Almost a Year Later: The Sector Said Yes to Capital. What About Profit?

At last October's Devex Impact House event in Washington, panels covered blended finance, catalytic capital, and innovative partnerships. Speakers discussed risk tranches, first-loss capital, and return expectations, but in the panels I attended, no one addressed profit directly. The discussions I heard assumed private capital was necessary to close the financing gap. None of them said plainly how profit fits into that participation. (Devex, Missing at Devex Impact House: How profit can be purpose’s best ally, October 2025). 

In March 2026, Devex surveyed over 500 development professionals (Devex, "Is development finance failing? And how do we fix it?", Raquel Alcega, March 2026). The annual financing gap for the Sustainable Development Goals is now about $4 trillion, up 60% from the 2015 baseline. Only 6% of respondents consider today's development finance system very effective. Nearly half rate it as at least somewhat effective, while more than a third view it as somewhat or very ineffective. Published five months after my initial observations, these results indicate widespread doubt among respondents about the system’s effectiveness.

The survey also shows broad support for private finance. Over 80% of respondents consider private financial institutions critical to closing the gap, and 71% identify blended finance as the most important way to involve the private sector in development (Devex survey, March 2026). For these professionals, the case for private sector involvement is largely settled.

Blended finance is a structuring approach that combines grants, guarantees, concessional capital, debt, and equity to share risk, as described in OECD guidance. NGOs can participate as implementers, technical partners, or pipeline developers. Becoming an investable entity in its own right is a narrower role. It often requires capabilities many NGOs lack: reliable audited financials, enough balance-sheet capacity, and a record that commercial investors can assess. The Devex survey documents broad support for private capital, but it never asks about profit. It therefore cannot tell us whether respondents accept profit (or, for nonprofits, mission-dedicated surplus) as a principle within their own revenue models. My October piece was about that missing question. Calling private capital essential is one thing, but designing an NGO to create a surplus by earning money is another. The survey establishes the first and says nothing about the second.

This omission is significant given the funding context. Congress appropriated approximately $12.4 billion for global health in fiscal year 2025 (KFF, "10 Things to Know About U.S. Funding for Global Health"). This preliminary estimate does not reflect the administration's decisions to halt funding to the WHO and withhold funding from UNFPA. Appropriations do not guarantee delivery; organizations can operate only with funds they actually receive. The Gates Foundation, a major global health funder, has announced it will spend down its endowment and close by 2045 (Gates Foundation, "The Road to 2045," February 2026). A major global-health funder has now set a clear end date.

Revenue concentration is associated with greater organizational risk. Two datasets from different continents and nearly a decade apart illustrate this. A 2017 Voluntas study of 170 NGOs in Kenya and Nigeria found that organizations with four or more distinct revenue types had an 87% lower probability of financial vulnerability than those relying on a single source (Despard et al., 2017). In 2025, an Urban Institute survey of 2,737 eligible U.S. 501(c)(3) public charities offered a complementary picture. Across the covered nonprofit population, government funding accounted for 28% of revenue on average; among organizations reporting a government-funding loss, delay, pause, or freeze, or a stop-work order, it accounted for 42% (Urban Institute, October 2025). Revenue concentration does not cause funders to leave, but it shapes the extent of an organization’s exposure when they do.

Memorial Sloan Kettering Cancer Center offers an example from outside international development. It has the same federal 501(c)(3) tax classification as many U.S.-based development NGOs. It also runs a commercialization office that treats licensing its own intellectual property as ordinary business, not an ethical compromise. In 2018, under an amended license agreement that expanded a research partnership first established with Fate Therapeutics in 2016, MSK secured a documented $500,000 upfront cash payment from Fate. It also received shares then valued at approximately $4.8 million in a transaction tied to a related transfer of interest. The agreement provides for annual maintenance fees and contingent milestone, royalty, and sublicensing payments as the licensed cell therapies progress (Fate Therapeutics Form 10-Q, filed August 6, 2019). The filing establishes those obligations; however, it does not establish that Fate has since paid royalties.

MSK is not directly comparable to a typical development NGO, as it is a research hospital with resources far beyond those of most development NGOs. The relevant comparison is approach, not scale. Corporations seek returns on the capital they deploy, while a 501(c)(3) can generate revenue, license assets, and build surplus, but must dedicate any surplus to its mission. MSK's practice treats commercializing its research as compatible with its charitable mission, seeking value from commercial partners rather than avoiding the question.

The Devex survey does not reveal whether development professionals view profit as a legitimate motive, as it did not ask the question. While it shows broad support for private capital, it does not clarify whether respondents accept profit as the incentive for private sector involvement or whether NGOs intentionally build mission-dedicated surplus into their models. Almost a year later, my experience suggests this conversation remains incomplete. I do not intend to wait for another survey to address it.

Stop treating profit like something to confess. Say the word out loud in this room, and mean it as praise, not an apology.