Types of Partnerships

Given the wide variety of motivations, companies, and sectors involved, public-private partnerships can take many structures. After years of engaging in them, we’ve identified a few as the most workable. For all of these partnerships to work, available Feed the Future funding must be identified.

While many partnerships are carried out through USAID and its Missions, opportunities do exist with Feed the Future partner agencies.

1. Embed within an Existing Program
SUMMARY

Private sector contributes funding and/or in-kind resources for an existing Feed the Future project. Modifications to programs may or may not be an option.

PROS
  • Feed the Future already has approved funding, so process is accelerated
  • Project offers existing infrastructure
  • Results evident in less time
CONS
  • Project activities may be largely predetermined, limiting strategic linkage to company’s objectives
2. Competitive Grants Program
SUMMARY

Private sector submits proposal to implementing partners (i.e. NGOs) in response to a request for a sub-award, which will address a specific aspect of a larger activity. This is not considered a new award and is handled entirely by the primary implementer of the overall partnership. The sub-award provides initial funding to get a new partnership with the private sector started quickly.

PROS
  • Allows for more rapid assessment and start-up of program
  • Satisfies public sector’s required competitive process
  • Feed the Future personnel bring technical expertise to the table and are engaged in decisions on program design, objectives and activities of the sub-awarded work
  • Accommodates flexible level of involvement by company
  • Requires limited logistical burden
CONS
  • Once grant awarded, U.S. Government and private sector partners have less influence and control over implementers and project direction
3. Application via USAID’s Global Development Alliance Annual Program Statement (APS) Summary
SUMMARY

USAID invites private sector actors to identify and suggest ways we can work together to address key challenges in the developing world in ways that advance our respective interests and objectives. The APS provides USAID a means of supporting and funding activities that are developed in collaboration with the private sector and implemented by a third party.

PROS
  • Satisfies public sector’s required competitive process
  • Allows flexible corporate involvement
  • Allows for innovative proposals with new ideas
  • Affords opportunity for high level of engagement in program design, objectives and activities
CONS
  • Lengthy start-up time since a new procurement (often almost a year)
  • Potential for limited private sector control over objectives and activities
  • Limited control over technical direction of implementers using U.S. Government funding once grant is issued
4. Loan Guarantees
SUMMARY

Loan guarantees allow the U.S. Government to assume a percentage of a private debt obligation if the borrower defaults. Feed the Future loan guarantee programs are established to correct some type of perceived market failure by which borrowers, often smallholder farmers regardless of their creditworthiness, lack access to the credit resources available to large borrowers.

PROS
  • Banks more willing to make agriculture loans
  • Government backs 50% or more of loan, depending on agency
  • Can explore new markets under safety of a credit guarantee
  • Historical default rate on USAID Development Credit Authority portfolio only 1.75%
  • Guarantees are backed by the full faith and credit of the U.S. Treasury
CONS
  • Can take up to 6 to 12 months to establish
5. Joint Solicitation (Request for Applications or Proposals)
SUMMARY

U.S. Government and private sector partners co-design a request for applications (RFA) or proposals (RFP) to secure a third-party implementing partner for a project. Private sector partner enjoys full participation in applicant review process. Private and public sectors pool funding, with private sector partner putting in a large amount of funding.

PROS
  • Opportunity to choose implementer from group of applicants based on their capacity and project idea
  • High level of input and engagement in design and direction of project
CONS
  • Lengthy and potentially complex and highly-regulated process
  • Significant advance planning required
IN PRACTICE

There are no active Joint Solicitation Agreements in effect at this time. This type of partnership is relatively rare.

6. Collaboration Agreement
SUMMARY

The collaboration agreement is a flexible tool used by USAID to reach out to all non-traditional partners, including the private sector. This tool allows USAID to enter into "other transactions" beyond traditional contracts, grants and cooperative agreements. Resource partners—including corporations and foundations—can offer expertise in research and development, marketing and distribution, market, and intellectual property. Funding goes directly to private sector company.

PROS
  • Private sector retains program and administrative control
  • Fewer regulatory requirements than a traditional award
  • Joint planning and strategic design
CONS
  • Extremely long process
  • Extensive logistical burden
  • Rarely used by the U.S. Government
  • Legal requirements and reviews can be time consuming to process

 

IN PRACTICE

There are no active collaboration agreements in effect at this time. This type of partnership is relatively rare.