure that the CI program remains consistent with the strategy
• Be consistent in the application of principles and criteria to ensure fairness
• Use your principles to say “no” to ad hoc requests for support or
financing that do not meet the established criteria or fit within the community
investment strategy
60 Set the Parameters
Define Eligibility Criteria
Eligibility criteria for CI should establish at the outset: (i) who is eligible to benefit
and who is not—and why; ii) how resources will be allocated among the various
eligible communities; and iii) where allocations are not equal, the rationale for some
communities receiving more than others.
Criteria that are Defining who is eligible to participate in CI programs can be a delicate issue.
Criteria that are perceived as “unfair” by local stakeholders can increase social
perceived as risks and potential for conflict. Similarly, tensions and resentments may arise in
“unfair” by local communities who feel arbitrarily “left out.”
stakeholders can
Good practice pointers on developing eligibility criteria include the following:
increase social risks
and potential for 99 Consider the Project Footprint and Impacts
conflict.
Eligibility criteria for CI are most commonly determined by looking at the project’s
influence area (in terms of both direct and indirect impacts) and determining which
communities fall within these boundaries. This information is typically contained
in environmental and social impact assessments or project risk assessments, and
is part of the basic stakeholder identification and analysis that most companies
undertake. In some cases, however, limiting eligibility to impacted communities
might be too narrow.
MONTANA EXPLORADORA (GUATEMALA) - GEOGRAPHICALLY-BASED
ELIGIBILITY FOR CI FUNDING38
Montana Exploradora devised a geography-based system for allocating
company funds for community development projects. Based on annual
funding, monies were allocated among four zones depending on the intensity
and types of potential project impacts:
• The Blue Zone is the area of direct influence, which includes six
communities that are located adjacent to the Marlin mine and
its activities. These communities receive 40 percent of the annual
community development budget.
• The Green Zone includes a second ring of communities located
around the Marlin mine that are indirectly affected by the mine and its
activities. These communities receive 30 percent of the budget.
• The Yellow Zone includes communities located along the transportation
route between the Marlin mine and the Pan American Highway. These
communities receive 20 percent of the annual budget.
• The Brown Zone includes the remaining communities in the municipalities
that may or may not be affected by the Marlin mine and its activities.
Development needs in these communities are identified in coordination
with the municipal governments. These communities receive 10 percent of
the annual budget.
Set the Parameters 61
99 Consider Social Risks and Related Issues
While physical proximity to the site and degree of project impact are reasonable
determinants, the question of “who benefits” can be sensitive—and at times
become politicized. In understanding social risks, it is important for companies,
particularly those with larger operations, to also consider the cultural, economic,
and/or administrative links that local stakeholders might have with other groups.
Conflicts arising from “perimeter” communities who feel excluded from
development have, on some occasions, led companies to expand eligibility criteria
to include surrounding areas and communities outside their immediate footprint.
The area of eligibility may be expanded to include:
• Political boundaries of a community, municipality, district, or state
• Environmental boundaries of an ecosystem or river basin
• Economic regions or corridors
• Cultural boundaries of a particular ethnic group or tribe
99 Validate Criteria with Stakeholders
While it is important for a company to define eligibility criteria before it begins
engaging communities on CI, it is equally important to consult with local stakeholders
to validate these criteria and ensure that they are perceived as fair and acceptable.
Consultation is also critical for reaching local consensus on how CI resources are to
be divided among the various eligible communities. Where resource allocation is not
equal, funding formulas involving criteria such as “population size” or “degree of
impact” or “proximity to the project site,” for example, can be agreed to in advance
by companies, communities, and local government.
© World Bank staff
62 Set the Parameters
CHEVRON (NIGERIA) - GUIDING PRINCIPLES AND SELECTION CRITERIA FOR SCREENING
COMMUNITY INVESTMENT PROJECTS39
Principles • Strengthens peaceful and orderly society
• Addresses youth unemployment/
• When possible, rehabilitate or complete underemployment
existing infrastructure before investing in new
construction. • Improves opportunities for women
• Engage government agencies, where
appropriate, to provide their legally mandated Sustainability
services, including education, health care, and
infrastructure. • Encourages self-reliance and avoids
dependency
• Involve community members as active
participants in project planning and execution. • Responds to existing or potential market (for
economic projects)
• Use every project as a capacity-building
opportunity (skills acquisition through • Strengthens capacity of individuals,
encouraging and assisting local youth to community-based organizations, NGOs, and/
become contractors hired to build community or local government
projects, formation of community-based • Opens partnership opportunities with CBOs,
organizations, etc.) NGOs, other donors, and/or government
• Reinforce community pride in ownership of • Creates opportunity for government
development project outcomes. engagement and support
Selection Criteria Project Management
Each proposed project is scored “low, medium, • High likelihood of success (from feasibility
or high” on each of the following criteria, and studies)
proposed projects are then ranked based on these
scores. • Designed to build out from success
• Optimizes and/or complements existing
Impact resources and capabilities
• Beneficiaries are involved in program design
• High “value-added”: broad social and/or and execution
economic benefit (e.g., significant increase
in household income, creates jobs, enhances • Project planning and execution is transparent
peace and stability) • Strengthens long-term positive relations
• Spreads benefits equitably among among stakeholders
beneficiaries
Set the Parameters 63
SELECT INVESTMENT AREAS
Target Investment Areas that Create Shared Value
Selectivity is fundamental to a strategic approach. While the focus of CI should be
to catalyze, support, and enable local communities to identify and address their own
development priorities and aspirations, this does not mean that a company can or
should try to respond to everything. Rather, the goal is to create “shared value” by
investing in those areas that are high priority for communities and government and
that also make business sense (in terms of what unique value a company can offer
over other actors, and alignment with business objectives).
Practically speaking, aligning interests may not always be achievable right away
or be possible for every investment. There may be pressing issues, for example,
that don’t fit neatly within the triangulation of interests but need to be addressed
nevertheless; or interim steps, such as capacity building, that are needed to enable
all parties to move toward areas of common interest.
Figure 6.2: Selective Investing to Create Shared Value
Community
High priority for
local communities
Target
areas
Government for CI
Consistent with Company
development priorities Supports business
of local government objectives and
drivers
Arrived at through
participatory processes
64 Set the Parameters
COCA-COLA (KENYA) - SHARED INTERESTS AROUND WATER ISSUES40
An important component of Coca-Cola’s business Some of the activities to date include:
and sustainability strategy is water stewardship.
Water is a key ingredient in the majority of Coca- • Teacher training and health promotion
Cola beverages and, at the same time, water quality programs established to teach students
and availability are common priority issues for local appropriate hygiene techniques and reinforce
communities and governments in countries where behavioral changes. Students and teachers
the company operates. also practice point-of-use water treatment in
these schools.
Coca Cola’s water stewardship commitment • A local partner of the program, SANA, has
therefore focuses on three main areas: (i) reduction completed or begun construction of latrines in
of the company’s water use; (ii) preservation of more than 60 schools, also with support from
local water resources through recycling; and, (iii) the communities.
support of healthy watersheds and community
water programs that help the company promote • Communities have applied for loans for a
sustainable water management. One such example communal water system that could be used
in addition to the school. It is predicted that
is the five-year “Sustaining and Scaling School
community and school access to water will both
Water, Sanitation, and Hygiene Plus Community
increase participation in the schools and transfer
Impact (SWASH+)” program in Nyanza Province,
healthy hygiene practices to the entire family.
Kenya. The program was launched in 2006 to
develop and test innovative approaches to school- • In terms of sustainability and exit, engagement
based water, sanitation, and hygiene interventions with the local and national governments
that maximize impact, equity, sustainability, and has been a vital component of the program.
cost-effectiveness. The program is implemented Partners plan to support the Government of
in phases to ensure that best practices are used to Kenya in bringing best practices to scale in
establish a framework for government-led scale up Nyanza Province, covering a total of 1520
of the most effective interventions. schools. Project staff has already had many
successful, high level engagements with the
government, setting the stage for successful
scale up of the program.
Use “Screens” to Select Among Local Development Priorities
Community planning and engagement processes will typically generate a set
of development priorities ranked according to their level of importance to local
stakeholders. Using this as a starting point, companies may find it helpful to employ
screens or filters as a decision-making tool to further refine the investment options
and prioritize shared areas of interest. Some companies choose to first undertake
this screening process internally—based on the input received from communities
and local government—to build internal alignment and management buy-in before
soliciting feedback from stakeholders. Other companies opt to undertake the
screening and prioritizing process jointly with stakeholders.
Set the Parameters 65
Examples of some common screens include:
• Level of stakeholder priority (high, medium, low)
• Level of risk or opportunity presented (high, medium, low)
• Fit with CI strategy objectives and guiding principles
• Fit with government development priorities and plans
• Local capacity and availability of implementing partners
• Ability of company to add value/comparative advantage
• Fit with Millennium Development Goals (or corporate priorities)
• Cost-benefit (number of people benefiting versus cost)
99 Screen Community Priorities Against Level of Risk and Opportunity
Companies may find it useful to review community development needs and
issues in light of project level risks and opportunities to see where CI might readily
contribute:
• What is the level of risk to the company (of not addressing this need)?
• What is the level of opportunity presented (i.e., achievability in terms of ease
of execution and likelihood of success)?
For further guidance on assessing risks and opportunities, see Tool 5.
Figure 6.3: Risks and Opportunities Posed by Community Needs and Issues
Community Issues
• Community center • Support for • Jobs After mapping
livelihoods
• Scholarships • HIV/AIDS potential risks and
High • Enterprise opportunities, the
• Training for women development • Low skilled youth company chose to
• Access to water invest in the areas
Level of Opportunity
circled
• Ecotourism • Upgrading of temples • Protection of fishing and
farming livelihoods
• Preservation of • Primary education High Priority
Med. heritage sites • Capacity building of
• Malaria traditional authorities Medium Priority
Low Priority
• Cultural activities • Electrification • Crime and security
• Transportation • Support to dairy • Corruption
Low producers
Low Med. High
Level of Risk
66 Set the Parameters
Screening against 99 Screen for Fit with Objectives and Guiding Principles
pre-established
Some issues or program areas may be a high priority for stakeholders but not
objectives and
a good fit with what the company hopes to achieve in terms of its CI strategy.
guiding principles Screening against pre-established objectives (linked to the business case) and
helps to ensure guiding principles (linked to the overall approach and values) helps to ensure that
that the potential potential investment areas most aligned with the strategy receive priority.
investment areas 99 Screen for Fit with Government Development Priorities and Plans
most aligned with
the strategy receive The local context assessment (Chapter 3) will have informed the company about
government development plans and priorities at the local, regional, and national
priority. levels. Aligning community investment areas with existing government plans for
local development can help leverage resources, enhance impact, and promote
sustainability of activities.
99 Screen for Availability of Local Capacity and Partners
The mapping of local institutions and potential partners (Chapter 3) will have provided
a good sense of what current programs exist and what potential partners and
institutions are active in various technical sectors (e.g., health, education, capacity
building, water, agriculture, microfinance) that may have been identified as priorities
by local communities. Where development needs are outside the realm of company
competencies, the availability of local partners with sufficient delivery capacity (including
local government) becomes an important factor. There may be contexts, however, where
there is little or no capacity to deliver on high-risk or priority areas. In these cases, a
company may decide to proceed regardless of the existence of partners and try to build
local capacity along the way.
99 Screen for Opportunities for Company Value-Add
As discussed in Chapter 2, the alignment of business competencies with
stakeholder needs is a key feature of a strategic approach to CI because it
encourages a company to prioritize those areas where they have the most to offer
and can make a unique contribution. This also has the advantage of increasing
internal efficiencies by leveraging functional resources across the business in
support of CI, and reinforcing the links between the business and community
investment.
99 Screen for Fit with Millennium Development Goals or Corporate Priorities
Some companies may have corporate-level commitments that will influence
(or even predetermine) the type of activities or thematic areas they will support
through their CI programs. A common example is company support for projects
contributing toward the Millennium Development Goals.
99 Rank Remaining Options based on Cost-Benefit
This final screen is about assessing your “bang for the buck.” It requires making
some rough initial estimates of the actual investment costs to the company for
each of the remaining options and evaluating these against potential benefits (i.e.,
overall impact, number of people benefiting, community satisfaction, support to
business objectives, and so forth). Priority should be given to options that combine
higher impact (or reach) with lower costs.
Set the Parameters 67
99 Select the Best Options as your Core Investment Areas for CI
Selecting the best options based on the screening process is the last step. At this
stage, investment areas to be supported through CI should be reasonably specific—
but with the recognition that the actual projects to be implemented are still to be
defined by local stakeholders in accordance with guiding principles and criteria.
Figure 6.4: Sample Screening Process for CI Options
The following diagrams illustrate how the screening process might unfold.
1. Prioritize options that fit with 2. Prioritize options that fit with government
CI strategy objectives and guiding principles. development priorities and plans.
High
High
Option
Option
Option Option
Importance to Stakeholders
Importance to Stakeholders
Option Option Option Option
Option
Option Option Option Option
Option
Option
Option
Option
Option
Option
Option
Option Option
Low
Low
Low High Low High
Fit with CI Objectives Fit with Government Plans
3. Prioritize options where the company has comparative 4. Rank highest scoring options according to cost-benefit.
advantage/value-add over other actors. Priority is for higher impact, lower cost initiatives.
High
High
Option
Option
Option
Importance to Stakeholders
Option Option
Option
Number of People Benefiting
Option Option
Option Option
Option Option Option
Option Option
Option
Option Option Option
Option
Option
Low
Low
Option
Low High Low High
Ability of the Company to Add Value Cost of Intervention
BUILD A CI PORTFOLIO THAT SUPPORTS YOUR STRATEGY
Putting together a successful portfolio of community investments is similar in many
ways to building a financial portfolio. This means that it is important to consider
such factors as allocation, diversification, risk, time horizon, and short-term and
long-term objectives, as well as the investment mix that can help a company
achieve its overall goal. The goal, for many companies, is to maximize value derived
for the business and its stakeholders from the envelope of CI resources.
68 Set the Parameters
Decide on Investment Categories
Creating a typology of investments and allocating budget to selected categories
enables a company to exercise greater control over how its CI resources are spent.
This also promotes stronger links between decision making and business drivers, and
enables mid-course “rebalancing” among investment categories where necessary.
The BG Group, for example, differentiates between philanthropic donations,
investments at the community level, and regional development initiatives.
Figure 6.5: BG Group’s Typology for Social Investment Spending41
Local Community Investment Regional Development Philanthropy/Charitable
Targeted at communities Most relevant for large Donations
within the project’s area of projects with significant Projects involving charitable
influence. Considered to be revenue flows. Generally giving. Typically has little
“strategic” as it contributes involves large-scale projects relation to business
to local sustainable with significant costs, objectives, even though it
development priorities and multiple sources of may be addressing a
is undertaken in support of funding, and is carried out community or societal need.
the company’s business with multiple stakeholders
objectives. Can be divided (including regional
into subcategories (e.g., government).
“short-term” versus
“long-term/productive”
investments).
Go for Quality, Not Quantity
A study of 60 international companies operating on five continents concluded that
there is no correlation (and sometimes even an inverse correlation) between the
amount of money a company spends on community projects and the quality of its
relationship with the community.42 Experience also suggests that companies that
focus on high-quality initiatives in a few, well-defined areas tend to achieve greater
impact and recognition than companies with CI programs that spread resources
across many different types of activities.
Figure 6.6: Focus on a Few Key Areas for Greater Impact
CI Portfolio - Scenario A CI Portfolio - Scenario B
Set the Parameters 69
Think Short Term and Long Term (but Emphasize Long Term)
Any good strategy will have both short-term and long-term objectives. Different
types of investments can be used to respond to business needs at various stages of
the project. Each has its advantages and disadvantages. For example, the benefits
of “quick impact” projects and donations need to be weighed carefully against the
risks of creating dependency.
While it is not realistic to expect every activity a company supports to have
sustainable, long-term impacts, past experience has shown that lasting
development impacts and goodwill are not usually achievable through short-term
projects. For this reason, productive investments that build social and human
capital (such as skills training, enterprise development, institutional strengthening,
knowledge transfer, and economic empowerment) should ideally make up the bulk
of the CI portfolio. Because these types of initiatives take time to show results,
companies often complement their long-term strategy with a small number of
high profile, strategic, short-term projects (often infrastructure) that facilitate an
immediate business need.
Figure 6.7: Different Types of Investments for Different Business Phases and Objectives
Quick Impact Projects Discretionary Funds Long-Term Investments
High visibility projects Donations fully driven by Productive investments
(sometimes referred to as requests from the that build local capacity
“ribbon cutting”). These community. While often over time. These support
can be done quickly in short-term and ad hoc, longer-term business
the early stages to create these allow the company objectives such as risk
goodwill, demonstrate to be seen as responsive to management, reputation,
tangible benefit, and gain local needs. Example: productivity, and
social license. Example: Support for local festivals sustainability. Example:
Infrastructure projects and sports, or donation of Skills building and
supplies livelihoods support
“If you go back Emphasize Capacity-Building Investments
15 years it was a Traditionally, capacity building has been viewed as a means to an end—something
contest of who was that needs to be done to enable implementation of a specific project or activity.
giving the most. Current good practice encourages capacity building as an investment in its own
Now it’s about the right, and one that encompasses a much broader spectrum of interventions than
just training. (See Chapter 5 for a menu of capacity-building options). There is
effectiveness of growing consensus that the achievement of long-term development impact and
what you do.” a company’s ability to exit on positive terms are directly tied to the existence of
strong, capable local institutions and a self-reliant population. For this reason,
capacity-building investments which directly contribute to these goals are
—IBM Corporate strategically important and should ideally comprise a significant, if not dominant,
Citizenship portion of a company’s CI portfolio.
Executive43
70 Set the Parameters
Be Selective with Infrastructure Investments
“Bricks and mortar” projects are often criticized for not contributing to
sustainability, local capacity, or long-term goodwill. The reality, however, is that
infrastructure is usually the second highest priority—after jobs—for communities
and local government. Companies can face intense pressure to deliver basic
services and infrastructure where local government is absent or weak, or where
it is a requirement of the operating agreement. The solution to such a dilemma
may be found in employing some of the strategies contained in this handbook.
These include not allowing infrastructure investments to dominate the CI portfolio;
complementing such investments with others that build capacity and productive
skills; not providing free services; choosing options for construction that build
community involvement and ownership; and joint planning with stakeholders for
ongoing maintenance, operations, handover, and exit.
Figure 6.8: From Dependency to Development44
Company Company leaves Company highlights Company builds Company acts as a
implements project in hands of its role in project with infrastructure (schools, replacement for
projects itself government to fund large signs, company clinics, roads) projects government in the
and run when it logos, etc. for community provision of services
leaves footprint area to the community
Company partners Company develops an Company highlights Company provides Company builds
with communities, exit strategy for the the roles and skills training and capacity of local
NGOs, and project and works responsibilities of the capacity building authorities to provide
government to toward the eventual community and the projects to the services or acts as an
determine community exit of the company government in community advocate for the
needs designing and community to the
implementing the government
project (tripartite
partnership)
BUILD SUSTAINABILITY INTO PROJECT DESIGN
Companies have a clear business interest in avoiding the creation of dependencies
and ensuring that the project benefits they support through CI can become
self-sustaining over time. While a company’s guiding principles (discussed
earlier in this chapter) often include sustainability elements or criteria, the issue
of sustainability is so critical to the effectiveness of CI that it deserves special
emphasis. Asking a few key questions at the project design stage can be a simple
but effective means to avoid supporting community investment activities that are
unsustainable in the long run.
Set the Parameters 71
Ask the Tough Questions Up Front
• Will the project or activity be able to continue in the absence of company
support? How?
• What measures will be taken to ensure that the company does not support
unsustainable activities?
• How will the company restructure any existing CI activities that are not
sustainable?
• What steps will be taken to raise awareness of the importance of sustainability
among local stakeholders who might not otherwise see this as a priority?
• How will the company transfer knowledge, capacity, and skills to local groups
and individuals?
• Does the company have guiding principles and project selection criteria that
promote sustainability?
Companies have Don’t Start Without a Handover or Exit Strategy
a clear business
Abrupt or poorly managed exits can do serious damage to a company’s reputation
interest in avoiding and its relationships with local stakeholders—compromising the very goals of CI.
the creation of Handover or exit planning is a means to ensure that CI programs can become self-
dependencies and sustaining over time, thereby enabling a company to reduce or withdraw its support
without negative consequences. In many cases, the assumption that a company can
ensuring that the “hand over” to government, NGOs, or communities is not realistic without significant
project benefits preparation and capacity building.
they support
By helping stakeholders to “see the end at the beginning” and plan for it, handover
through CI can and exit strategies enable a shared understanding of how roles and responsibilities
become self- will evolve—and better prepare people to embrace change. In concrete terms,
sustaining over such a strategy means ensuring that the project will ultimately be run by capable
time. partners (e.g., local government, NGOs, or community groups) and will continue to
generate benefits (without reliance on the company either financially or in terms of
its ownership and management structures).
For a template to assist with exit planning, see Tool 8.
Develop a “Turnaround” Strategy for Unsustainable Projects
Companies wishing to reorient an existing CI program to make it more strategic or
sustainable may benefit from developing a “turnaround” strategy.45 Key steps include:
• Analyze why a CI program needs to change in order to understand what
kinds of changes are required
• Set the strategic objectives for the new program
• Review and categorize existing activities (i.e., which activities can
continue unchanged, which require changes in order to continue, and which
need to be stopped)
• Replace unsustainable or non-strategic activities with alternatives that
respond to local priorities
72 Set the Parameters
• Plan for the turnaround, including how to gain internal and external
buy-in to the process; how to build the capacity of partners to develop and
maintain a more sustainable program going forward; and how to manage and
communicate the process in order to minimize social risks
While planning and implementing a mid-course correction via a turnaround
strategy may seem fairly straightforward, many companies have found it to be quite
challenging. Lessons from past experience suggest the following:
99 Turnaround Takes Time
Turning around an existing CI program takes time and can be a difficult process. Where
communities and governments have come to rely on company support, free services
and infrastructure, or donations and grants, a sudden withdrawal or change of terms
can be perceived negatively as a company “reneging on its commitments or promises”
to local communities. A turnaround strategy requires careful, sensitive planning and
could take several years of transition. In some cases, it may be useful to contract with a
third party (such as an NGO or a consultant) to help with the redesign of a new, more
sustainable program and to support the transition process.
