January 16, 2018; KCUR
Increasing pressure from consumers and investors to become more sustainable has led to an ever-growing—and, in some cases, ever-more dubious—partnerships between nonprofits and agribusiness. The question at the forefront: Is agribusinesses motivated by good faith to cut down on its environmental damage, or is this really a case of cheap advertising? In Missouri, two recent partnerships have raised this issue.
For the last few years, Smithfield has been working with Roeslein Alternative Energy (RAE) to capture methane from hog waste and convert it into biogas, which Smithfield hopes to use to reduce its carbon emissions by 25 percent by 2025. This collaboration led to a partnership with the Environmental Defense Fund to restore land at a Missouri hog farm and turn it into a protected land for monarch butterflies, which are important pollinators that are dangerously close to being added to the federal protected species list. But making the jump from hog processor to monarch butterfly protector has some critics questioning their intentions.
Perhaps Smithfield is capitalizing on the public’s love of monarch butterflies to get some positive advertising. This seems plausible, particularly when we consider that only $300,000 of the company’s $15 billion in revenue are being spent on this project. If the company’s core activities harm the environment, and less than one percent of its activity counteracts this, does this collaboration have any net positive impact on the environment? Moreover, what is the net positive for Smithfield, as compared to the net positive for the environment?
Another partnership raising similar concerns is between Archer Daniels Midland (ADM), an agricultural crop processor, and the Ag Water Challenge. According to the Ag Water Challenge, “With the global food sector using 70 percent of the world’s freshwater supply, food and beverage companies can and must play a powerful role in protecting water quality and quantity….Participating companies receive support in analyzing water issues within their supply chains, and in refining or making new sourcing commitments that enable them to better address their risk.”
Again, the funds invested are paltry. In ADM’s case, the amount of its investment is $30,000 on $61 billion in revenue, an even smaller investment than Smithfield.
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Agribusinesses have a clear incentive to participate in corporate-nonprofit partnerships. They can check off their sustainability initiative for the year and get positive PR on the cheap. But this is not to discount the possibility of mutual benefits to these partnerships. Beyond the funding, sometimes participating nonprofits and agribusinesses can share expertise to solve problems together.
Still, there is something unsettling about massive corporations getting a gold star for allocating resources to combatting the very problem that they contributed to creating in the first place. One aspect of this is that some consumers may see these corporate-nonprofit relationships and mistakenly believe they are purchasing from a “green” company, even when the partnership represents only the tiniest fraction of the company’s activities.
Of course, this problem is not unique to environmental giving. Witness, for example, Facebook’s recent announcement to contribute $300 million over three years to support local journalism. This sounds impressive until one remembers that Facebook had $40.7 billion in gross revenue in 2017. Moreover, much of the money “given” is really thinly disguised marketing of its own products.
Even though nonprofits absolutely need to raise funds, they do need to be wary of where the money comes from and how the partnership may appear to their own stakeholders. As NPQ reported, at least one study indicated that corporate-nonprofit partnerships “might also have an unintended, negative impact on the nonprofit recipient themselves.”
There are, however, examples of corporate-nonprofit relationships done right, such as Chobani Yogurt partnering with refugee resettlement centers. The difference here seems to be corporate activism versus corporate giving. While corporate giving distances the company from the problem, corporate activism forces the company to take a stand and show that they share the same values as the nonprofit they are funding.—Sheela Nimishakavi