When you think about impact investing, international nongovernmental organizations don’t usually come to mind. You might rather picture private investors, fund managers, and Wall Street types looking to make a buck or two while creating impact.
NGOs are typically more focused on implementing aid programs than on investing in businesses and earning returns. But in reality, a group of NGOs have been involved in the impact investing sector for about a decade, motivated by a desire to fill market gaps, better drive impact, and diversify funding streams.
Their entrance into the market has sometimes been met with skepticism, either internally or externally, with some questioning whether NGOs have the right skill set or knowledge, and whether they actually have something different to offer than more traditional players. When they jumped in, NGO leaders argued that they were well positioned to take certain risks and that their local networks and knowledge could be a real benefit to companies they invest in.