The social, environmental and impact expertise NGOs bring to the table is a key ingredient in a blended finance transaction. With boots on the ground, NGOs have a more realistic picture of what the target beneficiaries need and understand how to measure effectively. As a result, they play a critical role throughout the process – from design to implementation to evaluation.
Take gender equality as an example. Any blended fund that wants to invest in women empowerment needs an expert NGO to advise on mainstreaming gender equality across the fund’s operations.
One case in point is the CARE-SheTrades Impact Fund, a blended fund aiming to invest in growth-stage companies that champion gender equality in South and Southeast Asia. The fund brings together NGO CARE, asset manager Bamboo Capital Partners, and the UN agency International Trade Centre (ITC). In this case, CARE brings its expertise in building gender-just businesses, ensuring that the outcomes the Fund supports are indeed gender-transformational.
“When an NGO partners up with an investor, the NGO often acts as an impact amplifier,” says Mauricio Rincon of Opportunity International. “Ultimately, the investor gets higher value for money – not just in financial terms but also in terms of impact.”