Tips for Developing Handover and Exit Strategies
Design a handover or exit strategy for all materials) for any service provided in order to maintain
projects. Think, from the start, about who/what it; and that the partners can take credit for the project
type of organization(s) will take over funding and so that the company is seen as supporting develop-
management of the project, at what stage this ment rather than delivering it.
should happen, and what will be needed in order
to sustain the activity without company support. Identify local partners and build their capacity.
For projects involving infrastructure or service For company handover to be viable, local partners
provision, what mechanisms are needed to foster might need short-term financial support, help
local ownership, cost sharing, responsibility for with planning and fundraising, and training in
maintenance, and capacity for handover? management skills.
Build the exit mechanism and timeframe into Work through existing local institutions where
the project design. Consider whether the long- possible. Despite the challenges, strengthening
term partner(s) will run the project from the start, existing local-level or community institutions is
or whether they will be phased in over time. What usually more straightforward than trying to create
mechanisms are required to make that happen, and and sustain new ones.
what types of training and short- or medium-term
financial support are needed? The phasing out of Engage local government and invest in their
company support may have to be staggered over capacity building. The local government is often
time to allow stakeholders to adapt. responsible for providing many of the key inputs (for
example, teachers for schools or medical supplies for
Facilitate community participation and owner- clinics). Involving local government in planning projects
ship from the start to ensure that all groups in the with communities and investing in their capacity
community are engaged in the selection, planning, development can help to create a viable counterpart
and implementation of community projects; that all for project handover. At the same time, strengthening
stakeholders know about and agree to the company’s the ability of communities to lobby local government
exit strategy and what it will mean for the project; that can help to get village priorities incorporated into the
every project requires both community and local gov- government’s development plans.
ernment contributions (cash, labor, land, fees, and/or
Set the Parameters 73
99 Communication and Buy-In Are Key
Good communication and getting buy-in for the new strategy are very important
as many individuals—both within and outside the company—are likely to have
invested themselves heavily in the success of the existing CI programs. This needs to
be recognized and openly addressed. Many groups or individuals may be resistant
to change. Getting them to see the benefits of and to take ownership of the new
approach is essential.
99 Capacity Building is Needed for Turnaround to Succeed
The importance of capacity building of partner organizations—existing, new, or
potential—cannot be overemphasized. In a turnaround situation, there will often be
a direct correlation between increasing the capacity of local partners and decreasing
funding and involvement by the company. Such processes require time, patience,
and resources.
For a template to assist with turnaround planning, see Tool 9.
Himal Power Limited (Nepal) - Designing for Sustainability: An Exit Strategy
Involving Local Capacity46
Himal Power Limited (HPL) launched Khimti related to mini-hydropower plant functioning and
Neighborhood Development Project to supply maintenance. In addition, KREC’s executive committee
electricity to about 3,100 marginalized households is engaged in “learning by doing”— implementing
by constructing a 400 kilowatt mini-hydropower the neighborhood development project, developing a
plant and establishing rural electrification and long-term implementation plan, and creating an exit
distribution grids. In addition, the company strategy for HPL.
supported various initiatives to build essential
infrastructure, promote local entrepreneurship, and Other successful aspects of KiND include social
foster community development. mobilization and identifying the needs of the
community, transparency (by involving local people
As part of its exit strategy and to ensure long-term and employees in decision making), external and
sustainability of its rural electrification project, HPL internal communication, and bringing on board
supported the establishment of the Khimti Rural experienced partners. With respect to the latter, the
Electric Cooperative (KREC). A community-run project leveraged skills and resources contributed by
institution owned by households served by the rural UNDP and the Government of Norway.
electrification system, KREC was designed from
the outset to eventually take over management Considering the challenging business environment
responsibility for the plants and the electrification in Nepal, the project has contributed to the
system. development priorities of the local communities and
in doing so improved the company’s relationship with
As a result, the Khimti Neighborhood Development local people. Building on the project’s initial success,
Project (KiND) was designed to build the cooperative’s a similar project to electrify rural areas and foster
capacity to run the system. It includes an institutional community development is under consideration in the
strengthening component as well as skills training larger Tamakoshi Basin in Nepal.
74 Set the Parameters
Lihir Gold (Papua New Guinea) – Promoting Sustainable Development Planning for
Lihir Island47
Lihir Gold Limited (LGL), a global gold company, has for communities from these programs the key change
operations on Lihir Island in Papua New Guinea. The has been to shift ownership of the programs, from the
company is committed to supporting the Lihirian company to a multi-stakeholder planning, monitoring,
community’s vision of achieving self reliance and and management committee. The implementation of
financial independence. These two aspirations the plan relies on a wide range of funding sources,
underpin the Lihir Sustainable Development Plan including the company, the government, and
(2007), which is a forward-looking, “revision” contributions from the Lihirian community. The latter
statement on sustainability. involves community equity in Lihir Gold—company
shares that were purchased by the community (with
The Lihir Sustainable Development Plan resulted from support from the government) at the time that the
a review of the original Integrated Benefits Package company began operations in the region. The company
that involved national and provincial governments, the plans to work with the community to help establish
people of Lihir (represented by the Joint Negotiating the necessary governance structures to manage these
Committee) and Lihir Gold. The key outcome of the funds, which are at the heart of the sustainability plan
review was a shift away from the traditional “handout” to create financial independence.
approach to a development model which is more
attuned to the longer term aspirations of the Lihirian To ensure sustainability, a significant component
community, so that, when the mining operation of the Lihir Sustainable Development Plan involves
ultimately winds down in 30 years, the legacy will be capacity building. The company supports mentoring
a vibrant, independent economy that can survive and and capacity-building activities to help the Lihirian
prosper. community implement the Sustainable Development
Plan. In 2008, the Plan funded USD $6 million worth
The plan includes agreements in the areas of capacity of capacity building and other projects that focused
building, trust fund payments, compensation, training, on the development of the Community Health
localization, infrastructure and utility development, and Lihir Education Plans, continued infrastructure
town and village planning, commercial and maintenance, establishment of the Nationwide
contractual management opportunities, and social Micro Bank, and an Integrated Livestock Project.
wellbeing. In order to create more sustainable value
SET A PRELIMINARY BUDGET
There is no set rule for how much to spend on community investment, and
evidence suggests that there is no direct correlation between the amount of money
spent and the quality of the relationship with local communities.48 Companies
spend anywhere from USD $50,000 to upwards of USD $10 million per year on
site-level CI programs. Ideally, a CI budget should be needs-driven (i.e., determined
by a socioeconomic assessment and business needs related to achieving social
objectives). In reality, however, many CI programs are budget-driven, based on
predetermined formulas or a discretionary allocation by management.
Set the Parameters 75
It is important While predetermined formulas have proven a useful starting point to establish
for CI budgets numbers within the business process, revisions may be necessary as community
engagement processes further clarify what local priorities and expectations are, and
to provide
business needs arise for social license, access to land, or “quick wins.” In thinking
steady, multi- about budget, also consider which needs might be readily addressed through core
year funding and business, and what contributions might come from other partners.
enable flexibility
For starters, come up with a general budget figure for CI, grounded in some
to respond analysis, before engaging external stakeholders. While it may be too early to know
to changing or share precise budget numbers with communities, company staff will be more
circumstances. effective in their scoping and managing of expectations if they have some basic
budget parameters to work with. This also helps local stakeholders to gauge the
level of company support they should anticipate.
When trying to estimate budget numbers, it may be useful to consider a number of
factors:
• The company’s CI budget from previous years (for existing programs)
• The objectives of its community investment strategy
• The social context in which the company is operating
• The type of business and the nature/scale of impacts
• The stage of the business or project cycle
• Potential benchmarks (i.e., CI budgets of other companies in the
same region or sector)
Whatever the amount, it is important for CI budgets to provide steady, multi-year
funding and enable flexibility to respond to changing circumstances at each stage
of the project cycle.
Consider the Social Context
The local socioeconomic context often drives budget considerations. Aspects to
consider include:
• Is the project in an area with a high level of poverty?
• What is the capacity of government to meet the basic needs of the population
for service delivery and infrastructure?
• Are there specific risks, such as conflict or civil unrest?
• Are there high social expectations within the population (and government) that
the company “gives back” through community development? Are there other
companies giving high levels of support?
• Is the wealth generated by the company flowing to another region
(e.g., the capital city)?
• Are local benefits visible?
76 Set the Parameters
Consider the Type of Business and Nature of Impacts
Different types of industry impact local communities in different ways which can
also have implications for CI budgets. Here, aspects to consider include:
• To what degree does the company compete with the community for land and
access to other natural resources?
• Does the company build its business on resources that the community
considers its own (e.g., tourism, forestry)?
• Does the company represent a major percentage of the local economy?
• Does the company originate from outside the region or outside the country?
• Is the company starting with a local population that has major concerns about
the company or has negative perceptions about the impacts of the business?
• Will the project generate significant environmental and social impacts on the
local population?
Consider the Stage of the Project Cycle
Changing business needs and drivers for CI at various stages of the business or
project cycle can have an effect on budget requirements. Aspects to consider include:
• Planning - where a company is establishing relationships and trust; needs
to gain permits, access to land, or social license to operate; and may face
opposition or expectations from stakeholders—requiring quick, upfront
investments to demonstrate tangible benefits
• Construction or Development - where the company is generating greater
attention and higher expectations for benefits, or where disturbances or
grievances exist due to project-induced impacts
• Operation - where the stakeholders already understand company activities,
know that the company has started to generate revenue, and may have
ongoing concerns or unmet expectations that could generate social risk
• Expansion - where the company may need renewed support from
stakeholders who will already be aware of the actual benefits or impacts the
company has generated
• Project End, Downsizing, or Closure - where legacy and reputation is
important and the company may have strained relations with communities
or government who still have influence over its future and can affect the
“license to exit”
Consider Potential Benchmarks
In setting their budgets, some companies find it useful to look at the budgets of
other companies operating in similar contexts as well as global benchmarks for
their industry. Some examples are given in Table 6.1.
Set the Parameters 77
Table 6.1: Examples of Company Funding Formulas for Community
Investment Activities
Sector Region Funding for Community Investment
Mining Company Latin America 1% of pre-tax annual profits allocated to CI
based on 3-year rolling average
Sugar Company Latin America USD $2.20 for each quintal of sugar
produced annually
Tree Plantation East Asia USD $50 per hectare of plantation land
Company contributed to a community development
fund
Oil Palm Company Sub-Saharan 1% of annual turnover
Africa
Mining Company Sub-Saharan 1% of operational profits plus USD $1 for
Africa each ounce of gold produced by its mines
Oil & Gas Company Global 1-3% of expected operating costs
Mining Company Global 2% of expected capital expenditures
Energy Company East Asia 0.01 Philippine pesos per kilowatt-hour of
the total electricity sales
Budgeting tips for Community Investment
• Engage with Senior Management. Agree on a budget range and
identify the conditions under which budget parameters could change.
• Think in Multi-Year Timeframes. Allocating budgets in three-year
or five-year timeframes is important to enable the company to meet
planning and funding commitments to communities for ongoing
projects.
• Share Final Budgets with the Population. If a community does
not know the limits of the company’s budget, it can lead to unrealistic
expectations. Clear budget parameters help the community evaluate
between alternatives, make choices, and prioritize requests.
• Require Matching Funds. Companies tend to get better results when
they use part of their funds to leverage and catalyze “co-investments.”
By requiring matching funds (in cash or in-kind), companies can shift
requests for budget increases back to the communities by indicating
that company budgets will increase if and when local support increases.
This helps to redirect the community’s focus toward identifying other
sources of funding through which it can leverage company funds.
• Maintain Budget Commitments. Community investments are external
commitments. Companies need to be clear at the beginning of a CI
program if there are any business circumstances, such as an economic
downturn, that would cause budgets to be cut prematurely. Commitments
should otherwise be adhered to.
• Don’t Underestimate Staffing Costs. Companies, especially large
ones, underestimate the staffing requirements to manage or oversee
CI budgets. Community investments are effectively joint ventures with
partners who often lack experience and capacity. Sufficient in-house
capacity is required to ensure quality and provide program oversight.
78 Set the Parameters
In the spirit of RE-ENGAGE WITH STAKEHOLDERS ON PROPOSED PARAMETERS
meaningful
Ultimately, the business decisions about how much to invest, where to invest, and
engagement, a
under what conditions, lie with the company. That said, a successful CI strategy
company must be requires buy-in and ownership from local stakeholders. Therefore, the parameters
prepared to listen, established by the company should ideally be brought back to the community and
discuss, and make local government for further vetting and validation.
modifications to its In the spirit of meaningful engagement, a company must be prepared to listen,
strategy. discuss, and make modifications to its strategy and program areas in order to
reach general agreement with stakeholders on the approach. This means being
prepared to explain the internal process and rationale used for developing program
parameters (including how local input influenced these decisions). For example,
communities will require a clear understanding of why the company has chosen to
support certain areas or activities over others. Discussion of objectives, criteria, and
principles is also very important to determine whether people perceive these as fair
and acceptable.
The key areas for engagement around the parameters for CI strategy include:
• Presenting the company’s CI strategy objectives to test the response
(recognizing that the objectives are often of a high level while communities are
more interested in specific projects)
• Validating eligibility criteria
• Discussing the guiding principles to aid in local understanding of how the
projects will be considered (e.g., “sustainability” might be perceived as an
external value that needs to be further discussed)
• Reframing principles to achieve greater clarity
• Agreeing on the key areas for investment, including the screening criteria and
selection process
• Clarifying and agreeing on roles and responsibilities
• Ensuring transparency around process
• Deciding next steps and timeframe
© T.Pollett
Set the Parameters 79
Chapter 7
Select the Right
Implementation
Model and Partners
• Understand the Different Implementation
Options
• Consider Timeframe, Budget, and
Local Context
• Key Questions for Implementation
Planning
• Strategies for Successful Partnering
Implementation
and Partnering
Implementation
and Partnering
Forming strategic partnerships that can help a company to
leverage and maximize its community investments is good practice.
Chapter 7: Select the Right Implementation
Model and Partners
Once the key parameters of the CI strategy are established, the next step is figuring
out how best to deliver the program. This too is a strategic choice guided by distinct
variables, such as the company’s objectives, project time horizon, budget, and the
characteristics of the local operating context—including availability of partners. Because
different implementation models have different advantages and disadvantages (that
may serve one set of objectives over another), it helps to understand the various options
when determining the best fit for delivering your CI program.
Beyond the choice of implementation model, there are some common themes
related to implementation effectiveness that are also worth thinking through up-
front. These pertain to how a company will maintain its involvement and oversight;
the sustainability and exit considerations for the model chosen (particularly from
a financial standpoint); how to build capacity to support participatory decision
making and governance; and how to select the right partners.
Forming strategic partnerships that can help a company to leverage and maximize
its community investments is good practice. (Company engagement in multi-
stakeholder partnerships is increasingly common.) It is driven by the basic
underlying tenet that each partner has something valuable to contribute—and
that, by systematically working together, the partners can achieve their goals more
effectively than by working alone.
UNDERSTAND THE DIFFERENT IMPLEMENTATION OPTIONS
An implementation or delivery model is the organizational structure through which
a company carries out its community investment program or supports others in
doing so. In practice, many companies use “hybrid” approaches—a combination of
different mechanisms to deliver their programs.
Table 7.1: Common Implementation Models49
Model Description
In-house A company creates an internal department or unit to work
Implementation directly with communities to design and implement CI projects.
Company A company establishes an independent foundation as a
Foundation separate legal entity to carry out its CI program. Foundations
can have grant-making authority (i.e., financing of CI programs
implemented by others) or serve an implementing function
(implementing their own projects and programs).
Third-party A company engages a third party, such as a local or international
Implementation NGO, to work with local communities in designing and
implementing CI projects, or it supports an existing initiative
being implemented by others.
Multi- A company establishes or joins a voluntary or collaborative alliance,
Stakeholder network, or partnership. This implies cooperation between two or
Partnership more actors in a manner that shares risks, responsibilities, resources,
and competencies, and involves a joint commitment to common
tasks and goals.
Hybrid A company utilizes a combination of two or more implementation
models to deliver various components of its CI program.
Select the Right Implementation Model and Partners 81
Figure 7.1: Examples of Implementation Models50
In implementing its community In Ghana, Newmont Mining has set ABB’s Access to Electricity Initiative is a
investment programs along the up a community development fund to partnership model with companies,
Baku-Tbilisi-Ceyhan pipeline route, support development activities in ten development agencies, financial
BTC chose to partner with local and communities in the Ahafo area. The institutions, and regional authorities to
international NGOs. Where Newmont Ahafo Development electrify poor rural communities. The
international NGOs were selected, Foundation, established by the aim is to provide the preconditions for
they served as lead partners, company in collaboration with local more sustainable development in these
implementing projects in collabora- stakeholders, manages the fund with a communities.
tion with local organizations. nine-member board of trustees.
Montana Exploradora de
Cargill relies on its Care Guatemala has an in-house
Councils (employee-led community investment
groups) to implement Company program and has also
strategic community Foundation established a local foundation,
involvement activities on Fundación Sierra Madre, to
behalf of their businesses. Multi- support a broader range of
Third-party
While councils vary in Stakeholder programs. These include
Implementation
structure, size, and Partnership health, education, and
leadership, their goal is to vocational training, commu-
ensure that Cargill is nity capacity building, and
investing its financial and economic development.
human resources in local
communities to help
meet its business Hybrid
In-house Implementation Implementation
objectives. Implementation Models Model
CONSIDER TIMEFRAME, BUDGET, AND LOCAL CONTEXT
Decision making around how to deliver community investment is driven by both
internal and external factors and considerations. Some of these factors may impose
limitations on the choice of implementation model in a given setting or have
implications in terms of efficiency and effectiveness. Three important elements for
companies to consider:
• Time Horizon: How long will the company be operating in the area and how
quickly does it need its CI program up and running?
• Budget: How much will the company spend per year on CI, and how secure is
this funding?
• Local Context: What is the level of local implementation capacity and what is
the potential for partnerships? Are there government or legal requirements for
establishing certain vehicles to receive or channel funds for local development?
82 Select the Right Implementation Model and Partners
Table 7.2: A Road Map for Deciding How to Implement51
In-house Implementation Third-party Implementation Foundation Multi-Stakeholder Partnerships
Time • Short to medium • Short, medium, long • Long • Medium to long
Horizon
Budget • Variable cost depending on the size of the • Budget can be any size • Requires significant funds (endowment or • Variable cost depending on the number of
in-house team multi-year commitment) partners and the scope of program
• Involves set-up costs (legal and administrative)
• Overhead and operating costs can be
significant
Local • Where local capacity and partners are • Relies on the availability of strong local • Where regulatory requirements mandate • Relies on the existence of partners with similar
Context lacking organizations or existing programs to support creation of an independent foundation or trust values and development objectives in the
• Where quick results are needed CI to receive funds same region or target area
• Where revenues allocated for CI are significant
Pros • Helps promote close links across business • Creates flexibility by bringing in specific • Helps to attract other partners and external • Helps to leverage outside knowledge, skills,
operations and better coordination with technical expertise, as needed, on a short or funding resources, and/or networks
other mitigation efforts (i.e., environmental long-term basis • Can promote greater community participation • Can increase likelihood of success through
remediation, resettlement) • Helps to leverage outside knowledge, skills, in management and decision making enhanced ownership and sustainability
• Helps develop internal capacity for and and networks • Can operate at a broader level (i.e., regional, • Increases potential for scalability, extended reach
expertise in CI national, or global) • Enables both risk sharing and cost sharing
• Helps increase sense of ownership and • Can help a company separate legal liability (its
accountability over CI activities own versus the actions of the community’s CI
• Helps leverage corporate strengths and program)
capacities • Allows better separation of mitigation from CI
• Helps create a direct connection to the activities
Select the Right Implementation Model and Partners
community • Enables implementation of a CI program that
• Helps to have CI benefits directly associated can outlive the company’s presence and/or
with the company participation
• Helps to increase consistency by not being • May provide tax advantages in some contexts
dependent on consultants and outside partners
Cons • CI may be mixed with community relations, • NGOs may have little experience working with • Costs involved in establishing and operating • It can be time consuming to agree on shared
social mitigation, resettlement, and other the private sector foundation goals, objectives, and measures of success, as
non-CI activities • Different approaches and expectations can be • Time necessary to build institutional capacity well as to secure specific commitments
• Requires local capacity building to ensure problematic to manage and establish credibility • Company has to give up a certain amount of
sustainability of projects after company • Third parties may have their own agendas, and • Separation from the company might lead to control over decision making and outcomes
participation ceases may not always adhere to company objectives CI activities being divorced from the company’s • It is often a challenge to establish mechanisms
• Overhead costs can be high due to the in- • The community may associate benefits brought core business strategy; less credit going back to for sharing roles, responsibilities, costs, and
house staff required by CI activities with the implementing partner the company for achieved results; and/or increased ownership
and not the company risk resulting from loss of direct engagement; • Different interests or objectives among
• Building institutional memory and retaining • Finding appropriate leadership can be partners can create conflict, especially when
lessons learned can be a challenge challenging since board members will need to nontraditional partners come together
• Costs can increase if international expertise make a long-term commitment (often on a pro
is required bono basis)
• Working through existing programs creates a
83
risk that the company may have little influence
over the project’s design and outcomes
KEY QUESTIONS FOR IMPLEMENTATION PLANNING
When thinking about how to implement CI, there are certain fundamental questions
that are applicable regardless of the type of model selected. These include:
• Does your implementation model support your objectives?
• How will you maintain ownership, visibility, and oversight?
• How will participatory decision making and governance be fostered?
• Should you pilot before scaling up?
