NGOs in inclusive business: Contradiction or a complementarity?
This blog by the Practitioner Hub for Inclusive Business discusses why NGOs should engage in inclusive business and what role they can play. Many still think that traditional NGO work and business approaches are a contradiction. Those who think they are complementary approaches may have a simple answer: Donor money is decreasing, and there is a need to focus on more sustainable and efficient usage of resources. But additionally, NGOs have strong local networks and deep technical knowledge on, for example, local value chains. They have established relationships to various players globally, and on the ground. And most importantly, through their work, they have gained the trust of the ultimate target group of all inclusive business efforts: the local people. Nevertheless, many international NGOs are still struggling to work out how they can best leverage these assets and find their role in the inclusive business landscape. There are three major roles that NGOs play currently: 1) Partnering with companies to establish or support inclusive business models. 2) Setting up inclusive businesses of their own. 3) Acting as impact investors. All roles described are fairly new territory for NGOs, and many have hard-earned experiences from first failed attempts or various project-iterations. But also those who are already experienced players in inclusive business continue to struggle with strategy, structure, internal buy-in and managing expectations and people.
This related blog discusses how to create a successful company from an NGO program.