Right now, the world is facing complex, severe, and accelerating challenges. Solutions to these challenges require us to simultaneously transform economic, social, and environmental systems to ensure the long-term sustainability of people and planet.
The public sector and the private sector have significant and complementary resources and levers to help make those transformations. Partnerships between these sectors, along with civil society to ensure they meet the needs of people, have the power to change systems. However, such partnerships have significant barriers preventing them from happening. This is where the role of philanthropy can be so vital in providing the ‘activation energy’ necessary to spark and drive forward these collaborations, through Public Private Philanthropy Partnerships.
About the report
While philanthropy is already partnering to a certain extent with the public and private sectors, we believe it is still scratching at the surface of the global potential of PPPPs. This research forms the first phase of a major programme which aims to influence sector practice to scale up the use of PPPPs. The report, undertaken alongside our collaborators, the World Association of PPP Units & Professionals (WAPPP) and a global network of regional philanthropic organisations, sets out to:
- make sense of the landscape of PPPPs and provide new conceptual clarity around how they combine multiple ‘levers’ to deliver transformation;
- understand fully the role of philanthropy as a driving force to make them happen;
- illuminate good practice from examples of effective structures, models, and approaches;
- inspire and motivate more PPPPs to be developed.
The learning comes directly from the voices that we heard in interviews and the insights flowing from 46 examples of PPPPs from across the world and many different sectors. Context is added from TPI’s experience of studying and supporting multi-stakeholder partnerships for 20 years. A library of PPPP examples has been built to serve as a repository for some of the extraordinary work currently being undertaken.
We define a Public Private Philanthropy Partnership (PPPPs) for People and Planet as:
A long-term multi-stakeholder collaboration in which public, private, and philanthropy sectors align and combine their unique resources and powerful levers to together deliver social, economic, and/or environmental transformation.’
A PPPP has at least one organisation from each sector – public (including governments, development banks, and multi-lateral system), private (including companies, investors, and social enterprises), and philanthropy – and is a collaborative and co-creative relationship. It can be global, regional, national, and local, and have any theme that contributes to sustainable development. Importantly, all partners must be playing their societal role (for example, business providing philanthropic funding does not count as a private sector partner). These partnerships will often include other partners, most notably civil society, providing an essential part of the puzzle.
The PPPPs included in the research sample were chosen because they are transformational in their impact or have the potential to be so in the future.
What can PPPPs achieve?
PPPPs are able to respond to significant social and environmental challenges, creating scalable projects that are often investable with public and/or private capital. By bringing together the unique resources and levers of public and private (see below), PPPPs are able to deliver interventions that address deep-rooted issues or inefficiencies and can transform systems to make them more equitable, sustainable, or effective. We define systems change as:
Moving from an unsustainable (in economic, social, or natural resource usage terms) situation to a more sustainable ongoing situation delivering for People and Planet. Transformational change leaves behind a self-sustaining, resilient legacy where little or no further action or ongoing external inputs are necessary.
One of the most exciting features of PPPPs is that they can enable businesses and investors to act in a fully commercial way, supporting private sector-led growth or business solutions to environmental problems, that are not limited in scale by the amount of public or philanthropic funding available. Indeed a key finding of the report is that any funding provided by philanthropy is catalytic in nature, supporting the PPPP to unlock financing to deliver the system change.
The research demonstrates how the PPPP mechanism can be an extremely flexible and adaptable one. The following provides a snapshot of just a few areas where PPPPs are able to deliver transformation. PPPPs may:
- Unlock investment in infrastructure, for example through blended finance, for net-zero energy production;
- Change the rules and norms that influence or define how we use resources in order to develop sustainable infrastructure and a healthy environment in which to live;
- Raise standards in education and health through innovative finance mechanisms that optimise how public funds are used;
- Enable more equitable, resilient, and sustainable supply chains by bringing actors together from across the sector;
- Extend access to vital services and livelihood opportunities by de-risking investment in the infrastructure that is required;
- Provide a demonstration of pro-development business models that can be scaled commercially, where a company or investor had assumed would not be possible.
The essential role of philanthropy in activating PPPPs
While public-private collaboration has enormous potential, all but the simplest partnerships are challenging to develop and deliver. They require a complex mix of financial and technical expertise, overcoming cultural friction, trust-building, visioning, deal-making, attitude-shifting, financial pump-priming, long-term commitment, and potentially deep knowledge and engagement with communities. There can be significant risks for those involved, and even where the business case and return on investment are clear, any major change always needs to overcome significant inertia.
|BARRIERS and the activation energy required to overcome them
This is where the role of philanthropy can be critical in building momentum, solving problems, and helping the partnership to overcome the barriers to success. We term this the activation energy, appropriated from the scientific term meaning the initial energy that may be needed for a chemical process to start.
The six key roles of philanthropy to activate PPPPs
The research found philanthropy can inject the activation energy required in six main ways:
- Initiating/convening the partners, taking them through a partnership development process, and potentially coordinating the partnership’s activities, bringing credibility as a connector, and enabling dialogue among partners;
- Cocreating and codesigning PPPPs with the public and private partners and, if appropriate, with peer organisations;
- Initial and catalytic funding of a PPPP’s set up and running costs (but not the cost of implementing the transformation);
- Capacitating partners to be able to play their roles in the PPPP and accelerating progress with technical assistance. Philanthropy often brings the technical expertise to develop new models and can support partners as they adopt new ways of working;
- De-risking a PPPP for other partners such that it can tackle the most difficult challenges and then reach large scale by mobilising mainstream private sector investors;
- Enabling PPPPs to be able to test and learn through multiple iterations of a solution, and by prototyping innovative ways of working.