• How will transparency, accountability, and sustainability of funding
arrangements be ensured?
• What capacity building is needed to support the chosen model/encourage
local delivery?
• What is the exit or handover strategy for the chosen model?
Does Your Implementation Model Support Your Objectives?
The chosen implementation model(s) should help a company meet its CI strategy
Irrespective of the objectives. If a company wants to engage partners and attract external funding, for
model chosen, example, a multi-stakeholder partnership model or a well-structured independent
maintaining foundation is more likely to facilitate external support than a company-run CI
program. Similarly, if a company wants to support existing local institutions and
ownership, organizations, engaging NGOs as third-party implementers or piggybacking on
visibility, and quality existing programs might be preferable to setting up a new structure. Where “quick
oversight of any impact” projects are required in the short term to meet high expectations or gain
company-supported government approval, a company may choose to implement CI projects itself while
longer-term arrangements for CI delivery are developed.
CI initiatives is
needed. How Will You Maintain Ownership, Visibility, and Oversight?
Irrespective of the model chosen, maintaining ownership, visibility, and quality
oversight of any company-supported CI initiatives is needed—both for risk and
reputation management and to account to shareholders on how company resources
are being managed and spent. Visibility ensures that stakeholders associate the CI
program with the company so that the business derives the benefits it seeks in terms
of positive perceptions and relations. However, the amount of in-house capacity
(staff and expertise) and resources (time and money) required to effectively set up
and monitor CI programs—even when the company is not directly involved with
implementation—is commonly underestimated. Experience in emerging market
contexts shows that companies find themselves having to provide a much more
intensive level of support and oversight than originally anticipated.
How Will Participatory Decision Making and Governance be Fostered?
A key feature of strategic CI is building representative and participatory decision-
making and governance structures as a means to empower local communities
and develop capacity. Companies do this by involving representatives from local
communities, government, and civil society on governing boards, committees,
councils, forums, and other multi-stakeholder decision-making bodies. Meaningful
participation often requires capacity building, training, and mentoring over time so
that imbalances in power and access to information among stakeholders can be
addressed. (See Chapter 5 for details on capacity building). Where there are already
84 Select the Right Implementation Model and Partners
local structures or processes around local development planning, these should be
explored as potential channels for participation.
Should You Pilot before Scaling Up?
A pilot is an opportunity to “learn on the job,” and it can contribute significantly to
capacity building. Often, a pilot project provides valuable learning about what works,
what doesn’t, and the actions required before scaling up activities. Depending on
the context, it can be worth starting out small, testing ideas, and building trust and
confidence among partners before commencing full-scale program implementation.
Chevron (Nigeria) - A regional development governance
structure52
There are over 425 individual communities located near Chevron’s operations
in the Niger Delta. Because the company found it difficult to work with so
many villages on a one-on-one basis, it asked them to group themselves into
eight clusters. Chevron Nigeria then signed GMOUs with all eight clusters.
The GMOUs are nonbinding, multi-year agreements that have become a
central component of Chevron’s engagement with Niger Delta residents.
State governments participated in the agreements, which created a Regional
Development Council (RDC) governance structure in each cluster to redistribute
funds from Chevron Nigeria’s joint venture with the Nigerian National Petroleum
Corporation. Functioning as early-stage, community-run foundations, the RDCs
work closely with state and local government and the Niger Delta Development
Commission to plan and manage development projects in their geographic areas.
In addition to the direct financial support provided by Chevron to implement CI
projects, each RDC receives support and oversight from several NGOs.
The RDCs are comprised of several subcommittees:
• Community Engagement Management Board: Includes representatives
from the communities, state and local government, Chevron, and
NGOs. The board provides general oversight and financial control over
RDC activities, and must approve all proposed community development
plans and disbursement requests.
• Project Review Committee: Includes RDC members and representatives
from state and local government, the Niger Delta Development
Commission, Chevron, and a local NGO. Each Project Review
Committee reviews annual work plans and budgets, validates project
execution, and monitors outcomes.
• Accounts Audit Committee: Includes at least one RDC member and one state
government representative, as well as representatives from Chevron, one
NGO, and a donor agency. The committee aims to ensure transparency and
accountability by advising the RDC on accounts and budget preparation.
• Conflict Resolution Committee: A dispute resolution body including
RDC members and representatives from Chevron, the Niger Delta
Development Commission, state government, and NGOs.
A Community Engagement Management Board sits atop the entire process and
makes final decisions. The board includes RDC members and representatives
from Chevron, state and local government, and NGOs.
Select the Right Implementation Model and Partners 85
baku-tbilisi-ceyhan (BTC) Pipeline (Azerbaijan) - Piloting a
“Star Community” Approach53
The BTC Community Investment Program’s implementing partner in
Azerbaijan, Save the Children, used a “star community” approach to incentivize
community participation, build capacity, and direct community investment
resources toward communities with the greatest capacity to effectively utilize
them. Initially, Save the Children worked with all communities covered by
the program to develop quick impact projects. Communities were given
training on how to identify projects through participatory assessment, how to
develop budgets and implementation plans, and how to manage the projects.
Communities could then apply to Save the Children to fund up to 75 percent
of the total cost to implement the projects they had designed.
Based on the success of these projects, a subset of communities were identified
as “star communities” and invited to apply for additional funding to implement
a second round of projects. In addition, these communities were encouraged to
train and mentor less successful, neighboring “nascent” communities.
The success of the “star communities” serves as an example of how piloting helps
to identify and incentivize the best performing communities and create a platform
to assist other local communities by transferring these skills and experience.
How Will Transparency, Accountability, and Sustainability of
Funding Arrangements be Ensured?
Corruption, lack of transparency, and misuse of CI funds pose a major challenge for
companies. One way companies tackle these issues is to make public all finances,
contracts, payments, and expenditures related to CI. Another way is to make specific
individuals or bodies accountable, and to build checks and balances into the system.
If a company’s contribution is not sufficient to meet the program’s goals, there may
be an opportunity to attract external funding. It is important to think through how
external funds will be raised as this can have implications for other aspects of the
strategy, including choice of implementation model. Establishing multi-stakeholder
partnerships, seeking employee contributions (cash or in-kind), or establishing
structured employee volunteering programs can be used as potential strategies for
leveraging company funds.
Lack of financial viability once a company reduces or withdraws funding support
can also pose a challenge. This can be addressed through measures to ensure the
adequacy and continuity of funding, particularly in difficult economic times or
unforeseen circumstances. Questions to consider at this phase include:
• How does the company intend to fund the program? Over what timeframe?
• Will the company be the only contributor, or will it also try to attract
external funds?
• How much funding will the program need?
• In what form can it receive funding contributions (e.g., cash, stock, and/or in-kind)?
86 Select the Right Implementation Model and Partners
• How long will the company’s financial contributions last? If an endowment is
provided, for example, is it expected to be permanent or time limited?
• What contingencies are in place for unforeseen events or expenditures?
• What is the company’s exit strategy and how will the program transition to
alternative sources of financing?
What Capacity Building is Needed to Support the Chosen Model?
Regardless of the model chosen, capacity building to support local delivery will be
a key consideration. (See Chapter 5 for further guidance on capacity investments
and strategies.)
What is the Exit or Handover Strategy for the Chosen Model?
All the key questions for implementation planning should be addressed in a
company’s exit or handover strategy in order to ensure long-term sustainability of
the implementing model. In addition, it’s a good idea to consult stakeholders and
get their agreement on the exit strategy upfront. (See Chapter 6 and Tool 8 for
further guidance on exit strategies.)
Foundation for Environment and Development (Cameroon) - Addressing the
Challenges of Financial Sustainability54
The Foundation for Environment and Development in are pegged to the Euro), the endowment is estimated
Cameroon (FEDEC) was created in 2001 contingent to be depleted much sooner than originally planned.
on the approval of the Chad Export Project. It was
established as an independent entity designed to The way in which FEDEC was designed affected
provide long-term financial support to environmental its ability to attract external funds and partners.
enhancement and indigenous people development Key lessons include:
activities.
• The perception of FEDEC as “Exxon’s
FEDEC programs are focused on three main foundation” and the company being seen
components: two environmental offsets in National as “resource rich” has affected the ability to
Parks and a third one to support the development attract other potential donors.
activities of the Bakola/Bagyeli indigenous communities • FEDEC was established to support specific,
located near the pipeline corridor in Cameroon. narrowly-defined program areas (e.g.,
specific national parks and indigenous
Financial Sustainability: The foundation was set communities) rather than working toward
up with a capital contribution of USD $3.5 million broader development objectives (such
from COTCO, the pipeline operator (constituted by as environmental protection or poverty
a consortium of ExxonMobil, Petronas and Chevron, alleviation) that might have held wider appeal
and the Governments of Chad and Cameroon), to be to other potential partners.
used as an expendable endowment over the 28-year
• FEDEC did not have a long-term development
lifetime of the project. In addition, FEDEC would be
plan, which could have served as a valuable
open to investment by any legitimate donors.
fundraising tool among donors who are more
likely to support projects that demonstrate a
However, due to several factors including much larger
clear strategic plan for the use of their funds.
than expected administrative costs and an unfavorable
exchange rate (the endowment was in US Dollars but
program expenses were in Cameroonian Francs, which Continued
Select the Right Implementation Model and Partners 87
Foundation for Environment and Development (Cameroon) - Addressing the
Challenges of Financial Sustainability54 Continued
• While lack of capacity among local Moving Forward: In order to address the
community organizations and NGOs to unforeseen challenges that arose, FEDEC is taking
develop grant proposals was acknowledged, the following steps to:
the capacity-building needs of this group
were not sufficiently budgeted for. Even • Develop a community investment strategy
though a community development facilitator with financial and technical support from
was part of FEDEC’s staff, capacity building COTCO and IFC to provide longer-term
took longer than expected and caused development support in a more coordinated
financial strain (as no salary provisions for manner to the Bakola/Bagyeli through a long-
this role were budgeted beyond the first term Indigenous People’s Plan.
three years).
• Complete a SWOT analysis for FEDEC
• Lack of buy-in and follow through from key and take actions to address institutional
local public stakeholders forced FEDEC to strengthening and capacity-building needs.
fund some additional commitments (such
• Create a fundraising plan to reinvigorate the
as paying salaries of “eco guards” and
endowment and seek partnerships with other
provisioning them with basic equipment).
national and international organizations.
These expenses were not budgeted for,
nor were they FEDEC’s responsibility, but
they contributed to the depletion of the
endowment more quickly.
STRATEGIES FOR SUCCESSFUL PARTNERING
“Finding partner The search for more cost-effective ways to deliver community programs, share
organizations that related risks, reach more people, and improve the sustainability of outcomes has
can maximize led a growing number of companies to consider multi-stakeholder partnerships
as an integral part of their corporate community investment strategies. With the
corporate new emphasis on being strategic, the partnerships too are evolving into more in-
investment is depth, mutually beneficially alliances that utilize comparative advantage and the
an important unique competencies of various partners to achieve shared objectives and enhance
component community investment outcomes.
to strategic
community Although there is no set definition of a multi-stakeholder partnership, the following
features are commonly cited:56
development.”
• a voluntary alliance bringing together stakeholders from different sectors, such
— General Electric55 as the public sector, businesses, civil society, and international organizations
• complementarity of resources and skills to address a common issue
• modus operandi that safeguards interests and levels the playing field for those
involved
88 Select the Right Implementation Model and Partners
Five Strategic Reasons to Partner
Companies know that partnering is not always easy—it can have its advantages
and disadvantages. When deciding if and with whom to partner in undertaking CI
initiatives, it is worth considering whether the partnership offers one or more of the
following benefits:
• Risk sharing
• Ability to leverage expertise, skills, and resources
• Extended reach
• Scalability
• Enhanced likelihood of successful outcomes (e.g., shared ownership,
sustainability)
99 Risk Sharing
While partnering requires giving up a certain degree of control over decision
making and outcomes, shared control also brings with it the benefit of shared risk.
In this sense, partnerships can be an effective means to tackle local development
issues that pose risks to various parties but cannot be effectively addressed by any
single party. When others have a stake in the success of a development intervention
it spreads the risks (and often the costs), enabling a company to take action
without having to bear sole responsibility.
99 Ability to Leverage Expertise, Skills, and Resources
A partnership makes sense when it results in greater returns on community investment
than the company is likely to achieve on its own. For example, much of the skill and
knowledge needed to facilitate community engagement and development is likely to lie
outside the core competencies of most companies. The same can be true of expertise
in technical areas, such as health, education, microfinance, water and sanitation, or
training and capacity building. Local knowledge, relationships, and networks are also
valuable contributions that local partners can bring, while others may be able to offer
additional financial resources. By relying on the distinct roles and competencies of
each partner, a partnership that is strategic can generate efficiencies by allowing the
company to focus on the components it is best placed to deliver.
© T.Pollett
Select the Right Implementation Model and Partners 89
Steelpoort Valley Producers Forum (South Africa) - Scaling up through Industry-
Government Collaboration57
Steelpoort Valley Producers Forum (SVPF) is a group of SVPF was created to address the collective needs
12 platinum and chrome mining companies operating of the mining companies and to promote the
in the Greater Tubatse Municipality in South Africa. At principles of cooperative governance to ensure
the time of SVPF’s creation, the member companies sustainable local economic development. All
and their host communities faced a number of projects that are implemented by SVPF support
development challenges: local municipal industrial development plans. A
project management unit manages the existing
• A shortage of water in the area, presenting a agreements between local government and
major risk for company operations and local participating mines until government capacity is
communities sufficient to carry out these functions. To date,
• Lack of local governance capacity and spatial SVPF has supported development projects in the
planning, creating difficulties with respect to following areas: (i) spatial development and GIS; (ii)
managing infrastructure requirements and land water management; (iii) transport infrastructure;
use, and to providing meaningful support for and (iv) capacity building and training of the Greater
local development Tubatse Municipality Technical Department.
• Uncoordinated efforts by individual mines As a result of the success of SVPF and other similar
around their social responsibility mandates, initiatives, the concept of “producers forums” is
limiting the industry’s potential for meaningful now moving beyond the mining industry in South
development impact at the municipal and Africa to other industry and multi-industry groups
community levels (such as, for example, a producers forum involving
In addition, the development of mining operations both mining and agricultural companies).
ahead of municipal infrastructure development led to
negative perceptions about the industry.
Standard Chartered Bank - Extending the Reach of HIV/AIDS Workplace Programs58
Standard Chartered Bank’s award winning “Living One of the key success factors of the program has been
with HIV” program began as an internal workplace its varied partnerships with governments, business,
HIV education campaign. Since then, HIV/AIDS foundations, and local organizations, which have
has become a focus area of the bank’s community allowed Standard Chartered to successfully roll out the
investment program. This decision was based on the program in the communities. In partnership with the
recognition of the significant impact of HIV/AIDS on World Economic Forum, for example, the company
the communities where the company does business has already reached out to more than 1,000 small and
and the company’s belief that education is key to medium businesses in Africa—most of which do not
fighting the disease. have enough resources of their own to create HIV/
AIDS programs for their employees.
Through its program, Standard Chartered shares
resources and tools originally developed for its own Standard Chartered has also leveraged local partners to
employees, and raises awareness internally and extend the reach of its program to youth and young
externally through a volunteer network of “HIV adults (ages 15-24), who account for 45 percent of
Champions.” The company’s aim is to reduce the new HIV infections but to whom the Bank, on its own,
spread of the virus by promoting behavioral change has limited access. By partnering with AIESEC (one of
among its employees and the one million other the world’s largest student organizations), and through
people that will be educated through this program. collaborations with individual schools and universities in
HIV-endemic regions, the company will be able to bring
its HIV/AIDS education program to 300,000 young
adults by the end of 2010.
90 Select the Right Implementation Model and Partners
99 Extended Reach
The ability to extend the reach of local development benefits to a wider population,
or to expand the kinds of services delivered to a target population by joining
forces with others, offers other good reasons to partner. Partnering can also help
to enhance the coordination of local or regional programs, taking advantage of
complementarities among various initiatives while avoiding duplication of efforts.
99 Scalability
Partnerships can also be an effective channel for scaling up successful CI models
and approaches. Moving from the localized impact of individual projects to more
systemic interventions can, however, represent a significant challenge. Many
successful local partnerships remain as “one off” engagements because scaling
them up often requires different types of considerations, governance structures,
and partners. Examples of potential channels for scaling up include:59
• Governments that can support scale up through various regulatory instruments
and incentives (e.g., South Africa’s Black Economic Empowerment policy)
• Corporate supply chains, distribution networks, and corporate subsidiaries can
be an effective way to leverage the impact of successful CI models
• Collective corporate action—often formalized through business coalitions—can
both mobilize skills and resources and advance private sector advocacy efforts
• Market mechanisms, such as certification and labeling systems, can create new
business incentives and/or reinforce the “demand side” by providing relevant
information to external stakeholders
99 Enhanced Likelihood of Successful Outcomes
For all the reasons cited above, partnerships can increase the chances of achieving
positive outcomes. While not a guarantee of success, effective partnerships create
a sense of shared ownership among stakeholders, which in turn can generate a
stronger commitment to the project’s sustainability. When done well, knowledge
sharing through partnering can result in mutual learning, skills transfer, and
empowerment of individuals and organizations, not to mention improvements
to the project design itself (e.g., by more accurately reflecting community and
government perspectives).
Key Elements of a Partnership Agreement
While every partnership is likely to follow its own unique trajectory, there are some
common steps in partnering that can help increase the likelihood of success. The
decisions made at the start of the process are typically reflected in a partnership
agreement. The key elements of such an agreement might include:60
• Strategic and operational goals and objectives of the partnership (both
shared and individual)
• Joint work plan encompassing activities, schedules, indicators, and funding
commitments
• Level of required institutional commitment from each of the partners
• Roles and responsibilities, utilizing the skills and strengths of each partner
and drawing on the concept of “core complementary competencies”
Select the Right Implementation Model and Partners 91
• Specific commitments based on agreed goals and roles, and appropriate to
the organizational resources and abilities of the respective partners
• Initial, easily achievable goals to generate momentum and build
confidence among partners
• Decision-making principles and processes established through formal
(e.g., memorandum of understanding) or informal mechanisms
• Capacity-building measures to strengthen participation, governance, and
the ability of the partners to implement their commitments
• Mechanisms for accountability in the partnership (e.g., boards, oversight
committees, adherence to codes of conduct, accounting standards)
• Procedures for communicating among partners and a mechanism to
resolve differences
• Joint definition of success, expected results, and ways to measure the
impact of the partnership
• Appropriate channels for dissemination of results
CEMEX (Philippines) - Establishing Clear Roles and Responsibilities in Partnerships61
CEMEX Philippines initiated an “Adopt-a-School” project as part of its community investment activities
surrounding its APO cement plant. The process of consultation with local residents, local political leaders, and civil
society groups culminated in the signing of a memorandum of agreement that assigned roles to each party. The
creation of a computer center at the Naga National High School (NNHS) illustrates this division of responsibilities.
DIVISION OF ROLES IN THE ADOPT-A-SCHOOL PROJECT
COMPANY APO Cement
• Provided NNHS with new desktop computers.
• Provided volunteer employees to teach the students basic computer literacy.
GOVERNMENT Municipal Government of Naga
• Provided 1 air conditioning unit.
NAGA NATIONAL • Assigned a teacher who possesses basic knowledge of computers to undergo
HIGH SCHOOL training on the use of IT for instruction, and to implement the computer training
curriculum prescribed by the task force for Public High Schools.
• Provided suitable accommodation for 10 computers and guaranteed the exercise of
utmost care in using them.
• Implemented the curriculum for computer literacy and its use as a tool for the
teaching-learning process.
• Ensured the maintenance of computer units.
• Made arrangements with other local and private institutions/organizations and
educational stakeholders for the solicitation of funds and other forms of assistance
for the operation of the project.
• Provided the task force on Public High Schools a quarterly status report, including a
guarantee on the maximum utilization of the computers as a tool for the teaching-
learning process.
CIVIL SOCIETY NNHS Parent-Teacher Community Association
• Provided 1 printer, 10 computer tables, 21 chairs, electrical and lighting as required,
and an appropriation for maintenance.
Philippine Business for Social Progress
• Directly implemented the project, including regular monitoring and submission of
photo documentation and mid-year and annual reports.
92 Select the Right Implementation Model and Partners
Select the Right Implementation Model and Partners 93
94 Select the Right Implementation Model and Partners
Chapter 8
Measure and
Communicate for
Strategic Advantage
• 10 Ways to Make the Measurement of CI
More Strategic
• Linking Community Outcomes and
Business Value
• Communicating About CI
Measurement and
Communications
As a company becomes more strategic about CI, measuring success
Measurement and
Communications
becomes less about how much it spends in the community and
more about whether it achieves the objectives it sets for itself.
Chapter 8: Measure and Communicate
for Strategic Advantage
Monitoring and evaluation has most value when a company acts on the information
it collects and engages stakeholders on the results of its community investment
program. Sound metrics can strengthen the business case for CI, help secure ongoing
support from management and shareholders, and convey signals to the market about
good environmental and social risk management. Good communications amplifies
reputational and other business benefits from CI by increasing visibility and awareness
among stakeholders of the positive impacts generated for local communities.
As a company becomes more strategic about CI, measuring success becomes
less about how much it spends in the community and more about whether it
achieves the objectives it sets for itself—in terms of both development and business
results. From a business perspective, the ability of CI to contribute to positive local
perceptions about the company over time is paramount. Effective measurement
should therefore inform companies of the impact their investments are having;
whether this impact is viewed positively or negatively by local people; and whether
(and how) this translates into tangible business value.
In practice, this suggests a lighter touch but more frequent pulse-taking; an
increased emphasis on participatory and qualitative methods and indicators;
developing measures of success jointly with local stakeholders; and a focus
on measuring outcomes for both the business and communities. Finally, a
communications plan for CI—developed at the outset—is an integral part of the
overall strategy.
