The DCED is a key forum and knowledge hub providing practical support to donors in the transition to strategic private sector engagement. This knowledge page lists key resources in four areas: (1) The DCED’s own publications on private sector engagement, based on the extensive experiences of member agencies and other development organisations; (2) Overview documents that map out different trends and engagement practices; (3) information and lessons learnt on four different formats of engagement, including new and traditional approaches; and (4) ‘how-to’ guidance and tools for practitioners.
‘All new [aid] investments will explore innovative ways to engage the private sector ‘…’Central to this new way of working is ‘the concept of shared value…: that business can deliver sustainable social impact … while achieving commercial returns.’ Australia DFAT
- Find what you need: DCED guidance and knowledge products on private sector engagement
- Overview documents: engaging the private sector for development
- Different formats of engagement
- Practical tools and ‘how to’ resources for engaging business
Find what you need: DCED guidance and knowledge products on private sector engagement
This section provides easy access to the DCED’s key documents on private sector engagement, based on the extensive experiences of DCED member agencies and other development organisations in working with business.
DCED overview documents
- How donors can make the transition to strategic private sector engagement: Programming innovations and organisational change, DCED, 2017. Donor agencies are still largely geared towards bilateral work or traditional formats of public-private collaboration. This briefing note documents pioneering changes in policies and procedures, staff roles and team structures, as well skill-sets and incentives in order to pave the way for strategic private sector engagement.
- Donor partnership funds and facilities for partnering with business, Synthesis Note, DCED, updated 2017. This synthesis note provides a handy overview of donor partnership funds and facilities that invite project proposals by business. It highlights different formats, trends and lessons learnt.
- Comparison of matching grant schemes and systemic approaches, Synthesis Note, DCED, 2017. Donor facilities that invite applications from business and market systems approaches can look similar in the ground, where both use a matching grant to an individual company to stimulate investment and change. They do however differ in many other aspects. This Note explores the implications, covering both differences and potential complementarities.
- Donor partnerships with business for private sector development: What can we learn from experience? DCED, 2013. This review categorises different partnership models and highlights key issues and lessons learnt in areas that had received little attention to date: assessing additionality, measuring results and ways to enhance partnership effectiveness
DCED research on different formats of engagement
- Engaging the private sector through multi-stakeholder platforms, DCED, 2017. This report reviews the objectives, achievements and lessons of multi-stakeholder platforms – which represent an increasingly popular way for engaging the private sector in development. To what extent do they provide a useful strategy for working with business going forward?
- Results Measurement in Impact Investing: A Preliminary Review, DCED, 2016. This paper examines current practices in measuring social and environmental impact generated through impact investments. It gives an overview of the topic, as well as insights for future thinking in related areas, such as traditional partnerships with business and blended finance.
- Donor partnerships with business for private sector development: What can we learn from experience? DCED, 2013. This review (see also in overview documents above) is largely focused on challenge funds and similar cost-sharing modalities.
DCED ‘how to’ guidance and resources
- How donors can make the transition to strategic private sector engagement: Programming innovations and organisational change, DCED, 2017. This briefing paper (see also in overview documents above) offers examples and directions for agencies that wish to become better equipped for engaging the private sector in their work.
- Does business structure influence social impact? Insights and practical implications for donors, Oxfam/DCED, 2016. One particular area of interest is how business structure may influence social outcomes, a theme that has not received much attention until now. This Briefing Note explores why form, governance and ownership matter, and reviews the evidence that they can influence outcomes for the poor. It is intended to support donors in choosing the most suitable business partners.
- Measuring Results in Challenge Funds: Practical Guidelines for using the DCED Standard, DCED, 2013. These are the first inter-agency guidelines providing specific advice on how to measure results in challenge funds, based on the good practice of the DCED Standard. It covers issues such as how to design a practical results measurement system, and how to share responsibilities between the business and the fund manager
- Demonstrating Additionality in Private Sector Development Initiatives: A practical exploration of good practice, DCED, 2014. Demonstrating the added value, or additionality, of support to business is one of the key challenges donors face in private sector engagement. Based on a review of experiences to date, this exploratory guide proposes eight practical criteria and principles that can help agencies develop a credible narrative on their additionality.
