Missing at Devex Impact House: How profit can be purpose’s best ally

On Oct. 16, I spent an afternoon listening to thoughtful panels on blended finance, innovative partnerships, and catalytic capital at Devex Impact House, on the sidelines of the World Bank annual meetings in Washington, D.C. The concept of “return on investment” was undoubtedly part of the conversations, but what I wanted to see more of is a deeper, more candid discussion about profit itself. For an occasion so invested in engaging the private sector, development groups and NGOs were hesitant to hint at a key element of partnership with the sector — the very purpose for which private enterprise is founded: Seeking profit through value creation. The silence saddened me. It indicates a greater problem in global development organizations: They may support the idea of partnering with the private sector while being morally uncomfortable with attaching themselves to a for-profit motive. Yet what enables such partnerships to work is a mutual benefit that, in the case of any corporation, is based on making a profit. The paradox of partnership When discussing development, I hear NGO leaders talk about “mobilizing” private investors as if they were some forces waiting to be summoned and directed. The private sector is, in fact, a system of incentives, risks, and opportunities. Companies don’t participate in development projects altruistically; they enter when they can envision earning profit by solving real problems. Failing to address that fact doesn’t make collaboration purer; it makes it weaker. If NGOs want businesses at the table, they must design ventures that allow those businesses to succeed on their own terms, while advancing social goals. Failing to do so could lead to NGOs putting energy into another donor-funded exercise in wishful thinking. Profit as a uniting factor The dangers NGOs are now facing with climate change adaptation, health resilience, and digital inclusion require a scale of investment that philanthropy can never fund. Standing by outdated traditions, NGOs are doomed to repeat pilot projects that never scale and programs that die when the grant expires. Profit and compassion are not mutually exclusive. When profit enables empathy, it ensures compassion. The responsibility of the private sector isn’t to be good; it’s to make money and thus be sustainable. The role of the development community is not to avoid markets, but to help shape them, so goodness and viability feed on each other. Profit is the most telling indication that value’s been created and shared ethically. Every time a customer willingly pays for a product or service, they signal that it adds real value to their life. Profit can fuel reinvestment, innovation, and viability long after grant dollars run out. History shows this clearly. From the Industrial Revolution to mobile money and affordable solar energy in Africa, market-based enterprise has contributed to lifting millions out of poverty, perhaps more than any government program or grant ever could. Aid saves lives; profit makes livelihoods thrive. Sadly, at Devex Impact House in Washington, D.C., discussions about NGOs teaming up with profit-generating ventures were not prominent — perhaps profit is a betrayal of ideals for most NGOs. Conversely, for many corporations, talking about profit in a development discussion can be considered bad etiquette. I saw both types of stakeholders tiptoe around the word that can unite them and create possibilities. From mobilizing to cocreating What if NGOs stopped approaching the private sector primarily as funders and started engaging them as coarchitects? NGOs offer relationships, community trustworthiness, and policy literacy; corporations offer investment discipline, efficiency, and operational know-how. They work together to build markets that generate good money by doing quality work. This model is already viable. Consider PATH’s vaccine vial monitor technology, developed by an NGO and brought to market through licensing to private companies such as Temptime. A donor-financed innovation became a global success, a profitable product for commerce, improving vaccine safety, and ensuring commercial returns. It’s an example of co-creation — nonprofit ingenuity wedded with private-sector scale. Or look at Gavi’s pooled vaccine purchasing model. When NGOs and suppliers coordinate procurement, production, and delivery based on shared demand forecasts, they reduce waste, stabilize prices, and improve health outcomes, thus creating both financial and societal returns. That’s not a moral compromise; that’s intelligent systems change built on a profit-serving purpose. Dare to sell and make a profit Many NGOs have valuable resources, such as local knowledge, field data, behavior insights, and networks, which private firms spend significant amounts of money to build. By taking a collaborative or ethical market-based approach, NGOs can use those resources to create new revenue streams while advancing their missions. This can take the form of licensing de-identified data, sharing aggregated insights with partners, or building social enterprises that invest profits in community programs. Fairtrade International leads by example. It certifies the FAIRTRADE label to producers that pass its test, collects fees to subsidize the producers, and creates measurable commercial value. The label creates measurable commercial value; field experiments in U.S. grocery stores found that Fair Trade labeling increased coffee sales by 10% when the label was on the package. A profit-with-purpose framework For NGOs and the private sector to actually collaborate, they must incorporate the for-profit element from day one. That means embracing such principles as: 1. Aligning incentives at the outset. Reward companies only when the project creates tangible social impacts — such as more patients treated, clean energy sold, and girls educated. 2. Boosting transparency. Release co-created scorecards that report on financial and social performance in equal measures. Profit is legitimate only when its effect is made visible. 3. Paying for value creation, not virtue. Replace grants with revenue-share deals or outcome-based contracts that reward measurable results, not good intentions. This model redefines relationships: Corporations shift from donors to co-owners; NGOs shift from recipients to partners. Both have a stake in both parties’ success. A crisis and an opportunity With development finance institutions and donor governments reducing budgets, NGOs must make difficult choices. But it is also a crisis with an opportunity: Rethink the entire global aid architecture. What if NGOs were market-makers instead of grant-takers? What if they partnered with businesses generating good returns to address public issues, with profits fueling access, not inequality? What if “impact economy” were not just buzzwords, but real, quantifiable impacts? That change would take courage — new legal foundations, new partnerships, new comfort with risk. But it would also lead to more creativity and capital than ever before. When purpose and profit get together, both benefit, and so does the public. Next time NGO leaders gather at events such as the one at Devex Impact House, let’s be bold enough to call the most significant force for improving the lives of billions of people by its proper name. Let’s talk about profit openly.