Changing World, Changing Funding Models, Changing NGOs

Last Tuesday I attended the BOND annual conference which brings together senior staff from the international development sector to discuss key issues impacting on the non-governmental organisation (NGO) sector.  Justine Greening was one of the Keynote Speakers and I was delighted to hear her highlighting the importance of supporting the use of new technologies, increasing civil participation/giving the marginalised a voice, stimulating entrepreneurship and focusing on the empowerment of women.  As you all know, these are all issues close to our heart.  She also highlighted the need for greater aid transparency, noting that DFID is now the world leader in terms of publishing to IATI and urging other organisations to follow suit.

There were also fascinating discussions which encouraged NGOs to think about alternative funding models including engaging the private sector, the role of philanthropists and Impact Investing.  Impact investments are investments intended to create positive impact beyond financial return.  Whilst impact investing isn’t a panacea for all development projects, this sector is rapidly growing, led by high net worth individuals.

Miles Wickstead and Kurt Hoffman, C.E.O. of The Institute for Philanthropy also highlighted the role of philanthropy in the field.  Support to developing nations has dramatically increased in recent years both in service delivery and to a limited extent in the advocacy space.   Recently there has been a growth in the number of high net worth individuals and it is predicted that they will dedicate $4 trillion to philanthropy in coming years.  Phlanthrocapitalists like Gates, Omidyar and Buffet are leading the way.  Kurt highlighted a need to pitch more innovative ideas to individual philanthropists who are becoming increasingly interested in models which combine a business and charitable approach such as social enterprises and impact investment.  Being able to measure impact is key, though philanthropists are more lenient when it comes to smaller grants and pilot projects.

The plenary session largely focused on the changing global landscape which is placing increasing importance on the G20 as opposed to the G8.  This, alongside a move towards more connected citizens is resulting in a move from hierarchies and control to networking and collaboration.  This is all resulting in the need for international NGOs to redefine their role and the panel urged them to become more challenging and explore new collaborations with the private sector and other unexpected players.  The need to move away from service delivery towards capacity building, advocacy and fundraising roles was highlighted as well as a need to significantly alter their business models.  Some also suggested greater specialisation of the sector.

Whilst the new state of play can be scary for NGOs to get a grip on, it also brings with it significant new opportunities such as new funding mechanisms and a less imbalanced dynamic between the North and South.  It was also recognised that people do prefer to fund through organisations which they know and trust.

In a changing world, inevitably the NGO space must innovate to keep up but undoubtedly their presence will remain in years to come.  What do you think NGOs should be doing differently?