PHOTO CREDIT: THE LEMELSON FOUNDATION
Foundations want their investments to make a measurable difference in the lives of the poor. Investing in small and growing businesses promises outsized returns. SGBs not only supply low-income communities with needed services, such as electricity, safe food, and health care. They also act as employment engines, bringing jobs and incomes to people who critically need them.
BY HELPING THEM, THE FOUNDATIONS CAN:
MAGNIFY DEVELOPMENT IMPACT. SGBs on a growth path have the potential to create hundreds—even thousands—of jobs in their communities, and deliver services to many times more. Achieving these results at scale depends on the kind of patient support that foundations are in a unique position to provide, and which enables SGBs to develop the skills, resources, and technology they need.
CATALYZE A SECTOR. SGBs working alone in nascent sectors find it difficult to scale, no matter how good their product. Foundations play a role in building critical sectors by selecting and supporting a portfolio of SGBs delivering complementary and competing solutions. Such support not only helps increase the number of SGBs in the sector, it also provides a ready audience to benefit from infrastructure developed by the foundation.
MAKE A UNIQUE DIFFERENCE. SGBs are an underserved group, and the environment for SGB prosperity is still immature. There remain vast opportunities for foundations to establish themselves as pivotal contributors to creating an SGB-friendly environment.
Want to help small and growing businesses?
Take the first step. Foundations play a critical, early role in supporting new ideas or sectors that cannot yet attract public or private capital.
Build Market Infrastructure. Drive impact by identifying barriers to scale and creating the markets or the infrastructure needed to fill it.
Leverage. Foundations contribute far more than their in-house financial resources. Use an investment to generate more funding, offer public support, and make connections.