- Practices for screening partners, DCED Synthesis Note, updated 2017. This synthesis note summarises varying donor criteria and processes for screening potential partners in terms of their social and environment impact, and highlights current trends and key issues.
Overview documents: engaging the private sector for development
The SDGs confirm that “private business activities, investment and innovation are major drivers of productivity, inclusive economic growth and job creation.” This section links to selected overview documents on how donors and other development organisations engage with business to leverage their contribution towards poverty reduction.
Global reviews and typologies
- Private Sector Engagement for Sustainable Development. Lessons from the DAC, OECD, 2016.
- From looking good to doing good. Mapping CSO-Business Partnerships, ECDPM, 2015.
- Matching Grant Schemes and Systemic Approaches for Private Sector Development, Synthesis Note, DCED, 2015.
- Trends in Public-Private Partnerships and Inclusive Business Models, Carana Corporation, 2014.
- Analysing Public-Private Partnerships for International Development, ANU, 2013.
- Public-private partnerships in developing countries. A literature review, Netherlands Ministry of Foreign Affairs, 2013.
- How donors engage with business, ODI, 2013.
- Bilateral Donor Approaches to Engaging the Private Sector. North-South Institute and CCC, 2012.
- OECD DAC Peer learning country reports (2016): Germany; Netherlands; Sweden; United States
- Desk Study of Sida’s Experiences from Private Sector Collaboration, Sida, 2016
- DFID Business in Development, UK Independent Commission for Aid Impact, 2015
Different formats of engagement
This section lists resources on sector-specific partnerships, which are typically multi-stakeholder in nature. They feature combined donor and private funding and an agreement of all funding and implementing partners on the sharing of tasks and responsibilities towards a common goal – such as jointly boosting the competitiveness of a particular commodity in a country or regions, or enhancing sustainable production methods in an agricultural sector.
- Study on the responsible management of global value chains in the garment sector, EC, 2016.
- Public-private partnerships for agribusiness development: A review of international experiences. FAO, 2016.
- Review of the Sustainable Trade Initiative IDH 2008-2013, Netherlands Ministry of Foreign Affairs, 2014. (IDH has facilitated and/or co-funded various sectoral partnerships)
- Key conditions for successful value chain partnerships: A multiple case study in Ethiopia, The Partnerships Resource Centre, 2012.
- Case study of the African Cashew Initiative – Focus: Ghana. Lessons from working with new and multiple partners – Emerging Results, DCED, 2012.
- An Analysis of Hidden Variables Influencing the Challenges and Opportunities of Implementing R&D and Value Chain Agricultural Public-Private Partnerships in the Developing World, William Boland, 2012.
Multi-stakeholder platforms and processes
Multi-stakeholder platforms are a specific sub-form of partnerships, i.e. they involve the active and equal participation of the private sector, are based on a sharing of resources, risks and responsibilities, and deliver mutual benefits. Multi-stakeholder platforms have a knowledge sharing or standard-setting purpose; involve a larger number of organisations; and include multi-stakeholder members, supporters and funders. The direct beneficiaries of platforms are their members. This is different from shared value partnerships, which are organised around the core business model of an individual business, and involve the implementation of activities that directly benefit the poor.
Note that the terms ‘platforms’ and ‘partnerships’ are often used interchangeably in the literature (including some of the publications below). Most of the publications below offer insights into the design and governance multi-stakeholder processes more generally, including platforms.
- Engaging the private sector through multi-stakeholder platforms, DCED, forthcoming 2017.
- In-country multi-stakeholder platforms to catalyse collaboration and partnerships for Agenda 2030, The Partnering Initiative, 2016: offers lessons learnt in the design of national-level platforms; distinguishes between platforms and partnerships.
