"...I’m here today to announce that the State Department is opening its doors to a new generation of public-private partnerships. We will expand current partnerships and embark on new ones. We’ll embrace collaboration and become more receptive to the ideas and approaches that you will bring to us. And we want to deploy the full range of tools available..."

-Secretary of State Hilary Clinton at the Global Philanthropy Forum (April 22, 2009)

Source: US Department of State

Public-private partnerships (PPPs) are hot these days.  A quick Google search reveals mentions of PPPs in initiatives ranging from high speed rail expansion to low-income community broadband access to international development.   It seems that PPPs are central to the objectives of many members of the Obama administration, as exemplified by Secretary of State Hillary Clinton earlier this year.

PPPs have grown in popularity in the past 15 years, spiking in terms of the number of partnerships in the late 90s.  Despite their popularity and the seemingly logical belief that collaboration between the public and private sectors is "a good thing," I find it hard to determine the tangible value they bring to the table and to forecast if this trend will continue.

These thoughts were affirmed this week as I read a publication from the May 2009 edition of the Journal of Business Ethics titled "Partnerships for Development: Four Models of Business Involvement."  Written by Professors Ananya Mukherjee Reed and Darryl Reed, both of York University, the report outlines four models of business partnerships that relate to economic development:

1. Conventional business partnerships: partner, often a corporation, provides the core business, such as an electricity partner does for a community.
2. Corporate social responsibility partnerships: partner, often a corporation, provides resources, such as apparel or other products and services, in return for PR, marketing opportunities or access to information.
3. Corporate accountability partnership: partner, often an organizing body, provides rules, transparency or certification requirements with which corporations are asked to comply.
4. Social economy partnerships: partner, a nonprofit or cooperative organization, provides resources and rules and seeks to engage corporations.

The second of these models, corporate social responsibility partnerships (CSRP), caught my eye as this model closest to what I would call a PPP.  According the report, the model is defined by the facts that the partnership is voluntary - corporations join by choice - and the partnership is business friendly - corporations play a role in the design and control of the partnership.

What's more interesting are the conditions that the report outlines as being critical to the success of such a partnership.  Most notably, the authors state that there must be strong motivation for corporations to participate.  According to the report and to conventional knowledge, it's unlikely that ethical values alone will suffice.  Instead, the partnership must offer a "win-win" situation that will generate some value for the corporation.  (What type of value is undefined.)

Mission Measurement's experience with corporate clients tells me these conditions are not only true; they are also increasing in importance.  Corporations are focusing more and more on the strategic role and economic impact of their philanthropic endeavors, including partnerships with the public sector.  Unfortunately, when it comes to PPPs, measuring impact often focuses on social impact alone, leaving corporations wondering what they gain from the investment.  Without knowledge of the outcomes achieved that are meaningful to the business, how long will corporations continue to participate?

Measurement in PPPs also has a second gap: little research is done to clearly measure the incremental outcomes achieved by using PPPs as opposed to independent investment from the public or private sector.  Without data to validate the value of  PPPs, how do we know the approach is effective?

To be sure, I believe that PPPs can and should play a role in domestic and international development and that businesses can derive a number of sources of value through participation in them.  What will be critical to the continued use and effectiveness of PPPs is a measurement system that can capture and elucidate the wide range of impact created, including social change, business value, and partnership leverage.