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Six Issues That Can Ruin Public-Private Partnerships for Community Development






As inflation erodes purchasing power and budgets tighten, many community leaders are turning once again to developing public-private partnerships as vehicles to get important projects done. PPPs are important tools for leveraging expertise, resources, outside perspectives, and trust-building, but they can also be a waste of those exact same tools too. Here are six issues to consider if your PPP is going off track:

  1. Lack of respect. PPPs are not a vehicle for one party to control the resources of another. I've been in PPPs where "quiet quitting" happens because one partner or another is too domineering, and it is obvious that they think their sector is more powerful, more "pure" or more capable than the others. Often, partners won't tell you about their sensitivities directly, but they won't show up either.

  2. Unclear funding expectations. Philanthropic funding can jumpstart PPPs, but it is not necessarily sustainable. However, if the issue to be addressed is outside of normal scope and budgets, this initial funding can be critical. Similarly, governments shouldn't expect the private sector or charities to fully fund partnerships that are for public benefit. Businesses are accustomed to paying memberships or sponsorships, but not underwriting programs that do not have a direct bearing on their business.

  3. Recognize that you may be talking the same language but saying different things. "Equity" is a case in point. Equity from a social perspective has strong fairness and justice connotations. In business, equity refers to ownership and the share one has in building up an asset. Home equity can mean something entirely different to different partners. A similarly confusing word is "exploit" which can mean a type of application or use for technology, an opportunity for business, and an unjust action for some advocacy groups. It's amazing how conversations can unintentionally go downhill very fast.

  4. Partner constraints. My office was in the middle of a negotiation in the aftermath of Katrina trying to figure out how to save a particular neighborhood. The developers were talking about a new kind of REIT, the lawyers were talking about the challenges of unclear titles passed down through generations, and the banks were talking about whether they could fund the investment and get Community Reinvestment Act credits, when suddenly, one of the government representatives stopped the conversation and said "wait a minute. We have to change the name of this project." The private sector folks around the table looked at each other incredulously. This seemed so trivial at the time, but the official explained: "my authority comes from the Emergency Supplemental passed by Congress. Anything that falls within these parameters, we can do. However, if we support this project in this way, someone could go to jail." You could tell that the legal constraints of the government representatives and their implications had not occurred to any of the business people. Similarly, government and nonprofit leaders are often perplexed by business calculations. Laws, budgets, funding, programmatic rules can be very real hurdles, even when the partners are willing.

  5. Turnover. I can't tell you how many times partnerships have been set back by turnover. Often partnerships work because of personal chemistry and shared experiences. Partnerships are particularly vulnerable on the government side when elections happen and there is a change in the party in power. Under George W. Bush, we were able to build broad coalitions for workplace volunteerism, education and international development. Under President Obama, these partnerships atrophied while new ones developed around health care and housing. Similarly, CEO turnover can affect nonprofits and businesses profoundly as well. Under Judith Rodin, the Rockefeller Foundation was a major funder of resilience programs. When Raj Singh took over, the Rockefeller Foundation pivoted to food and health. For partnerships to succeed leadership transitions, they need to have strong onboarding processes and clear explanations of their value and importance.

  6. Momentum. There are perennial issues like education, health, and disaster resilience that lend themselves to ongoing PPPs, but like everything in life, there can be times of intense collaboration and then lulls. Lulls can extend to the point where relationships deteriorate, shared understandings erode, transitions happen, and it almost feels like the PPP needs to start from scratch again. This is a waste of resources, time and energy. For these reasons, it's important for PPPs to have structured annual calendars for at least one or two regular meetings to check in, go over issues, and renew relationships.

Sometimes partnerships outlive their usefulness and should fade away. However, this should be intentional and purposeful. Having a PPP wither unintentionally can be avoided. It just takes recognizing the challenges and going into them with the right attitudes, responsibilities, and processes ahead of time.

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