- More than the sum of its parts: Making multi-stakeholder initiatives work, Global Development Incubator, 2015: Reviews lessons for designing multi-stakeholder initiatives, largely referring to multi-stakeholder platforms.
- Multi-Stakeholder Partnerships: Building Blocks for Success, International Civil Society Centre, 2014:provides a framework distinguishing between different types of ‘partnerships’ (effectively including platforms) and documents lessons learned for multi-stakeholder processes.
- Multi-stakeholder processes: Knowledge portal of Wageningen University
- List of multi-stakeholder platforms/ roundtables in the area of sustainable sourcing (by SAI)
Impact investment and innovative finance
In addition to grants to share the costs of investments or technical assistance, donors are increasingly interested in other forms of finance to address the diverse needs of businesses. A number of overview documents on concepts, terminologies and current experience can be found below.
- Impact Investing Trends Evidence of a Growing Industry, The Global Impact Investing Network, December 2016.
- Blending 2.0: Towards new (European External) Investment Plans, ECDPM, December 2016.
- Private Capital for Sustainable Development. Concepts, Issues and Options for Engagement in Impact Investing and Innovative Finance. DANIDA, 2016.
- GIIN Annual Impact Investor Survey, with JP Morgan & Chase Co and UK Aid Impact Programme, 2016.
- Survey of the impact investment market: challenges and opportunities in Sub-Saharan Africa and South Asia, DFID, 2015.
- Social impact investment – building the evidence base, OECD, 2015.
- Impact Investing and Inclusive Business Development in Africa: A research agenda. The Open University, 2015.
- Blended Finance Vol. 1: A Primer for Development Finance and Philanthropic Funders, OECD, 2015.
- Financial Instruments for Private Sector Development. EPS PEAKS, 2014.
- Innovative Financing for Development: Scalable Business models that produce economic, Social, and environmental outcomes, Citi Foundation et al., 2014.
- Assessment of the Impact investment Sector and Opportunities to Engage Mainstream Investors, WEF, 2013.
- The Case for a Sector Based Approach to Impact Investing, Omidyar Network, 2012.
Challenge funds and similar cost-sharing facilities
A declining but significant sub-set of ongoing and past private sector engagement work has been implemented through application-based funds and facilities. These central or regional-level mechanisms are primarily geared at businesses from donor countries, and offer cash grants and/or technical assistance to facilitate investments in developing countries. Financial support may either be transferred directly to a business or via an NGO. This section offers a repository of key documents on lessons learnt as well as evaluations of past programmes.
Note that many traditional challenge funds have been designed as donor-led, transactional mechanisms, rather than based on ‘real’ partnership. Some donors have recently changed the design of challenge funds in line with business demand and gaps identified in previous support mechanisms, e.g. by increasingly focusing on highly innovative projects or sharing local knowledge and networks, in addition to financial support. Increasingly though, donor agencies are exploring new approaches that focus on co-developing shared value partnerships jointly with business (see DCED, 2017). This may take several months or even years. Ultimately, they are expected to deliver both commercial and development benefits, by building on a company’s core business to deliver development solutions with a direct impact on the poor.
Research on current practice and lessons learnt in challenge funds
- Donor partnership funds and facilities for partnering with business, Synthesis Note, DCED, 2017.
- USAID’s Public-Private Partnerships. A data picture and review of business engagement, Brookings, 2016.
- Public-Private Partnerships in global value chains. Can they actually benefit the poor?, Duke University for USAID, 2015:
- Enterprise challenge funds for development: rationales, objectives, approaches, ANU, 2014.
- Centrally managed donor funds and facilities to promote business engagement, ODI, 2014.
- Meeting the challenge: How can enterprise challenge funds be made to work better, EPS PEAKS, 2014.
- Challenge Funds in International Development. Research Paper, TripleLine Consulting et al., 2013.
- Donor partnerships with business to promote PSD – What can we learn from experience?, DCED, 2013.