Philanthropic organisations are very flexible as to which roles they play according to need, context, and maturity of a PPPP. As the situation demands, philanthropy is ‘doing whatever it takes’ to make change happen by drawing from the extensive menu of options open to them.
Levers of system change
Transforming or rewiring systems involves using a range of levers from public, private and philanthropy applied simultaneously or sequentially. The PPPPs in the sample have many varied and often unique features and use a variety of different levers to deliver change. The framework used to analyse PPPPs in this research identifies the following three kinds of levers:
- The system-level levers that capacitate, connect, influence, and reorient the different entities within the system;
- The boundary condition levers that change the environment in which the system sits in a significant way, such that the actors in the system adjust their behaviours and practices;
- The innovative finance that enables the application of the above levers or can take approaches to scale.
The following framework captures the main levers of change that we found:
|Most common system levers used by PPPPs
The three most common system-level levers in PPPPs are:
- Education, skills, and capabilities: Improving education, skills, and capabilities creates a new resource and allows people to tackle challenges in new ways;
- Organising and connecting: Bringing organisations together enables synergies, economies of scale, and increased power for small actors;
- Commercially viable approaches: Inclusive business and market-based approaches can scale as they are economically sustainable and internally funded.
The three most common boundary condition levers are:
- Infrastructure: Developing infrastructure creates new opportunities for people and businesses, can reduce cost, provide infrastructure for essential services, and reduce damage to the environment and climate change;
- Rules and norms: Governments can change policies, regulation, or taxation to promote more sustainable or equitable value chains, or to create new social systems. Business and government can together create new standards for products and production;
- Institution building: Support to public sector institutions to deliver their mandates more effectively can provide the conditions needed for system change.
While infrastructure is the lever in the sample most utilized by PPPPs, the majority accessed at least two levers, with a wide variety of structures, making them a highly flexible instrument. The table below illustrates the most frequently used combination of levers in the 46 PPPPs we analysed.
|Most common system lever combinations used by PPPPs
Infrastructure + rules and norms (8 PPPPs)
The PPPP piloted a new way for the municipal government in the town of Messina, Italy, to address the low quality of housing in parts of the city. It created an integrated new model working with public partners and social enterprises that unlocked public funding for new, housing and urban regeneration, developed in collaboration with the local community.
Infrastructure + commercial viability (4)
4B4B4BExample: Digital Access for East Carroll Parish
The PPPP enabled an internet service provider (ISP) to overcome the company’s perception that it would be unprofitable to install the infrastructure for internet provision because of lower-than-average incomes in this community. A business model was developed for the ISP to put in place commercial provision of digital health, education services, and employment opportunities through fees from consumers.
Innovative finance + infrastructure (4)
5B5B5BExample: Just Energy Transition Partnerships (JETPs), South Africa
The JETP mechanism provides a link between large-scale finance being made available to address climate change and national priorities and plans. The JETP South Africa will support the government and private sector to decarbonise electricity production infrastructure, targeting primarily the reduction of coal-based power generation.
Finance + capacity development (3)
6B6B6BExample: Quality Education India Development Impact Bond
This PPPP worked in the education systems in three States in India with the aim of improving learning outcomes for children. Investors provided risk financing, with the expectation of securing a return on their financing if the educational objectives were achieved. Philanthropic organisations provided funding to repay the investors, to prove the worth of this model to the public education authorities.
While not the main focus of this phase of research, the following findings have begun to emerge about key success factors for PPPPs.
The research demonstrates the need for PPPPs to incorporate four key building blocks to deliver effective, efficient collaboration:
- Fundamentals: alignment of interests, a shared vision, sufficient compatibility of partners, and the potential for significant value creation are the underpinnings of any partnership.
- Partner relationships: trust among partners, a clear process of working together, and valuing what each partner brings to the table are all important to PPPPs, as is mutual accountability for achieving objectives.
- Structure and set-up: PPPPs should be fit for effective collaboration between public, private, and philanthropic actors. Difficulties can arise when the burden falls unequally to one partner to keep the PPPP on track. Legal hurdles and bureaucracy can also be significant barriers to progress.
- Management and leadership: Managing PPPPs, as with any partnership, goes well beyond typical project management, requiring new approaches to engagement and relationship management; ongoing monitoring, evaluation, and adaptation; exemplary communication; further, committed, collaborative leadership is essential to provide the necessary drive.
An enabling environment for PPPPs
Some emerging findings for what may contribute to an enabling environment for PPPPs are:
- Legal and regulatory support: PPPPs require a legal and regulatory framework that encourages, and supports these partnerships and gives public sector permission to act;
- Capacity building: Building the capacity of public, private, and philanthropic sector entities involved in PPPPs is vital. This includes providing training, sharing knowledge, and offering technical assistance to enhance both their technical and partnering capabilities.
- Stakeholder engagement: Systems for engaging relevant stakeholders, such as local communities, civil society organizations, and other affected parties.
- Standards: Sharing knowledge and experiences about good practice standards among different stakeholders involved in PPPPs is helpful.
Join us in the next phase!
In the next phase of this ongoing programme, we will undertake a needs assessment to understand what it will take to optimize and mainstream PPPPs. Further, we plan to work with a number of new and existing PPPPs to support their development and draw out learning from the experience as we codify effective practice and develop guidance. Finally, we will continue to develop the community of PPPP practitioners to exchange knowledge and experience.
More long-term, we aim, together with WAPPP and our global support network, to build partnering capacities across public, private, and philanthropic organisations and develop a global PPPPs support infrastructure.
The PPPPs Library (see below) will continue to be updated and your entries are welcome.
To discuss your potential involvement, please contact Max Abendroth (firstname.lastname@example.org).