Private Sector Could ‘Shut Out’ Nonprofits


LONDON, England — According to a report published Wednesday by the Overseas Development Institute, the private sector is so critical to disaster relief efforts that nonprofit organizations that do not engage with private businesses risk being “shut out” of emergency response interventions.

The report, which examined disaster relief in countries such as Kenya, Jordan and Haiti, argues that the private sector plays a vital and growing role as a service provider, innovator and long-term economic re-builder.

The research asserts that businesses which tackle disaster relief with economic gains in mind are more helpful to people affected by crises than relief efforts run by charitable or nonprofit organizations. Furthermore, businesses are often the first responders to major crises.

The report says that businesses “help get goods to affected people, reopen lines of credit, and enable livelihoods to resume” simply by investing in restoring their own damaged supply chains, firms and enterprises.

Going forward, it may be crucial for aid groups and businesses in the private sector to interact in order to effectively bring relief to those in need. As of now, poor communication, misconceptions and a lack of interactive opportunities have mostly prevented the private sector and nonprofit aid groups from working together. This is especially true in middle-income countries where the private sector has already established a strong presence.

This is not to suggest that aid organizations do not interact with the private sector at all. The World Food Programme, for instance, estimates that approximately 40 percent of its spending goes directly to private businesses for aid supplies and services.

However, distrust is still a barrier to full collaboration between the two entities. Part of this may be due to the sense that the private sector is posing a threat to nonprofit relief efforts.

“If [humanitarian groups]do not begin to draw upon the private sector and their capabilities, there is a real chance that businesses will approach these issues independently,” said Steven Zyck, the report’s co-author and research fellow at the Overseas Development Institute. “By engaging with [the private sector]more, [aid organizations]would reduce the chance they become less relevant.”

The technical experts from the private sector and nonprofit aid organizations, respectively, rarely communicate with each other in an effort to collaborate. What usually happens is that fundraising staffs from one side meet with the fundraising staff of the other side.

More communication would help each side understand the other’s motives, says the report.

The U.N. Office for Coordination of Humanitarian Affairs recently deployed for the first time a private sector liaison link following Typhoon Haiyan. Contacting this organization is one way in which nonprofit organizations may link up to efforts by the private sector.

Linkages like these may help address the knowledge gap in advantages that each side can bring to the table. If aid organizations would be more willing to work with for-profit businesses going forward, the efforts may benefit all involved.

Paige Frazier

Sources: Devex 1, Devex 2, ODI 1, ODI 2
Photo: Melanie Simons


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