- Models for Trade-Related Private Sector Partnerships for Development, North-South Institute, 2013.
Result reports and evaluations
- A literature review on the additionality of using ODA to leverage private investments, UKAN, 2015.
- Public-Private Partnerships in Development Cooperation. Potential and Pitfalls for Inclusive Green Growth, PBL Netherlands Environmental Assessment Agency, 2015.
- Evaluation of the Danida Business-to-Business Programme 2006-2011, Danish Ministry of Foreign Affairs, 2014.
- Evaluation of the Responsible and Accountable Garment Sector (RAGS) Challenge Fund, Oxford Policy Management, 2014. Note that the funds’ own final report can be accessed here.
- Review of the Business Innovation Portfolio, BIF, 2013.
- AusAID Enterprise Challenge Fund for the Pacific and South-East Asia. A report on the outcomes of the ECF Portfolio Investment, Coffey International, 2012.
- Evaluation of the Finnpartnership Programme, 2006-2011, KPMG, 2012.
- Evaluation of PSOM/PSI 1999-2009 and the MMF, for the Netherlands Ministry of Foreign Affairs, Triodos Facet, 2010.
Practical tools and ‘how to’ resources for engaging business
This section includes documents which provide practical guidance or pointers for how development practitioners can choose partners, design and manage partnerships and collaborations with business, and assess their results.
In January 2017, the Practitioner Hub published a series of blog posts on demystifying the donor-business space, including on how to bridge the cultural gap between business and development organisations, effective approaches to business collaboration beyond traditional frameworks, and lessons on screening partners and designing partnerships from field programmes.
Generic or comprehensive handbooks and guides
- How donors can make the transition to strategic private sector engagement: Programming innovations and organisational change, DCED, 2017.
- The MSP Guide: How to Design and Facilitate Multi-Stakeholder Partnerships, Wageningen University, 2016.
- Subsidy Policy Framwork, DFID, 2015.
- Private Sector Engagement Toolkit, Mercy Corps, 2012.
- Challenge Fund Guidelines, Sida, 2013.
- UN Business Partnerships: A Handbook, UN Global Compact, 2013.
- LINK methodology: A participatory guide to business models that link smallholders to markets, CIAT, 2012.
- A guide to PPPs. A practical handbook on launching an effective public-private partnership, DGIS MINBUZA, 2010..
- Development aid and subsidies: A science and an art, SDC, 2007. (practical lessons from page 8)
Assessing additionality ex-ante
- Demonstrating Additionality in Private Sector Development Initiatives – A practical exploration of good practice for challenge funds and other cost-sharing mechanisms, DCED 2014.
- A framework for efficient government investment, IMF, 2013.
- Additionality. A Primer, IFC, 2013.
- ‘Leveraging’ private sector finance: How does it work and what are the risks?, The Bretton Woods Project, 2012.
Criteria and processes for choosing partners
- Does business structure influence social impact? Early insights and practical implications, DCED and Oxfam, 2016.
- Multinational enterprises and economic development in host countries, United Nations University, 2016.
- Promoting ethics when partnering with the private sector for development, NSI, 2014.
- Choosing who to partner with: Approaches to Screening Out Companies with Negative Social and Environmental Impacts. Synthesis Note, DCED, updated 2017.
- Guidelines for risk assessment, Danida and List of risk categories, risk parameters and sources for external assessments, Danida.
- Due Diligence Guide, DFID.
- Risk Assessment Tool, UNDP.
- What practical approaches/frameworks are there for effectively delivering subsidy to private sector entities for development purposes?, EPS PEAKS Helpdesk Request, 2013
- DCED (2016): Results Measurement in Impact Investing. A preliminary review
- DCED (2013): Measuring Results in Challenge Funds. Practical Guidelines for Implementing the DCED Standard
- The business value of impact measurement, GIIN, 2016.
- BMZ (2014): 12 Good Practices for Results Measurement, Endeva, 2014.
- WBCSD (2013): Measuring Socio-Economic Impact A Guide for Business