10 WAYS TO MAKE THE MEASUREMENT OF CI MORE STRATEGIC
1. Set SMART objectives that can be attributed to CI
2. Jointly define indicators and measures of success with stakeholders
3. Establish a baseline
4. Focus on outcomes and impacts, not just outputs
5. Focus on qualitative, not just quantitative
6. Track changes in community perceptions
7. Make measurement participatory
8. Track results by gender
9. Integrate CI into the company’s broader monitoring and evaluation systems
10. Use monitoring and evaluation results to drive resource allocation for CI
Measure and Communicate for Strategic Advantage 95
Set SMART Objectives that can be Attributed to CI
Vaguely defined goals and objectives for CI can make measurement challenging.
A lack of specificity as to what a company wishes to achieve makes it difficult to
measure progress and develop practical indicators. Good practice encourages the
use of the “SMART” method. Ideally, program-level objectives will link back to
strategy-level objectives, which in turn are linked to the business case.
Attribution is another common challenge when setting objectives and indicators
for CI because there are so many other factors that can affect local development
outcomes and the company-community relationship (see Chapter 1). One way to
address this challenge is to try to set goals and objectives whose achievement can
be attributed to the CI program. This means focusing on outcomes over which the
CI program has control. Equally important is to clarify where this is not the case.
Making Objectives “SMART”
• SPECIFIC: Objective relates to intended results and identifies the target
group(s)
• MEASURABLE: Objective is clearly defined, with agreement on how
to measure/collect evidence (from both the company and community
perspectives)
• ATTRIBUTABLE: Objective is fully or partially responsible for observed
changes
• REALISTIC: Objective can be achieved
• TIMEBOUND: Objective establishes a time period by which the
observed changes will take place
Examples of SMART Objectives Set by Companies62
Standard Chartered Bank, Living with HIV Program
Through collaboration with other organizations, the Bank aims to educate one
million people about HIV/AIDS by 2010, using resources, models, and tools—
including an online e-learning module—that the company has developed.
Engro Food Pakistan and UNDP Partnership
This three-year, USD $6 million project, launched in August 2006, aims to
provide enhanced income and employment for 3,600 rural women through
livestock skills development, improved livelihoods, and food security at the
household and community levels.
Starbucks Community Involvement Program
Starbucks committed over USD $500,000 to a three-year program to improve
economic and education prospects for more than 6,000 people in Western
Hararghe, a part of rural Ethiopia known for its high-quality coffee. This grant
will help 1,500 households improve adult literacy, reduce crop losses, and
establish microcredit and microfinance services.
96 Measure and Communicate for Strategic Advantage
Jointly Define Indicators and Measures of Success with Stakeholders
Because success can mean different things to different people, companies have found
it useful to define up front—through a participatory process—what success will look
like in the eyes of the community, the company, local government representatives,
and other relevant stakeholders. Once defined, the next step is to combine these
various perspectives into a set of quantitative and qualitative indicators that are
meaningful to all parties. Some of the questions to consider include:
• What outcomes do we expect? By when?
• How will we know when we have reached our objectives?
• How will we define success?
• What indicators will we use? Quantitative? Qualitative?
• Whose data will be used and who will make the value judgment based on the
indicators?
Simply measuring Developing CI metrics jointly serves to clarify expectations and bridge differences
in perceptions of “success” among stakeholders. This reduces the risk that results
outputs does not will be interpreted differently later on (e.g., what the company sees as a success
tell the company is regarded with disappointment by the community or vice-versa). This type of
whether local triangulation of perspectives is an important step toward building shared ownership
people feel that of results and capturing a company’s return on investment later down the line.
they have benefited Establish a Baseline
from a given
intervention. To understand how far you’ve come or what has been achieved, you must have a
clear sense of where you started. This is why establishing a baseline before a company
commences its CI program is so important. To be efficient, baseline data collection
for CI should be a targeted exercise rather than a general gathering of socioeconomic
information. It should focus specifically on the selected areas of intervention for CI and
build upon any existing data collection or assessments a company might have already
undertaken. Baseline data gathering can also be leveraged to include parameters that
will give local or district authorities better data for planning.
It is important to establish a baseline level for each specific indicator that will be
tracked. This will allow changes to be assessed over time. Good practice encourages
the collection of gender-disaggregated data to enable assessment of CI program
impacts on both men and women in the community (as these often differ).
Focus on Outcomes and Impacts, not just Outputs
Many companies focus on tracking inputs and outputs since these are easiest to
measure and to attribute directly to the company. However, stopping at outputs does
not tell the company what broader results or changes are being achieved, if any, and
whether local people feel that they have benefited from a given intervention. For
example, if a school gets built, this is a successful output. However, if families don’t
send their children to the school because the teacher is from a different clan or ethnic
group, the resulting outcome may be a decrease in school attendance and negative
community perceptions about the value of the new school.
From a strategic point of view, therefore, it makes sense to try to track outcome
(and ideally, impact) indicators because these get to the heart of if, and how, the
intervention has made a difference in people’s lives. They also help provide greater
insight into how CI might translate into business value for the company.
Measure and Communicate for Strategic Advantage 97
From a practical point of view, measuring impact can be challenging. While some
leading companies do make the investment in measuring and evaluating the long-term
impacts of their CI activities (especially in the case of large-scale programs), the majority
of companies find this difficult. This is due to the increasing complexity of attribution,
long time horizons, and the costs and practicality of data collection and analysis.
Figure 8.1: Hierarchy of Indicators - An Education Project Example63
Business Benefit
Hierarchy Inputs Outputs Outcomes Impacts Indicators
Definition Resources Goods and Expected Ultimate
invested (e.g., services changes in (long-term)
money, labor, generated by access, usage, effect of the Direct or
materials) the use of behavior, or intervention on indirect
inputs performance of a key dimension business value
(short-term) users (medium of development generated by CI
term) (e.g., living activities
standards)
Quantitative • Construction • Number of • % change in • Quantity of • Number of
indicators materials schools built access to links to graduates hired
• Number of • Number of education* employment or by the company*
hours of teachers hired* • % change in higher education* • % change in
community labor • Volume of enrollment rate* • Number of grievances
• Dollars school supplies • % change in graduates hired received by
contributed by procured rate of grade by the company* community
the company completion* groups served by
the school
Qualitative • Stakeholders’ • Perceptions of • Perceptions of • Quality of links • Changes in
indicators satisfaction with quality of schools quality/usefulness to local community
their role/ and teachers* of education employment perceptions of
participation in • Relevance and received* opportunities* the company
the project cultural • Beneficiaries • Perceptions of attributable
design* appropriateness reporting improved (directly or
of curriculum* application of socioeconomic indirectly) to the
acquired skills status or CI project*
and knowledge* opportunity
among
beneficiaries*
* Data disaggregated by gender
98 Measure and Communicate for Strategic Advantage
Performance Indicators and Targets for Community Investment64
RIO TINTO (Global Operations) Education for professional qualification:
% of participants in professional qualification
Rio Tinto recently established a Global Communities projects gaining employment; target=20%
Target which it plans to have implemented across all % of those participating in professional courses
operations by 2013. The target aims for all operations and in literacy projects earning certificates of
to have “locally appropriate, publicly reported social completion; target=80%
performance indicators that demonstrate a positive Direct generation of formal jobs: Number of
contribution to the economic development of the jobs generated by direct investments in social
communities and regions” where the company works, projects; target=10,000
“consistent with the Millenium Development Goals.”
Indicators that reflect the target already exist at some Association Los Andes de Cajamarca (Peru)
sites. Examples include:
ALAC is a corporate association established to
Sustainability (Rio Tinto Coal Australia): % of RTCA implement the principles of social responsibility
community projects that become self-funding after on behalf of Minera Yanacocha, with a focus on
3-5 years; target=100% sustainable development. Over the years, ALAC
Education (Rio Tinto Iron Ore): % increase in the has developed the following list of five standard
number of aboriginal students completing Year 10 community impact indicators for its economic
(Rossing): % increase in supported students entering development projects in Peru:
tertiary studies; target=25%
Workforce (Argyle Diamond Mine): % of all Increased income of the families/households
employees that will be local aboriginal by 2012; involved in projects (measured in US $)
target=40% Increased sales of businesses
Gender equality (RTA Guinea): % increase in the (measured in US $)
number of local girls enrolled at school Cost of employment generated (measured as US
$ invested/jobs generated and differentiated between
PETROBRAS (Brazil) rural areas and urban areas)
Number of jobs created by the projects
Petrobras has defined a set of goals and respective Number of businesses that incorporate basic
targets that the company aims to achieve by 2012 practices of social responsibility
in order to improve the management of its social
investments. Selected indicators and their targets Data on these five dimensions is collected
include: quarterly. ALAC organizes quarterly workshops
to discuss the results with the implementing
Prioritizing young people: % of participants organizations and to share learning. An impact
involved in company-supported projects will be assessment for each project is carried out 3-6
young people aged 15-29 years; target=50% months after project completion (ALAC’s projects
Generation of income and work opportunities: have an estimated duration of three years).
% increase in the average per capita income among
project participants; target=60%
Measure and Communicate for Strategic Advantage 99
Focus on Qualitative, not just Quantitative
Measures of both quantity (numbers, percentages, ratios) and quality (based on
people’s perceptions and behaviors) are needed to capture the full CI story. For
example, an indicator of the number of people trained becomes more meaningful if
the company also knows whether the participants found the content of the training
program useful and if they report confidence in applying newly acquired skills.
Quantitative measures tell a company “how much,” “how many,” and/or “how
often”; qualitative measures help assess what people think and provide insights
as to “how,” “how well,” and/or “why.” Qualitative data collection approaches
and indicators are especially relevant in the context of CI, where hard-to-quantify
intangibles such as social process, trust, capacity, sense of ownership, and
perceptions are so important. While qualitative data is not always collected as often
as quantitative data, it is a strategic imperative in the context of CI.
Community Track Changes in Community Perceptions
surveying has Tracking community perceptions on a regular basis is a common and effective way
proven valuable as of incorporating the qualitative dimension into the monitoring and evaluation
a management tool process. Many companies use perception surveys, for example, as a relatively
and “early warning quick and inexpensive means to obtain real-time feedback from local communities
and opinion leaders on company performance in a variety of areas. Community
system” on key surveying has proven valuable as a management tool and “early warning system”
issues affecting on key issues affecting the company-community relationship. Companies use this
information to make mid-course adjustments, to monitor their social license to
the company-
operate, to shape their communications strategies, and to assess their performance.
community
relationship. This type of monitoring is strategically important in the context of CI because success
here is so closely tied to the satisfaction, perceptions, expectations and actions of
local stakeholders—all of which are dynamic and can change at various points in
time. Stakeholder sentiment can be shaped by many factors that, although unrelated
to CI, can nevertheless influence both CI outcomes and the quality of company-
community relationships on the ground. For this reason, perception surveys are most
useful when they separate out different issues and programs (e.g., compensation,
employment, project impacts, and CI) as well as the performance of different actors
(e.g., the company, contractors, NGOs, local government, and other partners).
© World Bank staff
100 Measure and Communicate for Strategic Advantage
APRIL (Indonesia) - Using Perception Surveys to Monitor Stakeholder “Goodwill”65
Asia Pacific Resources International Limited (APRIL) The 2007 findings were compared against those
is a major producer of fiber, pulp, and paper, and of the previous year in order to identify general
operates almost 0.9 million hectares, including trends in stakeholder “goodwill” toward the
0.85 million hectares of forest land in Indonesia company. The key findings included:
and 45,000 hectares in China.
• Overall, APRIL was able to improve its
APRIL focuses its stakeholder engagement efforts goodwill with several important stakeholder
on the principles of mutual learning, feedback, and groups. NGOs moved from a very negative
improving awareness and understanding of the position to a positive index score. According
business model and the challenges the company faces. to the company’s report, this is most likely
In 2006 and 2007, APRIL commissioned TNS Indonesia due to improved performance in relation to
to carry out Stakeholder Perception Surveys relating environmental issues.
to company operations in Riau Province, Indonesia. • Goodwill from the media improved, but to a
The surveys assessed five major groups: (1) local lesser extent. While environmental performance
community, (2) media, (3) NGOs, (4) opinion leaders, has improved, the media became increasingly
and (5) employees. concerned about social conflict management.
The issue of land disputes also gained traction
The broad objectives of the surveys were: within local communities, and will be an
important issue for the company to manage
• To benchmark and assess company going forward.
performance in terms of social and
• There was improvement in the area of social
environmental responsibility and reputation
development, notably in terms of helping
(i.e., the “Goodwill Index”)
to reduce poverty in local communities. This
• To determine the impact that the company improvement was manifested in various
has on different stakeholder groups and activities, and stakeholders now generally
identify specific priority issues to be addressed recognize the contributions of the company
• To assess stakeholders’ expectations in relation to poverty reduction.
to a number of previously identified issues and • The perception surveys revealed a general
determine where the company needed to focus view across stakeholder groups that
to improve its overall “Goodwill Index” communication from the company could be
improved. While not seen as a critical issue,
it has a direct impact on other activities and
how well APRIL leverages the results of its
tangible efforts on the ground.
Goodwill Index by Stakeholder Group: Comparison 2006 to 2007
Looking across stakeholders, “employees” has the highest index with 65. The other groups display
lower goodwill toward Riaupulp. “NGOs” has the lowest index with 11 but improved
significantly compared to the previous year.
80
70 65
60 56
50
40
30 28 28
23
20 15 15 15 11
10
0
-10
-20 -11
Employees Opinion leaders Media Community NGOs
2006 2007
Measure and Communicate for Strategic Advantage 101
Make Measurement Participatory
Participatory monitoring and evaluation is another way companies can engender
trust, build local capacity, and promote mutual learning. Such approaches have
been shown to enhance credibility and ownership of development results among
stakeholders. Common tools and mechanisms used by companies are given below.
Table 8.1: Sample Tools and Mechanisms to Support Participatory M&E66
Participatory Tool Description
or Mechanism
Community Participatory process by which community groups can monitor
Scorecard and/or evaluate a service offered for their benefit. Beneficiary
groups and service providers identify key indicators of success or
progress, and rate effectiveness on a simple scale.
Good Neighbor An agreement that is co-produced by companies and communities
Agreement to reach a joint understanding of how issues of mutual interest
or concern will be addressed. Agreements are considered social
commitments rather than legal ones.
Community A suggestion box is placed in an easily accessible public location,
Suggestion Boxes and provides a mechanism for members of a community to
submit anonymous complaints, suggestions, and/or questions. The
box is opened publicly at predetermined times (e.g., weekly) and
a response is provided for each suggestion.
Community or Single or multi-stakeholder groups gather voluntarily to discuss a
Multi-Stakeholder specific set of topics, to analyze information and provide feedback
Forum or decision making, or for other relationship-building activities.
Citizen Report Short surveys with questions developed through participatory
Cards discussion are used to measure perceptions about the adequacy
and quality of public services. Report cards are also potentially
applicable to the private sector project context. Survey
responses are supplemented with qualitative data.
Track Results by Gender
Good practice encourages companies to track the results of their CI activities by
gender. This could mean formally incorporating gender as part of a company’s CI
strategy goals and objectives, or integrating gender aspects into monitoring and
evaluation. Practical actions to take might include:
• Set gender-specific targets
• Introduce requirements for gender-disaggregated data, and use this data
to inform program design
• Develop gender-sensitive indicators, with an emphasis on qualitative
indicators that can help to capture women’s perceptions and experiences with CI
• Use participatory approaches to monitoring and evaluation that
involve both men and women (e.g., in setting objectives, defining measures
of success, gathering data, and so forth)
102 Measure and Communicate for Strategic Advantage
“Looking at
our community RIO TINTO – UTILIZING GENDER-SENSITIVE INDICATORS TO IMPROVE
programs OUTCOMES68
from a gender
Rio Tinto is encouraging the use of gender-sensitive indicators in its operations
perspective, worldwide. Examples of such indicators include:
we know
that women’s Infrastructure: % of females/males with access to safe drinking water
participation Health: Incidence of particular health conditions amongst females and
males
in community Education: Ratio of boys’ to girls’ enrollment and completion rates in primary,
programs secondary, and tertiary education;
facilitates more % of females and males with relevant skill sets for employment
Empowerment: Number of females participating in planning and decision
broad-based and
making at the household and community level
lasting outcomes Level of satisfaction, by gender, in participation in a working group
compared to those
designed solely by
male community Integrate CI into the Company’s Broader Monitoring
and Evaluation Systems
leaders.”
Just as cross-functional alignment of business units (discussed in Chapter 2) enables
—Rio Tinto67 better internal coordination of community relations and overall risk-management,
the same principle of alignment applies when it comes to tracking and evaluating
community investment activities.
Ideally, the monitoring of CI programs should be integrated with other related
company-wide monitoring and evaluation systems and processes—including, for
example, those used to keep track of stakeholder engagement, environmental and
social performance, sustainability programs, grievances, and company risk registers.
Again, this serves to bring together different teams within the company who are
interacting with local communities (but might not otherwise talk to one another)
to promote more effective information sharing. This also allows for CI results to
be analyzed in the context of broader activities and issues that may influence the
company-community relationship.
There are various tools that a company may use to integrate important social and
environmental information. One example is a Sustainability Performance Scorecard
(see Dialog Telekom box).
© iStockphoto
Measure and Communicate for Strategic Advantage 103
Dialog Telekom (Sri Lanka) – Adopting an Integrated Performance
Scorecard Approach69
Dialog Telekom PLC is Sri Lanka’s flagship On the community investment side, Dialog Telekom’s
telecommunications service provider. In 2005, data requirements go beyond GRI guidelines and aim
Dialog Telekom was listed on the Colombo stock to capture outcome and impact indicators. Thus, for
exchange and, as a public company, made a example, in its distance education program where
commitment to measure and report to shareholders the company utilizes satellite technology to transmit
on its sustainability performance. The company education materials to schools that lack resources, the
then adopted the Global Reporting Framework (GRI company monitors a sample of students to measure
G3 Guidelines) to form the basis of its sustainability improvement in their examination marks.
performance framework, and carried out a
comprehensive internal gap analysis to identify key Adopting an integrated performance scorecard
performance areas and respective data parameters approach has enabled the company’s senior
that needed to be addressed to meet compliance management to get a balanced overview of the
requirements and best practice standards. company’s sustainability performance and to
assess risks. This information has also been used
The company’s sustainability performance in engagement processes, including establishing
framework is based on a single information system local partnerships. When considering the potential
called the “CR Navigator.” The system contains for scale up of its distance education program, for
data on 48 core and 30 supplementary indicators example, Dialog Telekom found that having tangible
covering social, environmental, and economic data on program outcomes enhanced the credibility
performance and is aligned with GRI requirements. of the company and helped to get local partners on
These indicators capture output, outcome, and board.
impact indicators in key areas of the company’s
performance, including its strategic community Finally, Dialog Telekom is using its Sustainability
investment activities. Together, these indicators Performance Scorecard framework to link the
represent the company’s Sustainability Performance requirements for data capture and to upload to
Scorecard. staff performance appraisals. This ensures clear
lines of accountability, regular maintenance of the
sustainability performance data, and informed
decision making around key aspects of sustainability
performance and resource allocation.
Use Monitoring and Evaluation Results to
Drive Resource Allocation for CI
One emerging approach being tested and discussed within some companies has
to do with using the monitoring and evaluation results of their CI programs to
inform their decision making on future allocation of CI resources. In other words,
if a company’s investments in one area are shown to have better results per dollar
spent (in terms of number of people reached, positive impact demonstrated,
and level of satisfaction of local stakeholders), for example, over investments in
another area, future resource allocations may be shifted in favor of the higher
performing types of activities. Likewise, the selection of new projects would be
influenced by the past performance of similar projects, whereas low-performing
projects would be phased out altogether.
104 Measure and Communicate for Strategic Advantage
Few companies LINKING COMMUNITY OUTCOMES AND BUSINESS VALUE
understand how
Ad hoc donations viewed as philanthropy typically do not create the expectation of a
their corporate
“return,” nor much incentive to track results. By contrast, a strategic approach strives
social responsibility to create shared value, including business value. A 2009 McKinsey study showed that
programs respond few companies understand how their corporate social responsibility programs (of
to specific business which CI is a subset) respond to specific business objectives, or whether they actually
create financial value. The study suggests that companies that can develop metrics
objectives, or to translate community outcomes into benefits (in terms that are valued by the
whether they market—risk reduction, enhanced reputation, productivity gains, and so forth) can
actually create reap additional benefits by communicating this information to investors and financial
analysts. An additional incentive is that high-performing environmental and social
financial value. programs are increasingly seen as a proxy for effective business management.70
VALUING PLACER DOME’S COMMUNITY INVOLVEMENT
PROGRAM (CHILE)71
A 2006 financial valuation study of sustainable development practices
determined, at the time, that if Placer Dome’s community involvement program
could fast track the Cerro Casale project by one year, it would add USD $0.81
per share to the value of the company’s stock. This translated into a 5.5 percent
valuation lift from its trading price at the time of USD $14.70 per share.
In order to perform the analysis, certain assumptions were made. In the case of
Placer Dome, the mining company had a high quality community involvement
program that used community advisory panels for stakeholder engagement
and community outreach. The study assumed that Placer Dome’s community
involvement program would lead to the fast tracking of project approval and
project “booking”—one year earlier than initially planned.
One of the key business benefits of a CI program is the improvement in the
relationship between a company and local communities, which contributes to a
smooth operating environment for the company. Developing a single indicator for
this may be challenging, but a number of proxy indicators may be used to capture
whether or not the operating climate/relationship with stakeholders is improving.
Measure and Communicate for Strategic Advantage 105
Indicators of the Company-Community Relationship72
• Number of protests, demonstrations, complaint letters, and
compensation requests
• Number of community participants in consultation meetings
• Closures of activities due to a disturbance by the community/local
stakeholders
• Quantity of work applications received from the community/local
stakeholders
• Incidents (related to communities or other stakeholders) affecting
company property or personnel
• Number of problems or grievances identified by local stakeholders
• Quantity—and the time period of delays—of governmental approvals
• Community sentiment surrounding current community development
initiatives (i.e., Do they fulfill needs and expectations?)
• Effectiveness of public consultation activities (i.e., Do local people feel
their participation has value?)
