International NGOs (INGOs) stand at a critical juncture. Conversations with INGO leaders reveal that many are unprepared for the disruptive shifts on the horizon. Close donor relationships and high opportunity costs associated with pursuing innovations have created an INGO version of the innovator’s dilemma. How can INGOs capitalize on their distinct assets to stay ahead of the curve and meet the global challenges of tomorrow?
Section 1: Disruptions Facing the INGO Sector
Disruptions—including complex global challenges, businesses becoming development agents, technology, a fragmented funding landscape, and new competitors—call into question INGOs’ distinct role and relevance.
New, complex global challenges
Today's challenges cut across issues and geographies. Noncommunicable diseases; large-scale demographic shifts; and regional water, food, and energy issues require emergent, systems-level approaches. 80% of INGOs surveyed rank global challenges requiring new approaches among the most important issues facing their organization.
Rise of business as a development actor
Companies are becoming development actors as they recognize the power of emerging-market consumers and the importance of secure supply chains. Most INGOs see corporate partnerships as a way to diversify funding, not scale and sustain impact.
Empowerment of individuals
Technology is also enabling the public in developed countries to directly engage with issues and individuals in low- and middle-income countries.
Increasingly fragmented funding landscape
As traditional aid funding declines, funding to non-INGO partners is on the rise. Over 80% of INGOs surveyed seek funding diversification, but most still rely on US government funds. Emerging economies represent less than 0.5% of non-US government funding.
Competition from new players
Local NGOs and social enterprises now challenge the hegemony of INGOs. The USAID Forward agenda promotes local partnerships, shifting from its previous reliance on INGOs. Other donors, such as DFID, are expanding local NGO relationships as well.