The political and funding landscape are changing rapidly. (I)NGOs are under increasing financial pressure, while societal challenges are becoming more significant and urgent. In our changing society, it is not only important to seek more resources, but especially to find ways to deploy resources more efficiently. On April 9, Social Finance NL and Partos organised an event on innovative financing for NGOs.

Social Finance NL colleagues Nina Berculo, Stefania Knecht-Turkanik, and Björn Vennema, together with Partos, engaged in discussions with over 50 NGO professionals. They talked about innovative financing and explored potential financing opportunities and instruments. Experts in impact investing and private sector collaboration shared their experiences, after which we looked at ways to implement this within the NGO sector.

Would you like to work together with Social Finance NL to investigate how innovative financing could help your organisation? Please contact our colleague Nina Berculo.

Innovative financing for NGOs: what are the possibilities?

Our colleagues opened the session with an introduction into innovative financing. These are all forms of financing for NGOs beyond grants. Grants alone won’t close the funding gap. Therefore, innovative financing instruments are crucial to address global issues.

We discussed various financing mechanisms, key opportunities and common challenges when implementing innovative finance. Innovative finance instruments offer new ways to enable and scale impact. This process starts with relationship building and investing in long-term partnerships.

Working with Development Investment Bonds: a practical example from ‘Educate Girls’

Alison Bukhari, International Director of the ‘Educate Girls’ programme, and Vijaylakshmi Saxena, Chief Finance Officer, shared their experiences and lessons learned from working with the first Development Impact Bond (DIB) in education. They emphasised the crucial role of flexible and risk-tolerant financing and explained how funding through a DIB reshaped their organisational approach.

‘Educate Girls’ transitioned from an input- and activity-driven model to a fully outcome-focused organisation. The programme’s success was measured based on tangible results, such as enrolment rates and girls’ learning outcomes. ‘Educate Girls’ managed to increase their implementation by 2.5 times and achieve 7 times more impact as a result of their changed approach.

Putting theory into practice

The session continued with an in-depth panel discussion and Q&A session, during which we looked further into practical examples of various funding models. The panel included the following speakers:

Key takeaways

The panel and working sessions yielded many valuable insights. These are the key lessons we learned:

  • Innovative financing is a means, not an end. It’s about working more effectively towards results. When NGOs recognize the importance of understanding their added value and achievable outcomes, they can use this to effectively attract investors.
  • Start small, think big. Invest in building strong, sustainable partnerships based on shared values and joint impact goals.
  • Learn to speak each other’s language. There is often a translation needed between NGOs, donors and investors. Understanding each other’s language and needs is crucial for effective collaboration.
  • Be prepared for change. Outcome-based working requires different structures, roles, and adopting a new way of thinking. This is inevitable in our shifting political and funding landscape.

Next steps

Building on the enthusiasm, positive feedback, and valuable input shared during the session, Social Finance NL, in collaboration with Social Finance UK, offers tailored workshops at reduced rates. These workshops will dive deeper into innovative financing, with space for focused discussions, increased knowledge-sharing, and organisation-specific advice.

We offer these workshops in various formats and are happy to discuss what works best for your organisation. Would you like to know more about these workshops and/or innovative financing, or contact us directly? Please reach out to our colleague Nina Berculo.

More information on innovative financing for NGOs

Would you like to learn more about what innovative financing is, how it works, and how it helps NGOs moving forward? Read the whitepaper ‘Navigating Uncertainty: Innovative Finance for (I)NGOs in a Shifting Political Landscape’, written by our colleagues Stefania Knecht-Turkanik, Nina Berculo and Björn Vennema.