• Degree of trust felt by the community toward the company (and vice versa)
• Positions taken by the local government regarding decisions that affect
the company
• Community members say they are better off as the result of the
company’s presence
• Number of positive and negative press articles about the company
Measure Return on Community Investment
Measuring return on community investment is a new frontier in monitoring and
evaluation. Converting the business benefits of CI into standard financial metrics
is not an easy task. Table 8.2 describes three emerging methodologies that might
be used to monetize the benefits from a company’s sustainability investments
related to local communities.
106 Measure and Communicate for Strategic Advantage
Table 8.2: Emerging Methodologies for Valuing Corporate Sustainability Programs73
Methodology Description Key Features Example of Application
Financial Helps a company to calculate • Differentiates between value creation and value protection. See Tool 10 for details. Before applying the financial valuation analysis, the
Valuation Net Present Value (NPV) of • Quality of sustainability programs (e.g., design, management, capacity, execution) is built Rio Tinto Alcan greenfield bauxite mine and alumina
Tool for sustainability investments by into the model. Two important aspects of quality include stakeholder engagement and refinery’s total Net Present Value was calculated at USD
Sustainability capturing direct and indirect community perception. These are important inputs into the valuation process since high $1.5 billion over a 62 year mine life.
Investments benefits. quality programs improve risk mitigation potential.
Following the valuation process, the total value added
Developed by IFC/Rio of various sustainability investments at the project site
Tinto/Deloitte (e.g., community engagement program, health program,
access to water, local suppliers development) came to
a total of USD $517,168 (including USD $260,638 in
direct value creation and USD $256, 530 in indirect value
creation).
Social Return Measures the value of benefits • Stakeholders are central for effective implementation of SROI. Fresh Pastures CIC in England used an SROI approach
on Investment relative to costs of achieving • First step is to establish what SROI analysis will cover and who will be involved. The to measure the value of providing not only milk to
(SROI) those benefits. For example, a methodology also includes a materiality screen to determine which outcomes and impacts schools (its core mission) but also education to children
ratio of 3:1 indicates that an are not appropriate for inclusion. Key considerations: importance to stakeholders and data on healthy living, good dietary planning, environmental
investment of $1 delivers $3 in availability. issues, social inclusion, and equal opportunity. In a
social value. • A logframe approach is used to produce an “impact map” with project inputs, outputs, related SROI exercise, the company identified that for
outcomes, and impacts to determine the requirements for indicators and data collection. every £1 of contract deliverable, 59 pence of social
Provides information for • Detailed analysis of inputs (e.g., resources, staff time) is used to calculate the total return would be derived in environmental, education,
improving the way a program program investment. Benefits of the program (outcomes and impacts) include direct and and employment benefits.
is run and for shaping future indirect benefits as well as spillover effects. Results that would have happened anyway or
Measure and Communicate for Strategic Advantage
decision making. are a result of other factors are eliminated from consideration.
• Calculating the SROI involves adding up benefits, subtracting negatives, and comparing
Developed by the New the result to the investment. This is also where the sensitivity of the results can be
Economics Foundation (NEF) performed to determine which assumptions have the greatest impact on the model
• Emphasis is placed on reporting results and embedding learning in business processes.
The SD Effect Relies on the use of common • Methodology uses commonly used financial methods(e.g., Discounted Cash Flow The assessment of the sustainability practices of Teck
financial methods to isolate Valuation, Price to Cash Flow Per Share Ratio, Option Pricing Valuation, and Economic Cominco, a Canadian mining company, revealed that the
the effect of corporate Value Added) to isolate the effect of corporate sustainability practices on share price company demonstrated substantial respect for aboriginal
sustainability practices/ performance/company valuations and to express this effect in financial language. This peoples in terms of their role as employees and members
programs on share price report uses company-specific sustainability performance metrics from the Canadian of the community. The assessment further suggested that
performance. mining sector. this type of relationship contributed to enhancements
• Valuation relies on a project level/asset data and may rely on a series of assumptions. As in employee productivity and community assurance and
Developed by Yachnin & an example, the existence and quality of company’s community and stakeholder programs attendant reductions in business risk. The risk reduction
Associates, Sustainable could be linked with a set of assumptions about the business value that the company associated with Teck Cominco’s enhanced community
Investment Group Ltd., and is getting (e.g., having a high quality community engagement program leads to a fast and employee relations was estimated to be valued at
Corporate Knights Inc. tracking of the project approval process by X number of years). USD $859 million (USD $4.24 per share).
107
If measuring value COMMUNICATING ABOUT CI
is important,
If measuring value is important, communicating that value is equally important.
communicating
For business benefits derived from CI to be optimized, stakeholders at the local,
that value is equally regional, and international levels need to know about these investments and the
important. value they create. For example, if a community investment program is designed to
help improve a company’s reputation, secure a social license to operate, or support
risk management, communicating actively and repeatedly about the program must
be an integral part of the strategy.
As discussed in Chapter 1, there are multiple benefits to be derived from
communicating effectively about how a company is investing in people. Strategic
communications supports a company’s business goals and decision making related
to community issues. It promotes dialogue, participation, and a regular flow of
information, thereby enhancing transparency and recognition.
While the communications function is always important, it bears particular
significance for CI if a company:
• Faces political, regulatory, or reputational risks linked to the sector in which it
operates
• Has good stories to tell
• Has limited/no communications capacity (and therefore limited relationships
with media, civil society organizations, and the general public)
• Has a high national or international profile
• Faces particularly aggressive stakeholders, NGO campaigns, or public criticism
• Faces high expectations for local benefits or mistrust/skepticism from local
stakeholders
• Needs to strengthen internal or shareholder support for CI and make the case
for resources
© J.Pantoja
108 Measure and Communicate for Strategic Advantage
Figure 8.2: Targeting Communications for Community Investment
Communicating to Whom? Communicating What? Communicating How?
Communication Channels
Senior Community Investment
Management Programs
Other • Media (print, radio, TV,
Stakeholders Internet)
International • Community Meetings
(government, Community
NGOs, media) • Government Briefings
• NGO Interactions
Community Impact on • Roundtables / Conferences
Investment Business • Booklets / Brochures
• Public Announcements
Local Employees Community
Communities Benefits
Investor Financial
Community Impact
Tips for Communications Planning
Communications is an ongoing process that should ideally begin the moment a
company starts any activity in a new location and well before CI programs start
to yield results. A good communications plan identifies key actors and relevant
audiences, connects the company to its stakeholders and customers, defines and
delivers specific messages that will resonate with target audiences, and follows a
long-term plan of action.
99 Use Communications to Support Your Business Objectives
and CI Strategy
In a business context, a communications strategy for CI serves as a:
• Decision-Making Tool – supports management’s decision making; allows for
efficient use of resources
• Risk Management Tool – promotes information flow and transparency to
manage risks and leverage opportunities
• Branding Tool – disseminates CI successes and achievements to enhance
public reputation
Measure and Communicate for Strategic Advantage 109
It is with these purposes in mind that internal and external communications goals
related to CI should be set:
• How can communications support your CI-related business objectives (such as
acquiring a social license to operate, enhancing reputation, or meeting global
industry standards)?
• How can communications support your internal objectives (securing support
and resources for CI from management and shareholders; or promoting
understanding and buy-in of CI strategy across the company)?
Based on these considerations, decide what to communicate.
99 Assess the Communications Context
Much like the CI program itself, communications does not happen in a vacuum.
Understanding the local and international contexts in which a company operates,
such as historical legacies or global campaigns targeting a certain industry (e.g.,
gold mining or oil palm), are critical in defining an effective communications
strategy. Telling a good story is often not enough—companies need to know who
they are talking to, how, and in which moment in time. Think about:
• Main challenges to which the communications strategy should respond. What
are the issues or perceptions that may need changing?
• National/local context for the project and key messages
• Public opinion
• International context (e.g., global campaigns)
• Key stakeholders and audiences
• National and regional opinion makers/commentators
• International stakeholders/influencers
99 Set Up a Communications Function to Support your Community
Investment Team
Ideally, a company will have established a communications function distinct from
its CI team (although the two should work closely together). The rationale is that
communications is a distinct skills set that goes beyond engaging with communities
at the local level to target a much broader group of stakeholders (including the
media, international NGOs, and investors). Necessary steps include:
• Assessing technical capacity (internal and external communications skills and
resources)
• Training communications personnel in CI-related matters
• Drawing up a communications budget
110 Measure and Communicate for Strategic Advantage
99 Identify Target Audiences and Tailor Key Messages
Following an analysis of the local context, agreement on the communications
objectives for CI, and an assessment of capabilities, a company is ready to strategize
on how best to achieve its communications goals. Who are the company’s target
audiences? What are the key messages? How should the messages and information
be tailored to meet the different needs and interests of each target group? How
can communications be used to create two-way dialogue and solicit feedback?
99 Develop Messages in Alignment with the CI Project Cycle
Companies may find it useful to think about their communications planning
in terms of each stage of the CI strategy process and to align communications
objectives and key messages accordingly.
• Early Engagement: Focus on managing expectations, setting the right tone
for collaboration and partnership, and clarifying the company’s vision and role
in supporting communities and local government in the development process.
• Planning Stages: Don’t stay silent during the planning period and allow
rumors, misinformation, and frustration to take root. Keep the momentum
going and counter long lead times before CI programs can show results by
actively communicating about aspects of the multi-stakeholder process for
designing the CI program itself. This can include the formation of committees,
the criteria for participation, the process for selecting representatives, the
identification of local partners, as well as anticipated timetables, schedules of
activities, and next steps.
• Setting the Parameters for CI: Communicate the company’s decision-
making process and rationale (i.e., “shared value” creation) for identifying and
selecting which investment areas it will support—and which it will not support
and why. Messages about sustainability, local ownership, and exit or handover
of CI projects should also be emphasized.
• Implementation Planning: Use communications to foster transparency, build trust,
and garner feedback on questions about delivery mechanisms, resource allocation,
decision-making processes, and governance structures for CI implementation.
• Results Measurement: Communications is most powerful at the stage when
a company’s CI program delivers tangible benefits that can be seen, felt, and
measured. At this stage, actively and repeatedly communicate CI outcomes to
key stakeholder groups at various levels in order to maximize the desired business
benefits from such investments (be it reduced social risk or enhanced reputation).
99 Determine Communications Tools and Channels
Following an analysis of the current situation, agreement on the communications
objectives, and an assessment of capabilities, companies need to establish how
they might be able to achieve their goals. Which tools and channels will be most
effective for conveying key messages? Identify:
• Communication channels
–– Media outlets (influential newspapers, radio, TV, Internet, opinion makers)
–– Community meetings
–– Government briefings
Measure and Communicate for Strategic Advantage 111
–– NGO interactions
–– Roundtables/conferences
–– Booklets/brochures (including company reports)
–– Public announcements
• Key spokespersons
• Key dates and events
99 Engage Partners Who Can Help Deliver and Reinforce Your Message
Many companies identify implementing partners to support their communications
efforts—for example, local organizations that can provide research, on-the-ground
networks, or unique communication vehicles (such as culturally appropriate meeting
styles, easy-to-understand flyers, radio programs for rural areas, etc.). This, along with
endorsements by third parties, partners, and/or influential persons or organizations, can
be an effective means to spread and amplify key messages and information about CI.
99 Plan for the Worst: Prepare a Crisis Communications Plan
Planning ahead enables a quick response when a crisis arises (e.g., accidents, major
complaints, or stakeholder-related disruptions). Such advance planning involves
setting chain-of-command channels, identifying company spokespersons, preparing
Q&As, and cultivating media contacts to disseminate immediate responses.
99 Measure the Success of Your Communications Strategy
Finally, how does a company assess whether its communications strategy for CI
has succeeded? In many cases, direct feedback and anecdotes will reveal whether
communications efforts have been effective. However, other sources may prove
useful as well:
• Results of public perception surveys
• Number of third-party endorsements
• Positive civil society/NGO feedback
• Positive tone of media coverage
• Level of political support
• Community grasp of CI-related processes and issues
• Level of management and/or investor support
112 Measure and Communicate for Strategic Advantage
Tools
Tools
Tools
• Tool 1: Template for Preparing a
Community Investment Strategy
• Tool 2: Template for Preparing a
Communications Plan
• Tool 3: Institutional Mapping
Questionnaire
• Tool 4: Social Network Analysis
• Tool 5: Risk and Opportunity Screen
• Tool 6: Capacity Assessment Methods
• Tool 7: McKinsey Capacity
Assessment Tool
• Tool 8: Exit/Handover Strategy
Template
• Tool 9: Turnaround Strategy Template
• Tool 10: Planning and Financial
Valuation Tool for
Sustainability Investments
Tools
Tool 1: Template for Preparing a
Community Investment Strategy
The scope and level of detail of the strategy should be scaled to fit the needs and
stage of the project (or company operations).
Introduction –– Brief project description: company operations, community context, and key social and environmental issues or impacts
Business Case –– Business rationale for supporting a CI program/anticipated business benefits
–– Key site-level issues, risks, and opportunities to be addressed through CI
Local Context –– Key findings of socioeconomic baseline assessment and stakeholder consultations
–– Stakeholder analysis
–– Key challenges and opportunities posed by the local context
–– Institutional mapping: institutions, organizations, and potential partners
–– Key government development priorities and plans
Community –– Process, mechanisms, and timetable for multi-stakeholder engagement on CI
Engagement and –– Key phases, activities, and timeline for community planning and input into CI priorities and strategy
Planning –– Key results from activities that assessed and ranked local development priorities
Objectives, –– Goals and objectives of CI Strategy (linked to the business case and SMART*)
Guiding Principles, –– Guiding principles, eligibility criteria, and selection criteria
and Criteria
Focus Areas –– Process and criteria (e.g., “screens”) used to select areas for company investment
for CI –– Key focus areas selected for CI (and supporting rationale for each)
–– Typology of investments and allocation (short term versus long term)
Company Core –– Ways in which company can leverage its assets, resources, and unique role in support of CI focus areas (e.g., staff,
Competencies expertise, facilities, equipment, contacts, advocacy, etc.)
and Resources
Sustainability, –– Proposed criteria/measures to avoid creating dependency and to ensure that programs can become self-sustaining once
Handover, and the company reduces or withdraws its support
Exit Strategy –– Strategy and timeline for decreasing company support and building local self-sufficiency for both management and
financing of projects and programs
Implementation –– Proposed delivery model(s) or structures (and rationale for selection)
Planning –– Potential partners
–– Roles and responsibilities
–– Implementation schedule
–– Governance structure and composition (to ensure multi-stakeholder representation and decision making)
Internal –– Coordination of CI with other company policies/programs affecting communities
Coordination –– Mechanisms for coordination among units interacting with local stakeholders
and Alignment –– Cross-functional roles/accountabilities for units interacting with local stakeholders
Capacity –– Company readiness (management support, internal preparedness/skills to engage)
Building –– Capacity building needs identified (i.e., target groups/skills needed)
–– Capacity building activities undertaken to date
Staffing and –– Staffing resources to support CI (coordination, oversight, management)
Budget –– Budget assumptions and main sources of financing (including any plans for external funding, and arrangements to secure
long-term financial sustainability)
–– CI Budget (multi-year) and contingencies
Results –– Monitoring and evaluation activities to be undertaken
Measurement –– Participatory methods/mechanisms to be used
–– Key indicators to be tracked (including business benefits) and baseline data required
–– Resource and budget requirements
Communications –– Internal and external communications plans
–– Timetable, target audiences, communication channels to be used
* Specific, Measurable, Attributable, Results-oriented, and Timebound
Tool 1: Template for Preparing a Community Investment Strategy 115
Tool 2: Template for Preparing a
Communications Plan
The following template provides a suggested structure for the preparation of a
communications plan to support a company’s community investment strategy. The
scope and level of detail of the communications plan may be scaled to fit the needs
and stage of the project (or company operations).
Strategic communications is the use of internal and external outreach tools to achieve
measurable outcomes in support of business objectives. A good communications strategy:
• Identifies key internal and external audiences
• Connects the company to its stakeholders and customers
• Defines and delivers specific messages that will resonate with target audiences
• Is designed to reach measurable results
• Follows a long-term plan of action
Local Context • Key challenges of the local, national, and international contexts to which the communications strategy should
Challenges/Constraints respond (e.g., local opinions, historical legacies, or global campaigns against the industry)
Key Audiences and • Key stakeholder groups that have an interest in and/or need to be informed/influenced by the communication
their Informational activities
Needs • Stakeholder analysis: a) internal and external audiences; b) primary, secondary, and influential/high value (e.g., political
decision makers and local opinion leaders) target groups
• Main informational needs of the target audiences (aligned with the CI program cycle)
Goals and Objectives • Overall goal of the communications plan in light of context, challenges, opportunities, and audience needs (linked
of Communications with the company’s overall business objectives)
Plan • External (e.g., strengthen social license to operate) and internal (e.g., create buy-in) objectives of the communications
strategy
Key Messages • Key messages and tone of the key messages (e.g., factual and visual information that resonates with target
audiences)
External and Internal • Existing internal and external communication channels
Communications • Channels that allow two-way communication
Channels • Most suitable channels (by stakeholder group) to communicate the key messages (e.g., rural radio, influential
papers in the area, opinion makers/commentators)
Key Activities and • Dates/events for planned communication activities
Timetable • Dates/events that communication activities need to be coordinated with
• Activities to support long-term communications strategy (e.g., maintaining and monitoring a Web site,
maintaining good press relations)
• Risks/constraints that could affect the delivery of the communication activities (e.g., authorizations and
scheduling requirements, endorsements from other parties) and mitigation measures
116 Tool 2: Template for Preparing a Communications Plan
Crisis Response • Crisis communications team (e.g., senior executive, legal counsel, project manager, communications person)
• Designated company spokespersons in a crisis situation
• Media contacts for disseminating responses without delay
• Communication protocols (e.g., emergency communications “tree”)
• Written scripts for questions and answers about the company’s programs along with other communication
materials
Resources and Staffing • Staffing resources to support communications function
• Budget/resources to carry out planned communication activities (e.g., preparation and production of
communication materials, translation services, advertising costs, delivery of events)
• Opportunities to attract external partners/sponsors around planned communication activities
Key Spokespersons/ • Key spokespersons and designated backups
External Partners • Main media contacts
• Implementing partners/local organizations whose research, on-the-ground networks, and unique communications
vehicles can be leveraged
Success Measurement • Key indicators to monitor progress vis-à-vis the expected results:
–– Public perceptions (positive/negative)
–– Number of third-party endorsements
–– Level of community buy-in for CI (increasing/decreasing)
–– Nature of civil society/NGO feedback
–– Tone of media coverage (positive/negative)
–– Level of political support (increasing/decreasing)
–– Operational statistics (e.g., reduced number of production interruptions due to local unrest)
• Measures to ensure that performance information is used to adjust the communications plan (messages, tactics,
tools, and resources) as needed
Tool 2: Template for Preparing a Communications Plan 117
Tool 3: Institutional Mapping Questionnaire
The following guidance is part of the RuralInvest Toolkit developed by the Food and
Agriculture Organization (FAO) of the United Nations for preparing successful rural
development projects—in terms of both income generation and social investment. The
toolkit comprises training courses, manuals, and custom-developed software which are
applicable for any agency, project, organization, or private investor managing funds for
small and medium-scale agricultural and rural investments.*
The institutional mapping activities given below can be used when undertaking local
context analysis for the purpose of identifying community groups, development
institutions, local organizations and/or other potential partners. (See Chapter 3).
Mapping Interest Groups
These groups may include: work groups, youth clubs, cooperatives, agricultural
worker associations, women’s organizations, parents’ associations, religious
organizations, saving and loan associations, irrigation boards, local development
committees, etc. The objective of the institutional mapping is to discover roles and
activities of these various groups.
Products that can be obtained:
• Brief information on interest groups existing in the communities
• A map or sketch showing the spatial distribution of the various interest groups
that operate in the communities
• A register of these various groups for the purpose of future planning
Useful questions:
• What are the interest or activity groups that operate in the community?
• What other organizations are there in the zone? What are their relations with
the community?
• How many members do they have?
• What are their aims?
• What activities do they undertake?
• How do they relate to other local stakeholders and/or the communities?
• What are the relations like between these organizations and the community?
• Are there any conflicts between the community and interest groups in the
zone? If there are, what is the cause? How can these conflicts be overcome?
* www.fao.org/tc/tci/ourrole/ruralinvest/it/
118 Tool 3: Institutional Mapping Questionnaire
Sample Format: Interest Groups in the Community
Organization and Activities carried out Role or function in Number of members
date established local development within the area
Mapping Development Institutions
Development institutions include public development institutions, private entities, and
NGOs. The main objective of the institutional mapping is to identify the activities these
organizations undertake (or have undertaken), the policy and development approach
adopted by them and, on the basis of this information, to identify their potential
contribution to the objectives and targets of the project or program under consideration.
Products that can be obtained:
• Summary of the development institutions that work in the zone, by sector
• A table or drawing to show what development institutions do, and the type of
relationship they maintain with the community
• A record of development institutions that work in the zone, for the purpose of
defining their role/function in local development
Useful questions:
• What public (state) institutions, local governments, private firms, and NGOs
have a significant presence in the communities?
• In which sectors do each of these institutions operate and what concrete
activities have they carried out or are they currently carrying out?
• What do the officials of each of these institutions think of the organizations
participating in decision making in the projects and programs that they execute?
• How do members of the community rate the work of these institutions?
Sample Format: Development Institutions
Institution What activities does Who does it work Level of participation
it carry out? with? in decision making
Tool 3: Institutional Mapping Questionnaire 119
Mapping Management Capacity of Local Organizations
Where needed, institutional mapping may also explore questions around expertise
and capacity of local organizations that operate in the area. The objective of this
exercise is to find out whether local organizations require strengthening and, if so,
in what areas.
Products that can be obtained:
• Identification of the areas of training and technical assistance required by
different entities and local institutions
• Summary of the social capital and/or the management capacity of local
communities and organizations
Useful questions:
• What local organizations are there? Do they have legal status? Do they have
different functions?
