The pros and cons of business in the not-for-profit sector

With the private sector becoming more involved than ever before in international development, relationships are changing between development actors, donors and beneficiaries. Amira Aleem, herself the founder of a social enterprise, attended the annual conference of NGO RESULTS UK to explore some of the ethics surrounding the business trend.

 

In response to a global trend of consumers becoming more conscious and demanding of sustainable profits, businesses are aiming to expand the social portfolio of their work, as seen by the rise of the social enterprise model and corporate social responsibility.

Since entrepreneurship creates wealth, jobs and economic growth, it seems a natural step to translate the skills and expertise of the business world to the aid industry, to make it more efficient and systematic, and to generate the wealth needed to lift economies out of long-term poverty. Businesses, too, are beginning to see the commercial value of stepping into traditionally charitable fields, with some exciting – but also worrying – consequences.

Afghan girls wait for a National Afghan Police shipment of humanitarian aid to their village. Could this be considered an example of ‘poverty porn’? © ISAF Media/Creative Commons license

When the fundamental motivation for providing aid becomes a commercial interest, it questions how these two sectors can be reconciled. For instance, in business, the branding and marketing of a product is crucial to attract customers. This practice becomes complicated when superimposed onto the non-profit sector. Here, ‘selling’ an issue – often by visual means – can border on exploitation of the most vulnerable, representing them as needy and desperate: a phenomenon frequently referred to as poverty porn.

Mama Hope and Radi-Aid have campaigned for the representation of people receiving aid to be respectful and not play into stereotypes of poverty. But since public empathy is such a key consideration in marketing a social issue, there is conflict on how best to ensure that the private sector does not compromise the ideals by which aid is given in the first place.

At the RESULTS UK Conference held in London in May 2014, Nick Dearden, Director of the World Development Movement, discussed the case of Invisible Children’s KONY 2012 viral video, which created a massive but short-lived social media flurry surrounding the mass murders and kidnappings committed by the Lord’s Resistance Army in Uganda. The video was later criticised for leading to large numbers of people sharing, tweeting and liking the video without much understanding about the Ugandan political situation or Invisible Children’s policies and spending. It is vital then, he argued, that coverage does not sensationalise development efforts through clever advertising, but rather builds awareness based on fact. Building a layer of accountability and transparency behind large campaigns in this way is the challenge for the private sector going forward.

Also at the RESULTS discussion was Saoirse Fitzpatrick, student Stop Aids campaign coordinator, who insisted that the need for the private sector to get involved is not an option, but crucial for development. She used the example of HIV/AIDS vaccines, the development of which is a notoriously lengthy and expensive process that only large pharmaceutical companies have the capacity to undertake. Currently, companies file patents on new drugs, reserving the right to produce it for the first twenty years. It is only after this time elapses that generic companies are able to enter the market and mass-produce the drugs at a low cost, losing crucial time in dealing with something as large as the global HIV/AIDS epidemic.

The generic manufacturers act as essential competition in lowering the cost of life-saving anti-retroviral (ARV) medicines, allowing the product to be made more easily accessible to people all over the world. It is therefore essential for the development sector to make alliances with private sector pharmaceutical companies early on, and encourage them to produce life-saving medicines at a low cost. It will also be crucial to work with generic drug companies, in order to distribute and provide access to medicine in the following years.

Julia Fan-Li talks at the RESULTS UK Conference 2014. © RESULTS UK

Julia Fan-Li, Director of Lion’s Head Global Partners, also threw light on the need for private sector investments to mobilise funds for development. By providing a creative approach to financing healthcare innovations, the Global Health Investment Fund provides a platform for investors to finance late-stage health innovations, which have the potential to provide emergency relief to people in low-income countries around the world. As World Bank President Jim Yong Kim has said, ‘It shows that we can align the needs of investors with the need for cures for diseases which cause so much suffering in developing countries’. This thinking is revolutionary because it bridges the gap between new markets for pharmaceutical companies, much needed seed finance for start-ups and the growing demand for low-cost innovative health interventions in developing economies.

The international aid landscape is changing, and the need for ongoing dialogue is the only way to ensure responsible, creative collaboration between its many actors. Discussions like the RESULTS UK conference in London are excellent ways of bringing together people from across the development spectrum around a common theme. As we have seen, the use of business skills in a development context throws up a range of new and exciting possibilities that challenge conventional knowledge of how best to provide aid. The test is in ensuring that the desire to create profit does not come at a cost to the very people these initiatives are trying to help.


The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.

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