• If there are several local organizations, are there tensions or conflicts among them?
• Do members of the community or organization(s) help finance the
organization’s activities?
• How frequently do their boards of directors meet?
• Are minutes kept of assemblies and meetings?
• Are balance sheets prepared and accounting records kept?
• Are such records manual or computerized?
• Are external audits performed?
• When and at what event was the current board of directors appointed?
• How and with what mechanisms do grassroots members assess their leaders’
performance?
• How often is community work done? Who participates in community work?
• What tasks are carried out collectively and free of charge?
• Do organizations and their communities have experience in managing
development projects?
• How are important decisions affecting all organization members taken?
• What mechanisms do community members have to supervise the work of
their leaders?
120 Tool 3: Institutional Mapping Questionnaire
Tool 4: Social Network Analysis
Social Network Analysis (SNA) is useful for visualizing patterns of engagement
between diverse local stakeholders and understanding how to use these
relationships to further a company’s CI objectives. Although it is enhanced by the
use of special software, one can get started without SNA software. SNA involves
the following three stages:
1. Participant Survey – A survey tool is developed by facilitators, often in
collaboration with participants. The survey includes questions about the flows
of information, resources and collaboration that are important to the local
community.
2. Data Analysis – The results of the SNA survey are tabulated in Excel or input
into a network analysis software application (such as InFlow or UCINet).* These
free or inexpensive applications have built-in algorithms that generate network
maps, positioning organizations or individuals according to their connections
with others.
3. Participatory Feedback – Stakeholder maps and metrics are used to facilitate
discussions between the company and community members. The questions
generated by analyzing the SNA results can help to draw out extremely
valuable observations about key actors, alternative ways to optimize the
“development supply chains,” and fresh insights into power brokers that hold
significant influence over the working environment.
SNA maps and metrics are particularly effective when used in combination with
stakeholder dialogue, and can help project planners to identify key connectors,
community resource hubs, gatekeepers and brokers, who are described below.
Example of a Social Network Analysis (SNA) map
Company
Other
business6 Other
business1
International NGO
Local CBO1 Local NGO
Gov6 Local
Local NGO1 CBO
Local Gov1 Other Business
Gov5
CBO2
Other Local Government
business5
International Connector
NGO1
Resource Hub
Company
Other Gatekeeper
business4 Local CBO3
Gov4 International
NGO2
Local
Gov3 Local Local
Gov2 NGO2
Local
NGO3 Other
Other business2 CBO4
business3
CBO5
* http://www.orgnet.com/inflow3.html (InFlow) or http://www.analytictech.com/ucinet/ (UCINET)
Tool 4: Social Network Analysis 121
Connectors are actors in a community who know large numbers of people and
who are in the habit of making introductions. Tap them early in the CI process to
get a complete 360 perspective. But never rely on a single voice. If the CI involves
an explicit networking component, then connectors are well placed to play a
leading role. Build them into your outreach plan.
Resource Hubs are individuals or organizations that provide programmatic
resources—funding, supplies, training, or intellectual capital—to local NGOs
and frontline community-based organizations that work directly with affected
individuals and communities. Community-based resources may present themselves
in surprising ways, such as family-owned small businesses, local law and accounting
firms, and local consultants. Many of them may be wary of external investors and
corporations and initially keep a low profile.
Gatekeepers or Brokers are organizations and individuals that act as a bridge
between different constituencies, assisting or potentially hindering information flow
between sectors or regions. While connectors tend to “know everyone,” brokers
often know “the right people.” Connectors hold an extremely important position
in any new initiative and should be considered during the planning and project
start-up phases. Through SNA, brokers can be identified who can help build bridges
between key project constituencies, including local government, government
ministries, and special interest groups.
122 Tool 4: Social Network Analysis
Tool 5: Risk and Opportunity Screen
As discussed in Chapter 6, it is not uncommon for companies to face high
expectations for support and long lists of development needs and priorities from
local stakeholders. In such a context, exercising selectivity and strategic focus
regarding which activities to support becomes particularly important.
One way to prioritize among the numerous development issues and needs raised by
local stakeholders is by vetting them through the twin lenses of risk and opportunity.
(For other common “screens,” see the sample screening process outlined in Chapter
6). Risk and opportunity screening can be a useful decision-making tool that involves:
(i) the identification of risks and opportunities associated with each community
priority area/issue; and, (ii) the evaluation and ranking of each identified risk or
opportunity to determine potential priority areas for CI.
Community Issues
• Community center • Support for • Jobs After mapping
livelihoods
• Scholarships • HIV/AIDS potential risks and
High • Enterprise opportunities, the
• Training for women development • Low skilled youth company chose to
• Access to water invest in the areas
Level of Opportunity
circled
• Ecotourism • Upgrading of temples • Protection of fishing and
farming livelihoods
• Preservation of • Primary education High Priority
Med. heritage sites • Capacity building of
• Malaria traditional authorities Medium Priority
Low Priority
• Cultural activities • Electrification • Crime and security
• Transportation • Support to dairy • Corruption
Low producers
Low Med. High
Level of Risk
Identification of Risks and Opportunities
Community engagement and planning processes typically reveal a set of
development issues or areas that are important to local stakeholders. Using this as a
starting point, map each issue against:
• the level of risk to the company (of not addressing this issue)
• the level of opportunity presented to address this issue (i.e., achievability in
terms of ease of execution and likelihood of success)
Level of Risk Level of
Community (High, Medium, Opportunity (High,
Issues Nature of Risk Nature of Opportunity or Low) Medium, or Low)
Prevalence of HIV/ The local incidence of HIV/AIDS The company can partner to support High Medium
AIDS in the local could constitute a risk to the the delivery of HIV/AIDS awareness,
area of operations company’s workforce, affecting prevention, and treatment programs
productivity, costs, and morale. for employees and local communities
High rates of High expectations for jobs combined Early phase investment in skills High High
unemployment/ with low levels of education and skills training and entrepreneurship
lack of jobs within local communities could fuel programs can increase the income-
frustration and anti-company sentiment earning prospects of local residents
Tool 5: Risk and Opportunity Screen 123
How to Rank Risks and Opportunities
For each identified risk, the company should assign a rating of high/medium/low.
For consistency of ranking, it is important to establish a common definition of what
high/medium/low ratings mean. Factors to consider include:
• How great of a risk is posed to the company by this issue (whether it be in
terms of project delays and disruptions, social license, or reputation)?
• Is the issue considered high priority by a majority of local stakeholders or a
select minority?
• What is the probability or likelihood of a “risk event” should the need or issue
not be addressed?
• Has the issue received NGO or media attention?
To rate the level of opportunity presented by each issue, assess according to potential
“achievability”—that is, how easy it would be to execute through the company’s CI
program. Assign a rating of high/medium/low. As with the risk rating, common criteria
and definitions of ratings are needed. To determine the level of achievability, consider:
• Are there potential partner organizations with sufficient expertise and
implementation capacity?
• Is the issue supported by government and included in local/regional/national
development plans?
• What is the estimated cost of the intervention?
• How practical and/or easy is the activity to execute (i.e., can it be done readily
by the company or a third-party)?
• What is the potential for impact (i.e., ability of the intervention to result in
broad-based benefits)?
High Medium Low
Level of • Easy to address through the CI • Can be addressed through the CI • May be addressed through CI, but difficult to
Achievability program program, but may be difficult to execute
(capital) • Partner organization is available execute • Major costs would be required relative to benefit
to implement • Cost of intervention is reasonable or • The likelihood of high development impact is
• Capacity to implement is on the slightly higher side relative not certain, or is too costly to achieve, or may be
sufficient to benefit influenced by other factors beyond the scope of
• Cost of intervention is • Development impact is still likely to the company to address
reasonable relative to benefit be relatively high
• Intervention is likely to achieve a
high development impact
It is also possible that some issues on the list should not be addressed through
CI (for example, areas that fall into management of or compensation for project
impacts, or are best addressed by government). These issues should be flagged as
such and excluded from final consideration.
As the final step, the combination of the initial risk rating plus the achievability
rating will help determine whether or not the issue should be prioritized for
company support through CI.
124 Tool 5: Risk and Opportunity Screen
Tool 6: Examples of Tools and Methods for
Organizational Capacity Assessment*
Name of the Tool/ Description
Methodology
Effective Known as the McKinsey Capacity Assessment Grid, this tool is designed to help nonprofit organizations assess their
Capacity organizational capacity. The tool includes a description of seven elements of organizational capacity and their components.
Assessment Each variable of the grid is scored on a scale of 1 to 4.
for Nonprofit Pros and Cons: A clearly described, comprehensive capacity assessment tool. It is user friendly and can be easily adapted
Organizations for use in different types of organizations.
(McKinsey and
Company) Web site: www.emcf.org/pdf/mckinsey_capacitytool.pdf
Capacity This is a brief questionnaire to assess the capacity of an NGO or partner organization. The assessment includes
Assessment Tool governance, management and financial practices, service delivery, organizational mission, and sustainability.
(CARE Somalia) Pros and Cons: A short, simple checklist and rating format supplemented by a rating scale.
Web site: www.careinternational.org.uk/download.php?id=39
Capacity Results The Capacity Results Framework is a tool to facilitate strategic thinking on capacity issues. The framework looks at the
Framework (World three levels of capacity—individual, organizational, and institutional—and identifies current and desired levels of capacity.
Bank Institute) The assessment findings are used to define interventions to address gaps and to define indicators that can be jointly
monitored with stakeholders.
Pros and Cons: This briefing paper provides a useful framework for thinking about capacity development. It does not,
however, provide user guidance or details on how to adapt the framework to different contexts.
Web site: http://siteresources.worldbank.org/INTCDRC/Resources/CapacityBriefNo14.pdf
Capacity This is a set of tools that include a Capacity Assessment Practice Note and a User’s Guide. UNDP’s Capacity Assessment
Assessment Framework provides a comprehensive view of the issues that could be addressed in capacity assessment. The assessment
Framework process allows the user to develop a comprehensive work plan that specifies future capacities to be developed, strategies
(UNDP) and interventions to be used, specific targets and indicators, and cost estimates.
Pros and Cons: The framework is interactive and very thorough. While the guidance is flexible enough to be used in
different contexts, the use of these materials is likely to require time and adaptation to the specific context—and some
advance work and planning.
Web site: www.undp.org/capacity/
Participatory This is an organizational capacity assessment tool to assess capacity and levels of consensus in organizations against
Organizational seven areas (human resource management, financial resource management, equitable participation, sustainability of
Evaluation Tool program benefits, partnerships, learning, and strategic management). The methodology involves bringing participants
(UNDP) together in cross-functional, cross-hierarchical groups for open exchange to identify divergent viewpoints to foster growth;
to create consensus around future organizational capacity development activities; and to select, implement, and track
organizational change and development strategies.
Pros and Cons: This self-assessment/group discussion approach is highly participatory. At the same time, it is relatively
time consuming and the potential flaws and risks of self-assessment need to be managed.
Web site: www.comminit.com/pdf/POET_UsersManual.pdf
Organizational This tool guides an organization through a capacity self-assessment based on a suggested ranking scale, and covers
Capacity Self- different stages of organizational functioning and management. As the end result, the tool provides an organization with
Assessment capacity development priorities and a training plan.
(Academy for Pros and Cons: The tool is simple to use, can be adapted to different contexts, and can be completed relatively quickly.
Educational By design, however, this tool requires a knowledge facilitator to lead the discussion and assessment process. Flaws and
Development) risks related to the process of self-assessment need to be managed.
Web site: www.aed-ccsg.org/resources/tools/IDAssess.doc
* Sources for this table:
A Brief Review of 20 Tools to Assess Capacity, UNDP, 2005, www.unpei.org/PDF/institutioncapacity/Brief-Review-20-Tools-to-Assess.pdf
Capacity Assessment Tools, Methodologies, Resources, Capacity For Disaster Reduction Initiative, www.unisdr.org/cadri/documents/
CAPACITY_ASSESSMENT_TOOLS_FINAL.pdf
Tool 6: Examples of Tools and Methods for Organizational Capacity Assessment 125
Tool 7: McKinsey Capacity Assessment Tool
The Sample Organizational Capacity Assessment below is an extract from the
McKinsey Capacity Assessment Tool.* As presented below, the template can be
used by a company to assess the capacity of potential partners and/or as an input
when developing a company’s capacity building plan (see Chapter 5 for more
details). The company can also develop its own assessment based on the full
description of the tool and the related capacity framework.
Capacity Ranking
Components (Interpret the text loosely; keep in mind that you are trying to score
the organization on a continuum of “1” to “4.”)
Clear need for Basic level of Moderate level of High level of
increased capacity capacity in place capacity in place capacity in place
Overall strategy • Strategy is either • Strategy exists, but is • Coherent strategy has • Organization has clear,
nonexistent, unclear, or either not clearly linked been developed and is coherent medium- to long-
incoherent (largely set of to mission, vision, and linked to mission and term strategy that is both
scattered initiatives) overarching goals, lacks vision, but is not fully actionable and linked to
• Strategy has no influence coherence, or is not easily ready to be acted upon overall mission, vision, and
over day-to-day behavior actionable • Strategy is mostly known overarching goals
• Strategy is not broadly and day-to-day behavior is • Strategy is broadly known
known and has limited partly driven by it and consistently helps
influence over day-to-day drive day-to-day behavior
behavior at all levels of organization
Goals/ • Targets are nonexistent • Realistic targets exist in • Quantified, aggressive • Limited set of quantified,
performance or few some key areas targets in most areas genuinely demanding
targets • Targets are vague, or • Targets are mostly aligned • Targets linked to performance targets in
confusing, or either too with aspirations and aspirations and strategy all areas
easy or impossible to strategy and mainly focused on • Targets are tightly linked
achieve • Targets may lack “outputs/outcomes” with to aspirations and strategy,
• Targets are not clearly aggressiveness, or be short some “inputs” output/outcome-focused,
linked to aspirations and term, lack milestones, • Typically multiyear have annual milestones,
strategy, and may change be mostly focused on targets, though may lack and are long term
from year to year “inputs,” or are often milestones • Staff consistently adopts
• Targets largely unknown or renegotiated • Targets are known and targets and works
ignored by staff • Staff may or may not know adopted by most staff diligently to achieve them
and adopt targets
Funding model • Organization highly • Organization has access • Solid base of funders in • Diversified funding across
dependent on a few to multiple types of most types of funding multiple source types
funders, largely of same funding (e.g., government, sources • Organization insulated
type (e.g., government or foundations, corporations) • Organization has from potential market
foundations) with only a few funders developed some instabilities (e.g., fully
in each type, or has many sustainable revenue- developed endowment)
funders within only one or generating activity and/or has developed
two types of funders sustainable revenue-
generating activities
Performance • Very limited measurement • Performance partially • Performance measured • Well-developed and
measurement and tracking of measured and progress and progress tracked in integrated system (e.g.,
performance partially tracked multiple ways, several balanced scorecard) used
times a year for measuring organization’s
performance and progress
on continual basis
* Accessible at www.vppartners.org/learning/reports/capacity/capacity.html
126 Tool 7: McKinsey Capacity Assessment Tool
Capacity Ranking
Components (Interpret the text loosely; keep in mind that you are trying to score
the organization on a continuum of “1” to “4.”)
Clear need for Basic level of Moderate level of High level of
increased capacity capacity in place capacity in place capacity in place
Fundraising • Generally weak fundraising • Main fundraising • Regular fundraising • Highly developed internal
skills and lack of expertise needs covered by some • Needs adequately covered fundraising skills and
(either internal or access to combination of internal by well-developed internal expertise in all funding
external expertise) skills and expertise, and fundraising skills source types to cover all
access to some external • Occasional access to regular needs
fundraising expertise some external fundraising • Access to external
expertise expertise for additional
extraordinary needs
Partnerships • Limited use of partnerships • Early stages of building • Effectively built and • Built, leveraged, and
and alliances and alliances with public relationships and leveraged some key maintained strong, high-
development sector, nonprofit, or for- collaborating with other relationships with a few impact relationships with
and nurturing profit entities for-profit, nonprofit, or types of relevant parties; variety of relevant parties
public sector entities some relations may be • Relationships deeply
precarious or not fully anchored in stable, long-
“win-win” term, mutually beneficial
collaboration
Local • Organization’s presence • Organization’s presence • Organization reasonably • Organization widely
community either not recognized or somewhat recognized, well known within known within the
presence and generally not regarded and generally regarded the community, and community, and perceived
involvement as positive; few members as positive within the perceived as open and as actively engaged with
of local community community; some responsive to community and extremely responsive
constructively involved in members of the community needs; members of the to it; many members of
the organization constructively engaged community (including the community (including
with the organization a few prominent ones) many prominent members)
constructively involved in actively and constructively
the organization involved in the
organization (e.g., board,
fundraising)
Organizational • Limited set of processes • Basic set of processes in • Solid, well-designed set of • Robust, lean, and well-
processes use (e.g., decision making, core areas processes in place in core designed set of processes
and planning, reviews) • Processes known, used, areas (e.g., decision making,
development • Use of processes is and truly accepted by only • Processes known and planning, reviews) in place
variable, or processes portion of staff accepted by many, often in all areas
are seen as ad hoc • Limited monitoring and used • Processes widely known,
requirements assessment of processes, • Occasional monitoring and used, and accepted
• No monitoring or with few improvements assessment of processes, • Continual monitoring
assessment of processes made some improvements made and assessment of
processes, and systematic
improvements made
Staffing levels • Many positions are • Most critical positions are • Positions are almost all • Positions are all fully
unfilled, inadequately staffed (no vacancies), staffed (no vacancies); few staffed (no vacancies); no
filled, or experience high and/or experience limited turnover or attendance turnover or attendance
turnover and/or poor turnover or attendance problems problems
attendance problems
Staff • Staff drawn from a narrow • Some variety of staff • Staff drawn from diverse • Staff drawn from very
range of backgrounds and backgrounds and backgrounds and diverse backgrounds and
experiences; interest and experiences experiences, and bring a experiences, and bring a
abilities limited to present • Good capabilities, broad range of skills broad range of skills
job; little ability to solve including some ability to • Most are highly capable • Most staff are highly
problems as they arise solve problems as they and committed to mission capable in multiple roles,
arise and strategy; eager to committed both to mission
develop and assume and continuous learning
increased responsibility • Most are eager and able
to take on special projects
and collaborate
Tool 7: McKinsey Capacity Assessment Tool 127
Capacity Ranking
Components (Interpret the text loosely; keep in mind that you are trying to score
the organization on a continuum of “1” to “4.”)
Clear need for Basic level of Moderate level of High level of
increased capacity capacity in place capacity in place capacity in place
Decision- • Decisions made largely on • Appropriate decision • Clear, formal lines/
• Clear, largely formal lines/
making an ad hoc basis by one makers known; decision- systems for decision systems for decision
framework person and/or whomever is making process fairly well making, but decisions are making that involve as
accessible; highly informal established and process not always appropriately broad participation as
is generally followed, but implemented or followed practical and appropriate
often breaks down and along with dissemination/
becomes informal interpretation of decision
Physical and • Inadequate physical • Adequate physical • Fully adequate physical • Physical and technological
technological and technological and technological and technological infrastructure well tailored
infrastructure* infrastructure, resulting in infrastructure that can infrastructure for the to organization’s current
loss of effectiveness and meet organization’s most current organizational and and anticipated future
efficiency (e.g., insufficient important needs (e.g., communication needs needs
workspace, limited number basic telephone and fax • Solid hardware and • Well designed and
of telephone facilities) facilities accessible to most software; high usage of IT thought out to enhance
• Limited/no use of staff) by staff organization’s efficiency
computers or other • Equipment sharing is • Infrastructure does not and effectiveness
technology in day-to-day common; satisfactory use impede effectiveness and • Reliable telephone and
activity of IT infrastructure efficiency fax facilities accessible by
• A number of improvements all staff
could help increase • Networked computing
effectiveness and efficiency hardware with up-to-date
(e.g., individual voicemails, software applications used
individual desks) regularly by staff
* For the purposes of this capacity assessment template, physical and technological infrastructures have been merged into one.
McKinsey Capacity Grid looks at these dimensions separately.
128 Tool 7: McKinsey Capacity Assessment Tool
Tool 8: Exit/Handover Strategy Template
See Chapter 6 for further guidance on developing an exit or handover strategy
EXIT 1. What elements of the CI project need to be sustained? Check all options that apply.
STRATEGY —An activity or program —A benefit or benefit stream —An institution
CONCEPT —Funding —A service —Management capacity
Engage with —A facility or infrastructure —None (because the project will naturally phase out)
communities, 2. Is the company going to be providing initial management or financial support or both?
local —Yes —No
government, 3. Will financial support be a one-time allocation or ongoing? If ongoing, specify anticipated duration.
and other
—One-time allocation —Ongoing
partners up front
4. Could the benefits be maintained without continued support from the company?
to get their input
and buy-in. —Yes —No
5. If answer above is “no,” reconsider company support for the activity. (For existing activities, consider “turnaround” measures
to make them more sustainable). If answer above is “yes” describe how? Are there other stakeholders that could take over and
sustain this benefit stream/activity (e.g., through community payments for services delivered, by the government taking over the
project, by another mechanism)? With what resources?
6. What kind of training and capacity building and/ or resources are required for this stakeholder to be able to take over and
sustain this activity?
7. What timeframe is needed for successful handover?
OPTIONS 8. Based on the above, which of the following exit / handover strategy approaches are most appropriate? Check all options that apply.
—Phasing down over time:
• Company reduces activity level/financing level over time—may be in preparation for phasing out or transferring responsibility
• Special challenges include: timing; sensitizing target population; maintaining benefit stream; building capacity of
organization taking over responsibilities; viability of activity with reduced company support; managing reputational risks
—Transfer of responsibility (handover):
• Successor institution identified that will continue providing activity or service
• Company assists successor institution in securing needed resources and delivery or management capacity
• Special challenges include: timing and transition; capacity building; whether scope, scale and quality of activities can
continue; viability of handover; managing reputational risks to company if handover is unsuccessful
—Phasing out:
• Company discontinues support and involvement
• No new sponsor is identified (or needed) to continue the activity
• Special challenges include: impacts on target population; safety net considerations; reputational risks from abrupt or poorly
planned and managed exit
WORK PLAN 9. Summarize the details of the approach(es) you have selected. This may include:
• Identifying, where possible, viable successor organization(s)
• Key activities and milestones
• Timetable (phasing if necessary)
• Training/capacity building/mentoring (technical, management, financial, reporting, fundraising, etc.)
• Equipment (if necessary)
• Financing (if additional external financial support is required)
• Community consultation/involvement during exit process
• Managing the special challenges (see #10)
• Identifying key milestones and indicators for the transition/exit (see #11)
The above will be more accurate if a successor organization has already been identified, which, ideally, will be the case.
MANAGING 10. Describe how the special challenges and risks (listed in #8) associated with the exit option(s) selected will be addressed.
RISKS Include this in the work plan.
MONITORING 11. Describe how “degree of readiness” for the exit or handover will be tracked and assessed? Provide relevant indicators. The amount
of time, advance preparation, and capacity building required to ensure a viable transition/exit is almost always underestimated. Setting
key milestones and targets for handover is advisable for tracking progress and enabling mid-course adjustments where needed.
Readiness indicators should include targets and be aligned with the exit strategy work plan. Examples include:
• Financial indicators that measure the extent to which the necessary financial resources are in place at predetermined time intervals
(e.g., by year X, the successor organization will have secured contributions from external actors in the amount of Y)
• Organizational capacity indicators that measure the progress in building capacity of partners to manage/take over the project
activities after the company’s exit/handover
• Activity indicators that measure the progress in delivering certain activities (e.g., training, development of partnerships,
external fundraising) that are part of the exit strategy work plan
Tool 8: Exit/Handover Strategy Template 129
Tool 9: Turnaround Strategy Template
See Chapter 6 for further guidance on developing a turnaround strategy for
unstrategic and/or unsustainable CI activities
PROBLEM ANALYSIS 1. What are the problems facing the existing CI program? Check all options that apply.
—projects are not sustainable if company withdraws
—projects are not aligned with (new) CI strategy / do not support business objectives
—lack of sufficient community involvement and ownership
—gap between stakeholder expectations and CI results
—lack of capacity of implementing parties (internal/external)
—creation of dependency relationship
—ad hoc collection of different projects with lack of clear focus or impact
—projects are not aligned with the company’s core competencies
—projects are not demonstrating value vis-à-vis time and resources invested
—external factors (e.g., project impacts, government change, local conflict, etc.)
—other (please specify )
NEW CI STRATEGY: 2. Summarize key aspects of the company’s new CI Strategy (objectives linked to the business case, guiding
OBJECTIVES, GUIDING principles, eligibility criteria, alignment with core competencies) using the process set out in this guidance.
PRINCIPLES & CRITERIA
ASSESS AND 3. Assess current CI portfolio in light of strategy set out in #2. Sort projects into three categories (and associated
CATEGORIZE CURRENT sub-categories) based on their relevance to new CI objectives and principles.
PORTFOLIO OF CI
PROJECTS Green = high relevance to new strategy
—Retain
Yellow = possible relevance to new strategy
—Can be continued, with redesign, to meet new strategy objectives
—Objective remains relevant but implementation needs to be revisited
(e.g., project implementation needs to be transferred to a competent
local partner)
Red = not relevant to new strategy
—Stop immediately (e.g., activity is having negative effects or wasting significant resources)
—Use phased approach to ceasing activity
—Use phased approach to cease activity but replace with alternative
(e.g., donation program that is very popular with the community but
creating dependency/not aligned with new priorities. If stopped,
needs to be replaced with another program delivering benefits but in a
more sustainable manner and in consultation with local stakeholders.)
WORKPLAN FOR 4. Develop a Turnaround Plan. Suggested components include:
TURNAROUND • Assessment of existing activities - consider each existing project separately in terms of how it needs to be
Effective engagement addressed, while keeping track of the CI program’s direction as a whole
of internal and external • Engagement with external stakeholders to create local buy-in to the redesign process (e.g., be transparent and
stakeholders in the redesign try to minimize any negative impacts on local communities)
process to gain their • Engagement with internal stakeholders to create staff and management buy-in to the redesign process (e.g., be
understanding and support transparent and be prepared to “sell” the new program to senior management based on internal business case
will be critical to the success for the turnaround strategy)
of the turnaround.
Based on engagement process:
• Timeline for phasing out old projects and phasing in new ones (consider how best to do this with minimum
disruption)
• Identification of partners for existing, redesigned and/or new activities
• Capacity building program for partners and/or communities
• Transition process which prepares partners/successor organizations to take over and sustain existing programs in
the medium to long term, and to be ready to take on new ones.
MONITORING PROGRESS Define indicators to be used to monitor progress of the turnaround strategy.
Indicators can be used to • Status indicators (which measure program milestones and show progress against stated work plan objectives,
measure progress as well as targets, and timelines given in #4 )
end results. Interim results • Company-community relations indicators (which show how turnaround activities are perceived by key
can be used for redesign stakeholders and effect on local perceptions of the company )
purposes as necessary.
130 Tool 9: Turnaround Strategy Template
Tool 10: Planning and Financial Valuation
Tool for Sustainability Investments
The Planning and Financial Valuation Tool (FV Tool) helps a company to measure
the financial return of its sustainability programs and to establish the value of risk
mitigated through such activities. Specifically, it aims to answer three questions:
1. What is the optimal portfolio of sustainability investments for a given operation?
2. How large an economic return back to the company can be expected from
such a portfolio?
3. When is the ideal timeframe for making specific sustainability interventions?
The FV Tool can be used to assess the value of a company’s portfolio of CI programs
or to assess a broader spectrum of corporate investments in sustainability (e.g.,
biodiversity, workforce development, health, education, and so forth). Companies
can use this information to evaluate program effectiveness and to strategically
allocate financial resources to those programs with maximum positive impact for
both local communities and the business operation.
The FV Tool draws on a growing global database of CI programs from the collective
experiences of the extractives industry at the project or asset level (rather than the
company as a whole). The current version of the FV Tool is suited to oil, gas, and
mining projects; in the future, it will be adapted for other sectors.
How the Model Works
The Excel-based model* estimates the expected net present value of a specific project’s
sustainability investment portfolio over the lifespan of the project (i.e., mine or pipeline).
Company Risk Register
Telecom Primary Education Population Inflow After mapping
Electrification Local Industry Health Issues potential risks and
Community Support
Opportunity for Company to Have Impact
Development opportunities, the
High Land Footprint Water and Land company chose to
Biodiversity
invest in the areas
Access to Water
Workforce Skills circled
Ecotourism Carbon Intensity Transportation
Responsible Supply Impact on Residents Inflation High Priority
Chain Climate Events Housing
Med. Medium Priority
Low Priority
Impact on Agriculture Air Quality Impact on Marine-life
Ethnic Groups Freshwater Pollution
Unions Bauxite Residue
Low Tenure over Land
Corruption - Political
Stability
Resettlement
Low Med. High
Level of Risk to Company
* The model requires technical knowledge to set the input parameters. It is not a one-size-fits-all
approach; the model’s variables are configured per project.
Tool 10: Planning and Financial Valuation Tool for Sustainability Investments 131
The application of the tool includes the following steps:
1. Start with the asset/project’s existing financial model.
2. Draw on the company’s existing analysis of project stakeholders, risks, and
opportunities.
3. Conduct cost-benefit analyses of potential productivity gains from sustainability/
community investments, such as training to switch from expatriate labor to a
local labor force or an anti-malaria program that keeps the workforce and the
community healthier. This is referred to as “value creation.”
4. Analyze how much risk may be mitigated through such community investments
by costing out the potential savings by reducing the frequency and intensity
of negative events (i.e., delays in construction, disruptions in production, even
likelihood of expropriation—all of which may be affected by local stakeholders’
perceptions of the company). This is referred to as “value protection.”
5. Based on the “value creation” and “value protection” analyses, a Monte Carlo
simulation* is run to factor in randomness (not knowing if or when such costly
“risk” events might occur).
6. A range of probable net present value (NPV)** over the lifespan of the asset is the
output, broken down by the contributions of specific community investments.
Measure of the excess return (or Risk
Premium) per unit of risk in an investment
asset
FV TOOL OUTPUT
SUSTAINABILITY Switch Value Value Total SD/ Relative Sharpe Stand In % of Standard
ISSUE Creation Protection CR Added Share Ratio Alone Project deviation
NPV NPV Value Standard NPV in % of
Calculations Calculations (NPV) Deviations its Mean
Investment Initiatives
selected Workforce on 259,509 21,861 281,370 12.90% 4.25 66,282 62.49% 23.56%
through
Local Suppliers on 72,538 10,930 83,469 6.45% 2.89 29,644 18.54% 35.52%
risk register
process Health on 6,292 13,663 22,688 8.06% 0.55 36,200 5.04% 159.56%
Housing on 797 13,663 14,460 8.06% 0.40 36,187 3.21% 250.25%
Access to Water on -83 13,663 10,846 8.06% 0.38 36,187 2.41% 333.62%
Electrification on -83 8,198 13,579 4.84% 0.37 21,712 3.02% 159.89%
Legal on -525 10,930 7,672 6.45% 0.36 28,947 1.70% 377.28%
Primary on -1,144 13,663 23,449 8.06% 0.35 36,182 5.21% 154.30%
Education
Community on -3,438 24,594 10,225 14.25% 0.32 65,125 2.27% 636.90%
Development
Resettlement on -3,357 8,198 10,305 4.84% 0.22 21,701 2.29% 210.58%
Biodiversity on -6,909 16,396 6,754 9.68% 0.22 43,410 1.50% 642.73%
Food Supply on -42,741 13,663 -34,542 8.06% -0.80 36,178 -7.67% -104.73%
Total 280,583 169,426 450,279 100% 451,494
Figures in Indirect
Direct cash savings or Total value created and protected Standard deviation shows how much
US $ thousands savings
revenue to company over lifespan of project variation there is from the “average”
through
risk events mean
avoided
* Monte Carlo simulation methods (or Monte Carlo experiments) are a class of computational
algorithms that rely on repeated random sampling to compute their results. Monte Carlo methods
are useful for modeling phenomena with significant uncertainty in inputs, such as the calculation of
risk in business. (Source: Wikipedia)
** The net present value (NPV) of a time series of cash flows, both incoming and outgoing, is
defined as the sum of the present values (PVs) of the individual cash flows. NPV is a central tool in
discounted cash flow (DCF) analysis, and is a standard method for using the time value of money to
appraise long-term projects. (Source: Wikipedia)
132 Tool 10: Planning and Financial Valuation Tool for Sustainability Investments
The user can go through this exercise for two or more portfolios of sustainability
investments to learn which approaches are more likely to yield greater value to the
company over time.
EXAMPLE: Cost-Benefit Evaluation of Community Investment - Workforce
Cost Drivers Benefits Drivers
• Cost of baseline studies • Labor cost savings during construction and operations, derived from:
• Fully loaded annual salaries (average) –– Annual salary savings for foreign and expatriate worker
% Full-time employees –– % of labor force without sustainability objectives
–– Company staff (+ travel costs) (SCENARIO A) in construction and operations
–– Local human resources »» # Local
–– Average local salaries (blue and white collar) »» #Foreign
• Local literacy rate; # of adults to be trained »» #Expatriate
• Cost of training; # employees to be trained –– % of labor force with sustainability objectives (SCENARIO B)
–– Pre-employment training per employee
–– Vocational training per employee
–– Technical training (e.g., seconded employees)
–– Continuous training per employee (% of salary)
Inputs
Workforce
Cash Flow Basis
Phase Pre-Feasibility Feasibility Construction Operations (per year) Closure
Costs -1.487 -6.996 -2.059 -332 -501
Benefits 172.019 20.135
Direct NPV= $247,369K (over lifetime of the project)
Lessons to date:
• The FV Tool brings together different business units across the company
to mine employees’ judgment and expertise in the areas of corporate
responsibility, risk, finance, human resources, law, and asset management.
• The added rigor and embedded stakeholder engagement leads to greater local
development impact from a company’s investments.
• Early findings suggest that it may make good business sense for companies to
consider investing in communities earlier than is traditionally accepted.
Results:
The tool aims to incorporate sustainability investments into the core of a company’s
project planning process. This is not just an academic exercise; it fosters community
development through an incentive structure that is consistent with a company’s
bottom line.
Partners:
The FV Tool is being developed as a partnership comprising IFC, Rio Tinto Alcan,
Deloitte, and MIGA, with support from the Government of Norway. More
information is available at: www.commdev.org.
Tool 10: Planning and Financial Valuation Tool for Sustainability Investments 133
Useful References
General Toolkits/Resources
1. IFC CommDev (Oil, Gas, and Mining Sustainable Community Development
Fund), www.commdev.org
2. Getting it Right: Making Corporate-Community Relations Work, Zandvliet, L.,
and Anderson, M., CDA Collaborative Learning Projects, 2009
3. Creating Successful, Sustainable Social Investment, IPIECA (International
Petroleum Industry Environmental Conservation Association), 2008,
www.ipieca.org
4. Socio-Economic Assessment Toolbox (SEAT), Anglo American plc, 2003,
www.angloamerican.co.uk/aa/development/society/engagement/seat
5. RuralInvest Toolkit, Food and Agriculture Organization, 2006,
www.fao.org/tc/tci/ourrole/ruralinvest/en/
6. Community Development Toolkit, ESMAP (Energy Sector Management
Assistance Program), World Bank, and ICMM (International Council on Mining
and Metals), 2005,
www.icmm.com/page/629/community-development-toolkit
7. Investing in People: Sustaining Communities through Improved Business
Practice, A Community Development Resource Guide for Companies,
International Finance Corporation, 2000, www.ifc.org
8. The Effectiveness of World Bank Support for Community-Based and -Driven
Development, Independent Evaluation Group, World Bank, 2005,
http://go.worldbank.org/Y3UF0AM9T0
9. Good Practice Note: Addressing the Social Dimensions of Private Sector Projects,
Number 3, International Finance Corporation, 2003,
www.ifc.org/ifcext/enviro.nsf/AttachmentsByTitle/p_SocialGPN/$FILE/SocialGPN.pdf
10. Community Engagement and Development Handbook, Australian Government
Department of Industry, Tourism and Resources, 2006,
www.ret.gov.au/resources/Documents/LPSDP/LPSDP-CommunityEngagement.pdf
Business Context
1. Development Without Conflict: The Business Case for Community Consent,
World Resources Institute, 2007, www.wri.org
2. Briefing Note: A Systematic Approach to Project Social Risk & Opportunity
Management, Engineers Against Poverty,
www.engineersagainstpoverty.org/key_issues/social_risks.cfm
3. Briefing Note: Modifying Project Opportunities and Risk Analysis for Enhanced
Social Performance, Engineers Against Poverty and Overseas Development
Institute, www.odi.org.uk/resources/download/1420.pdf
4. Market Movers—Lessons from a Frontier of Innovation, International
Finance Corporation and SustainAbility, 2007, www.ifc.org/ifcext/enviro.nsf/
AttachmentsByTitle/p_MarketMovers/$FILE/Market+Movers_Final.pdf
135
Capacity Building
1. Capacity Development (web portal), UNDP, www.undp.org/capacity/
2. A Brief Review of 20 Tools to Assess Capacity, UNDP, 2005,
www.unpei.org/PDF/institutioncapacity/Brief-Review-20-Tools-to-Assess.pdf
3. Capacity Assessment Methodology Users Guide, Capacity Development Group,
Bureau for Development Policy, UNDP, 2008, http://content.undp.org/go/cms-
service/download/asset/?asset_id=1670219
4. Capacity Building for Local NGOs: A Guidance Manual for Good Practice,
Progressio, 2005, www.ciir.org/Templates/Internal.asp?NodeID=91674
5. Effective Capacity Building in Nonprofit Organizations, McKinsey & Company,
2001, www.vppartners.org/learning/reports/capacity/capacity.html
Communications
1. Global Reporting Initiative, www.globalreporting.org/home
2. Strategic Communication for Community-Driven Development (CDD): A
practical guide for project managers and communication practitioners (draft),
World Bank, 2004, www.commdev.org/files/1939_file_stratcomm_CDD.pdf
Conflict and Grievance Management
1. Addressing Grievances from Project-Affected Communities, International
Finance Corporation, 2009, www.ifc.org/ifcext/sustainability.nsf/
AttachmentsByTitle/p_GrievanceMechanisms/$FILE/IFC+Grievance+Mechanisms.pdf
2. A Guide to Designing and Implementing Grievance Mechanisms for
Development Projects, Office of the Compliance Advisor/Ombudsman,
International Finace Corporation, 2008,
www.cao-ombudsman.org/howwework/advisor/documents/implemgrieveng.pdf
3. Company-Led Approaches to Conflict Resolution in the Forest Sector, Wilson, E.,
The Forests Dialogue, 2009, www.iied.org/pubs/pdfs/G02510.pdf
4. Conflict-Sensitive Business Practice: Guidance for Extractive Industries,
International Alert, 2005, www.international-alert.org/pdfs/conflict_sensitive_
business_practice_all.pdf
5. Community Development and Local Conflict: A Resource Document for
Practitioners in the Extractive Sector (Draft), CommDev, 2008,
http://commdev.org/content/document/detail/1801/
6. Human Rights in the Mining and Metals Industry: Handling and Resolving Local
Level Concerns and Grievances, ICMM (International Council on Mining and
Metals), 2009, www.icmm.com/page/14809/human-rights-in-the-mining-and-
metals-industry-overview-management-approach-and-issues
136
Gender
1. Why Gender Matters. A Resource Guide for Integrating Gender Considerations
into Communities Work at Rio Tinto, 2009, www.riotinto.com/documents/
ReportsPublications/Rio_Tinto_gender_guide.pdf
2. Women, Communities, and Mining: The Gender Impacts of Mining and
the Role of Gender Impact Assessment, Oxfam, 2009, www.oxfam.org.au/
resources/filestore/originals/OAus-MiningAndGender-1209.pdf
3. Promising Approaches to Engendering Development (web portal), The World
Bank Group, http://go.worldbank.org/ECX6CB6JR0
Monitoring and Measurement
1. The sdEffect™: Translating Sustainable Development Into Financial Valuation
Measures—A Pilot Analytical Framework, Yachin & Associates, Sustainable
Investment Group Ltd., and Corporate Knights Inc., 2006,
www.sdeffect.com/sdEffectFeb2006.pdf
2. Measuring Value: A Guide to Social Return on Investment (SROI), New
Economics Foundation, 2009,
www.neweconomics.org/publications/guide-social-return-investment
3. Managing Risk and Maintaining License to Operate: Participatory Planning
and Monitoring in the Extractive Industries, Parker, R., and Dakin, R., Business-
Community Synergies, 2008,
http://commdev.org/content/document/detail/2037/
4. London Benchmarking Group, www.lbg-online.net/index.php/lbg
5. Measuring Impact Framework, World Business Council for Sustainable
Development, 2008, www.commdev.org/content/document/detail/2184/
Partnerships
1. The Partnership Assessment Tool (web site), United Nations Global Compact,
www.unglobalcompact.org/issues/partnerships/pat.html
2. Partnering for Development—Making It Happen, UNDP, 2006,
www.undp.org/partners/business/UNDP-booklet-web.pdf
3. The Role of the Private Sector in Expanding Economic Opportunity through
Collaborative Action, Harvard Initiative, 2007, www.hks.harvard.edu/mrcbg/
CSRI/publications/report_29_Harvard%20EO%20Dialogue%20Summary%20
20071018.pdf
4. Partnering for Success. Business Perspectives on Multi-Stakeholder
Partnerships, World Economic Forum, 2005, www.weforum.org/pdf/ppp.pdf
5. Building Alliances Series (web portal), USAID,
www.usaid.gov/our_work/global_partnerships/gda/sector_guides.html
6. The Partnering Toolbook, International Business Leaders Forum, 2004, http://
shop.iblf.org/DisplayDetail.aspx?which=20
137
Stakeholder Engagement/Community Engagement
1. Stakeholder Engagement: A Good Practice Handbook for Companies Doing
Business in Emerging Markets, International Finance Corporation, 2007,
www.ifc.org/ifcext/enviro.nsf/Content/Publications_GoodPractice
2. Community-Driven Development Decision Tools for Rural Development
Programmes, International Fund for Agricultural Development, 2009,
www.ifad.org
3. Breaking Ground: Engaging Communities in Extractive and Infrastructure
Projects, World Resources Institute, 2009,
www.wri.org/publication/breaking-ground-engaging-communities
4. From Words to Action: The Stakeholder Engagement Manual, UNEP,
Accountability, and Stakeholder Research Associates, 2006,
www.accountability21.net/publications.aspx?id=904
5. Tools for Development—A handbook for those engaged in development
activity, Department for International Development, 2003,
www.dfid.gov.uk/Documents/publications/toolsfordevelopment.pdf
6. The World Bank Participation Source Book, World Bank,
www.worldbank.org/wbi/sourcebook/sbhome.htm
7. Guide to Engaging with NGOs, Business for Social Responsibility, 2001,
www.commdev.org/files/1922_file_BSR_Guide_to_Engaging_NGOs.pdf
138
Notes
1 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
2 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
3 Corporate Responsibility Report, ArcelorMittal, 2008, www.arcelormittal.com
4 Sources for this graphic:
Ayine, D., “Social Responsibility Agreements in Ghana’s Forestry Sector,” Developing
Legal Tools for Citizen Empowerment Series, IIED, 2008, www.iied.org/pubs/
pdfs/12549IIED.pdf
“Sino Gold in Chinese Agreements,” www.miningenvironmental.com/legal-brief/sino-
gold-in-chinese-agreements
Levi Strauss Foundation, www.levistrauss.com/Citizenship/LeviStraussFoundation/
GranteeSpotlights/GranteeSpotlight6.aspx
Ashley, C., Supply and Distribution Chains of Multinationals: Harnessing their Potential
for Development, Overseas Development Institute, 2009, www.odi.org.uk/resources/
download/4166.pdf
National Interpretation RSPO Principles and Criteria for Sustainable Palm Oil Production
for Oil Palm Smallholders (Republic of Indonesia), Roundtable on Sustainable Palm Oil,
2007, www.rspo.org
Lutalo, M., “The Wellness Program of Serena Hotels, Kenya—A Case Study,” World
Bank, 2007, www.ifc.org/ifcext/aids.nsf/AttachmentsByTitle/The+Wellness+Program+of
+Serena+Hotels/$FILE/GR-Serena_Final_Aug29_07.pdf
5 Development Without Conflict: The Business Case for Community Consent, World
Resources Institute, 2007, http://pdf.wri.org/development_without_conflict_fpic.pdf
6 “Planning and Financial Valuation Model for Sustainability Investments,” Presentation,
2009, http://commdev.org/content/document/detail/2596/
7 Nestlé – Creating Shared Value, www2.nestle.com/CSV/Pages/CSV.aspx
8 Sources for this box:
Business in the Community, www.bitc.org.uk/community/communitymark/
communitymark_companies/microsoft.html
Nestlé – Creating Shared Value, www2.nestle.com/CSV/Pages/CSV.aspx
Dialog Telekom PLC Sustainability Report 2008, www.dialog.lk/content/uploads/pdfs/
sustainability_reports/2008_sustainability_report.pdf
Fundación Wong, www.fundacionwong.org
9 Sources for this graphic:
Deutsche Bank Corporate Social Responsibility, www.db.com/csr/en/content/7238_7240.
htm
Nestlé in the Community, www.community.nestle.com/primary-education/asia/
philippines/Pages/donate-a-classroomprogramme.aspx
“Microsoft, Aga Khan to Launch Tech Centers,” www.dailytimes.com.pk
Harnessing Core Business for Development Impact, Overseas Development Institute,
2009, odi.org.uk/resources/download/2714.pdf
Khimti Neighborhood Development Project, UNDP, www.undp.org.np/pdf/projectdocs/
KIND%20project%20document.pdf
Sutton, N.C., and Jenkins, B., “The Role of the Financial Services Sector in Expanding
Economic Opportunity,” Economic Opportunity Series, Harvard University, 2007, www.
hks.harvard.edu/m-rcbg/CSRI/publications/report_19_EO%20Finance%20Final.pdf
Apollo Tyres, www.apollotyres.com/india_commuinity_aids_business.htm
139
10 Dialog Telekom Corporate Responsibility Report, 2007
11 For more detailed guidance on stakeholder identification and analysis, please refer to
Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in
Emerging Markets, IFC, 2007, www.ifc.org/sustainability
12 Sources for this section:
“Participatory Approaches to Increasing Women’s Voice in CDD Projects:
Examples from Indonesia,” Promising Approaches to Engendering Development,
World Bank, 2004, http://siteresources.worldbank.org/INTGENDER/Resources/
IndonesiaCDDPromisingApproach.pdf
Why Gender Matters. A Resource Guide for Integrating Gender Considerations into
Communities Work at Rio Tinto, Rio Tinto, 2009, www.riotinto.com/documents/
ReportsPublications/Rio_Tinto_gender_guide.pdf
13 Sources for this section:
The Effectiveness of World Bank Support for Community-Based and -Driven
Development, Independent Evaluation Group, World Bank, 2005, http://go.worldbank.
org/FMTE6W8XX0
“CDD and Elite Capture: Reframing the Conversation,” Social Development How to
Series, World Bank, 2008, http://go.worldbank.org/414DCE1FE0
Making Services Work for Poor People, World Development Report, 2004,
http://publications.worldbank.org/catalog/content-download?revision_id=3435362
14 Sources for this section:
Community-Driven Development in the Context of Conflict –Affected Countries:
Challenges and Opportunities, Social Development Department, World Bank, 2006,
http://siteresources.worldbank.org/INTCDD/Resources/CDD_and_Conflict.pdf
“Clarifying Challenges in Conflict and Post-Conflict Settings,” Social Development How
to Series, World Bank, 2008, http://go.worldbank.org/414DCE1FE0
15 Sources for this section:
Breaking New Ground: Mining, Minerals, and Sustainable Development, International
Institute for Environment and Development, 2002, www.iied.org/pubs/pdfs/9084IIED.pdf
Scaling Up Local and Community Driven Development (LCDD). A
Real World Guide to Its Theory and Practice, World Bank, 2009,
http://siteresources.worldbank.org/EXTSOCIALDEVELOPMENT/
Resources/244362-1237844546330/5949218-1237844567860/Scaling_Up_LCDD_
Book_rfillesize.pdf
Ensminger, J., Getting to the Bottom of Corruption: A Case Study in Community Driven
Development, California Institute of Technology, 2007, commdev.org/content/document/
detail/1823
16 Sources for this section:
The Effectiveness of World Bank Support for Community-Based and -Driven
Development, Independent Evaluation Group, World Bank, 2005,
http://go.worldbank.org/FMTE6W8XX0
Wright-Revolledo, K., Supporting the Capacity of Organizations at Community Level: An
Exploration of Issues, Methods, and Principles of Good Practice, INTRAC, 2007,
www.intrac.org/resources.php
17 Adapted from Annual and Sustainability Report, Aracruz Cellulose, 2008, www.aracruz.
com/minisites/ra2008/section/en/AracruzCelulose2008AnnualSustainabilityReport.pdf
18 Sources for this section:
Participatory Rural Appraisal, http://en.wikipedia.org/wiki/Participatory_rural_appraisal
Chambers, R., Rural Appraisal: Rapid, Relaxed and Participatory, Discussion Paper 311,
Institute of Development Studies, 1992, community.eldis.org/.59b4ab37/Dp311.pdf
Serrat, O., Social Network Analysis, Asian Development Bank, 2009, www.adb.org/
Documents/Information/Knowledge-Solutions/Social-Network-Analysis.pdf
Elliot, C., Locating the Energy for Change: An Introduction to Appreciative Inquiry,
International Institute for Sustainable Development, 1999,
www.iisd.org/pdf/appreciativeinquiry.pdf
140
Ashford, G., and Patkar, S., The Positive Path: Using Appreciative Inquiry in Rural Indian
Communities, Department for International Development, International Institute for
Sustainable Development, MYRADA, 2001,
www.iisd.org/pdf/2001/ai_the_positive_path.pdf
19 Annual Report 2008 (Letter to Shareholders), Newmont Mining Corporation,
http://investor.shareholder.com/newmont/AR2008/letter.cfm
20 Stakeholder Engagement: A Good Practice Handbook for Companies Doing Business in
Emerging Markets, IFC, 2007, www.ifc.org/sustainability
21 Adapted from the following sources:
Creating Successful, Sustainable Social Investment, IPIECA, 2008, www.ipieca.org/
activities/social/downloads/publications/SocialInvestmentGuide.pdf
Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
22 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
23 Biswas, P., Finan, T., A Sustainable Livelihoods Assessment and Community Development
Planning: A Guidebook Prepared for Enterprise for Development International (EFDI) and
Chevron Nigeria Limited (CNL), Tango International, 2006
24 Newmont Ghana, www.newmontghana.com
25 Lonmin staff and Lessons Learned Lonmin, IFC, 2009
26 DFID Guidance Sheets on Livelihoods Approaches, Eldis: Livelihoods Connect, www.
eldis.org/go/topics/dossiers/livelihoods-connect/what-are-livelihoods-approaches/training-
and-learning-materials
27 Biswas, P., Finan, T., A Sustainable Livelihoods Assessment and Community Development
Planning: A Guidebook Prepared for Enterprise for Development International (EFDI) and
Chevron Nigeria Limited (CNL), Tango International, 2006
28 Sanginga, P., Chitsike, C., The Power of Visioning, A Handbook for Facilitating the
Development of Community Action Plans, Enabling Rural Innovation in Africa, 2005,
http://idl-bnc.idrc.ca/dspace/handle/10625/38244
29 “Social Networks: Veracel Celulose,” IDIS, 2009, www.idis.org.br/library/cases/social-
networks-veracel-celulose-1/view?set_language=en
30 Sources for this example:
Veracel Sustainability Report, 2008, www.veracel.com.br/shared/relatorio2008_27agro.pdf
“Social Networks: Veracel Celulose,” IDIS, 2009, www.idis.org.br/library/cases/social-
networks-veracel-celulose-1/view?set_language=en
31 Consolidated Report on Sustainable Livelihoods Assessments and Community
Development Plans for Selected Communities in Delta, Rivers, Bayelsa, Ondo, and Imo
States, Chevron Nigeria Ltd., 2007
ces for
32 Sour thisgraphic:
IFC’s Revenue Management Program, www.ifc.org/ifcext/lac.nsf/Content/Corporate_
Advice
Kinross Maricunga staff and www.comunidadcolla.cl
DFCU Bank staff and Creating Opportunities for Women, IFC, www.ifc.
org/ifcext/sustainability.nsf/AttachmentsByTitle/fly_Gender_Brochure_
CreatingOppsforWomen/$FILE/Creating+Opps+for+Women+Brochure.pdf
BHP Billiton Sustainability Summary Report, 2009, www.bhpbilliton.com/
bbContentRepository/docs/sustainabilitySummaryReport2009.pdf
33 IFC’s Revenue Management Program, www.ifc.org/ifcext/lac.nsf/Content/Corporate_
Advice and MIM program (the Web site in Spanish), www.mim.org.pe
34 UNDP Capacity Development Practice Note, 2008, content.undp.org/go/cms-service/
download/asset/?asset_id=1654154
141
35 Adapted from UNDP Capacity Development Practice Note, 2008, content.undp.org/go/
cms-service/download/asset/?asset_id=1654154
36 Gibbon, M., Labonte, R., and Laverack, G., “Evaluating community capacity,” Health and
Social Care in the Community 10 (5), 2002, portals.wdi.wur.nl/files/docs/ppme/HSC_388.
pdf
37 Root Change, www.rootchange.org
38 Excerpted from Environmental and Social Performance Annual Monitoring Report,
Montana Exploradora de Guatemala, 2007, www.goldcorp.com/_resources/project_pdfs/
marlin/AMR_Marlin_2007_Final06068.pdf
39 Consolidated Report on Sustainable Livelihoods Assessments and Community
Development Plans for Selected Communities in Delta, Rivers, Bayelsa, Ondo, and Imo
States, Chevron Nigeria Ltd., 2007
40 Coca Cola Community Water Programs, www.thecoca-colacompany.com/citizenship/
community_initiatives.html
41 BG Group Social Performance Standard and Social Investment Guidelines
42 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
43 “Special Issue: Community Investment,” Ethical Corporation, 2008, http://commdev.org/
content/calendar/detail/2381
44 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
45 Creating Successful, Sustainable Social Investment, IPIECA, 2008, www.ipieca.org/
activities/social/downloads/publications/SocialInvestmentGuide.pdf
46 Sources for this example:
Khimti Neighborhood Development Project, UNDP, www.undp.org.np/pdf/projectdocs/
KIND%20project%20document.pdf
Increasing Access to Electricity and Community Development: Khimti Neighborhood
Development (KiND) Project in Nepal, UNDP, www.undp.org/partners/business/resources/
cs_khimiti_nepal.pdf
Presentation at Annual Local Networks Forum, UN Global Compact, 2009,
www.unglobalcompact.org/docs/networks_around_world_doc/Annual_Local_Networks_
Forum/Istanbul/KF_Business_and_Peace_GCLN_Nepal_Business_and_Conflict.pdf
47 Lihir Gold Sustainable Development, www.lglgold.com/asp/index.asp?pgid=10662
48 Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-Community
Relations Work, CDA Collaborative Learning Projects, published by Greenleaf Publishing
Limited, 2009
49 Sources for this table:
Creating Successful, Sustainable Social Investment, IPIECA, 2008
www.ipieca.org/activities/social/downloads/publications/SocialInvestmentGuide.pdf
The Role of the Private Sector in Expanding Economic Opportunity through Collaborative
Action, Harvard University CSR Initiative, Economic Opportunity Program, 2007, www.
hks.harvard.edu/m-rcbg/CSRI/publications/report_29_Harvard%20EO%20Dialogue%20
Summary%2020071018.pdf
142
50 Sources for this graphic:
BTC/SCP Georgia Community Investment Programme and Improved Schools Programme
Final Evaluation, Environmental Resources Management, 2006
Baku-Tbilisi-Ceyhan Project Community Investment Plan Final, 2003, www.commdev.org/
files/2273_file_CDP_BTC_Pipeline_Georgia_Azerbaijan_Turkey_2003_.pdf
Cargill Cares Councils, www.cargill.com/corporate-responsibility/cargill-volunteers/cargill-
cares-councils/index.jsp;
Newmont Ghana, www.newmontghana.com
Partnering for Success, World Economic Forum, 2005, www.weforum.org/pdf/ppp.pdf
Environmental and Social Performance Annual Monitoring Report, Montana Exploradora
de Guatemala, 2007, www.goldcorp.com/_resources/project_pdfs/marlin/AMR_
Marlin_2007_Final06068.pdf
51 Sources for this table:
Creating Successful, Sustainable Social Investment, IPIECA, 2008, www.ipieca.org/
activities/social/downloads/publications/SocialInvestmentGuide.pdf
The Role of the Private Sector in Expanding Economic Opportunity through Collaborative
Action, Harvard University CSR Initiative, Economic Opportunity Program, 2007, www.
hks.harvard.edu/m-rcbg/CSRI/publications/report_29_Harvard%20EO%20Dialogue%20
Summary%2020071018.pdf
52 Consolidated Report on Sustainable Livelihoods Assessments and Community
Development Plans for Selected Communities in Delta, Rivers, Bayelsa, Ondo, and Imo
States, Chevron Nigeria Ltd., 2007
53 BTC/SCP Georgia Community Investment Programme and Improved Schools Programme
Final Evaluation, Environmental Resources Management, 2006
54 Various project documents and the project team from COTCO (a consortium of
companies and governments of Cameroon and Chad operating the Chad-Cameroon
pipeline) and IFC
55 www.ge.com/citizenship/news_features/features_community_building.jsp
56 Suezan, L., Public-Private Partnerships for Development. A Handbook for Business,
USAID, 2006, www.issuelab.org/research/public_private_partnerships_for_
development_a_handbook_for_business
Partnering for a Better World, United Nations, business.un.org/en
57 Sources for this example:
“Conceptual Picture of Partnership Models Implemented in the Eastern Limb to Support
a Developmental State,” Presentation to World Bank Representatives, 2009
Smith, G.L., Dalomba, F.A.C., and Andersen, D.C., “The Challenges of Infrastructure
Development in the Eastern Limb of the Bushveld Complex of South Africa,” Third
International Platinum Conference ‘Platinum in Transformation,’ The Southern African
Institute of Mining and Metallurgy, 2008, www.platinum.org.za/Pt2008/Papers/367-374_
Smith.pdf
58 “Community Investment Award Winner (2009): Standard Chartered Bank,” www.
gbcimpact.org/itcs_node/9/502/award/1927
59 Leadership, Accountability and Partnership: Critical Trends and Issues in Corporate Social
Responsibility, Harvard University, Kennedy School of Government, 2004, www.hks.
harvard.edu/m-rcbg/CSRI/publications/report_1_Launch%20Summary%20Report.pdf
60 Sources for this section:
Adapted from Putting Partnering to Work, Business Partners for Development, 2002,
www.grsproadsafety.org/themes/default/pdfs/Putting%20Partnering%20to%20
Work%20-%20MAIN%20REPORT.pdf
Malena, C., “Strategic Partnership: Challenges and Best Practices in the Management
and Governance of Multi-Stakeholder Partnerships Involving UN and Civil Society
Actors,” Background paper prepared by for the Multi-Stakeholder Workshop on
Partnerships and UN-Civil Society Relations, 2004, www.un-ngls.org/orf/partnership-
carmen-malena.doc
143
61 Adapted from Profiles of the Corporate Social Responsibility (CSR) Practices of Philippine
Mining Firms, prepared and written by the Mines and Geosciences Bureau and Hubo
C.L., The University of Asia and the Pacific, 2003, http://siteresources.worldbank.org/
INTPSD/Resources/Philippines/phil_CSR_Case_Studies.pdf
62 Sources for this box:
Standard Charted, www.standardchartered.com/sustainability/community-investment/
living-with-hiv/en/index.html
Engro Food Pakistan and UNDP Partnership, http://business.un.org/en/browse/
partnership_stories/13
Starbucks Community Involvement Program, www.starbucks.com/sharedplanet/index.
aspx
63 Community Investment Indicators, 2008, www.commdev.org/content/document/
detail/2106
64 Sources for this box:
Rio Tinto staff and www.riotinto.com/ourapproach/17215_communities_17356.asp
Petrobras Social and Environmental Report, 2008, www2.petrobras.com.br/
ResponsabilidadeSocial/ingles/pdf/BSA2008_ING.pdf
Association Los Andes de Cajamarca (ALAC) staff and ALAC’s Web site at www.
losandes.org.pe/en/index.htm
65 Building a Sustainable Future, APRIL, 2008, www.aprilasia.com/images/Updates/
SustainabilityReport%2708.pdf
66 Parker, R., Dakin, R., Managing Risk and Maintaining License to Operate: Participatory
Planning and Monitoring in the Extractive Industries, Business-Community Synergies,
2008, commdev.org/content/document/detail/2037
67 Why Gender Matters. A Resource Guide for Integrating Gender Considerations
into Communities Work at Rio Tinto, 2009, www.riotinto.com/documents/
ReportsPublications/Rio_Tinto_gender_guide.pdf
68 Why Gender Matters. A Resource Guide for Integrating Gender Considerations
into Communities Work at Rio Tinto, 2009, www.riotinto.com/documents/
ReportsPublications/Rio_Tinto_gender_guide.pdf
69 Dialog Telekom staff and Enabling an Information Society, Dialog Telecom PLC
Sustainability Report, 2008, www.dialog.lk/content/uploads/pdfs/sustainability_
reports/2008_sustainability_report.pdf
70 McKinsey Global Survey Results: Valuing corporate social responsibility, McKinsey &
Company, 2009, http://commdev.org/files/2393_file_McKQ_Valuing_Corporate_Social_
Responsibility.pdf
71 The sdEffect™: Translating Sustainable Development Into Financial Valuation Measures
A Pilot Analytical Framework, Yachnin & Associates, Sustainable Investment Group Ltd.,
and Corporate Knights Inc., 2006, www.sdeffect.com/sdEffectFeb2006.pdf
72 Adapted from Zandvliet, L., and Anderson, M. B., Getting it Right: Making Corporate-
Community Relations Work, CDA Collaborative Learning Projects, published by Greenleaf
Publishing Limited, 2009
73 Sources for this table:
“Planning and Financial Valuation Model for Sustainability Investments,” Presentation,
2009, www.commdev.org/content/document/detail/2557
A Guide to Social Return on Investment, New Economics Foundation, 2009, www.
neweconomics.org/sites/neweconomics.org/files/A_guide_to_Social_Return_on_
Investment_1.pdf
The sdEffect™: Translating Sustainable Development Into Financial Valuation Measures
A Pilot Analytical Framework, Yachnin & Associates, Sustainable Investment Group Ltd.,
and Corporate Knights Inc., 2006, www.sdeffect.com/sdEffectFeb2006.pdf
144
145
146
Acknowledgements
This handbook updates and expands upon the learning in IFC’s 2000 community development
resource guide, Investing in People: Sustaining Communities through Improved Business
Practice. It was produced in response to demand from companies for updated how-to
guidance and current good practice approaches.
The handbook was prepared by the Global Community Investment team within IFC’s
Advisory Services: Debra Sequeira, Team Leader, and Maria Arsenova, with support from
Root Change, Environmental Resources Management, Overseas Development Institute,
and Social Capital Group. We would also like to acknowledge CDA Collaborative Learning
Projects, whose insights and materials are cited frequently in the handbook.
There are numerous contributors to thank for providing content and guidance, including:
Flavio Flores Acevedo, Javier Aguilar, Caroline Ashley, Diana Baird, Evan Bloom, Jacqueline
Bueso-Merriam, John Butler, Nick Cotts, Alan Dabbs, Aidan Davy, Joseph Danso, Jeffrey
Davidson, Michael De Soyza, Rodrigue Djahlin, Edouard Djeengue, Dennis Fleming, Jacob
Gray, Ramanie Kunanyagam, Claudia Liebler, Gary McMahon, Tunde Morakinyo, Ted Pollett,
Guillermo Rivero, Kate Stevens, Jorge Villegas, Hannfried von Hindenburg, and Luc Zandvliet.
A special thank you goes to Toshi Masuoka, Sujata Lamba, Monika Weber-Fahr, Houria
Sammari, and Dafna Tapiero for championing this effort, and to Veronica Nyhan Jones and
Arjun Bhalla for their contributions and support throughout the process.
Thanks are also due to those who offered valuable comments and other support to the
team on various drafts during the peer review process, including: Chris Anderson, Jennifer
Barsky, Cyrille Bellier, Hannah Buckley, Kerry Connor, Karla Diaz Clarke, Leyla Day, Juan Jose
Dada, Alexis Diamond, Fiorella Facello, Rashanikka Fowler, Robert Gerrits, Lucie Giraud, Anna
Hidalgo, Amar Inamdar, Liane Aste Londe, Paula Luff, Larissa Luy, Rajiv Maher, Adel Malebana,
Shaun Mann, Sofie Fleischer Michaelsen, Peter Neame, Julia Nelson, Carmen Niethammer,
Roman Novozhilov, Daniel Owen, Rani Parker, Remi Pelon, Soren Petersen, Justin Pooley,
Sergut Selassie, Colin Shepherd, Ananthy Thambinayagam, Robin Weisman, Claire White,
Elizabeth Wild, Bruce Wise, Duval Zambrano, Shaza Zeinelabdin, Rong Zhang, and Wenlei
Zhou.
The publication was edited by Daria Steigman and designed by Ryan Clennan and Amy Orr
of Studio Grafik. Printing of this publication was made possible through funding provided by
the Government of Norway.
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