What are some of the best ways to deal with social problems on a global scale – problems like hunger and economic development? In recent decades, many philanthropic and charitable organizations have often turned to non-profits, especially non-governmental organizations (NGOs), as the primary tool to address some of the world’s most intractable social problems. Unfortunately, NGOs’ record of success has been disappointing.

The challenge before us today, then, is to energize NGOs so they can actually realize their humanitarian missions. How? By carefully re-tooling these organizations with the latest technology and guiding them with the best innovative practices at our disposal today, we can start fresh with a re-booted version of traditional non-governmental organizations: NGO 2.0.

NGOs Today: Problems and Opportunities

The current NGO model used to address social problems on a regional or global scale is hamstrung. Firstly, non-profits are poorly configured to be successful and sustainable. Their business models are focused on raising cash; moreover, there are severe limits set on how NGOs can spend their money, which dampens creativity and flexibility. Secondly, NGOs’ potential impact diminishes with every passing year as the size and scope of social problems are increasing at a much faster rate than NGOs are prepared to deal with.

Fortunately, NGOs can be revived by current trends in business and technology. In business, “doing good” is becoming sexier than accumulating cash. Increasing numbers of MBA students and established businesses are motivated by philanthropic goals. In popular culture, the allure Gordon Gecko’s cinematic greed is being displaced by the grit of George Clooney’s real-life heroism.

In addition to this emerging shift in business culture, technological developments are making highly sophisticated business tools open to everybody, not just rich organizations. Technology solutions allow any organization to improve outcomes for producers and consumers in dramatic ways: simplifying search tools for customers; building effective ecosystems rapidly; making better choices about when to own particular business processes and when to buy or collaborate with others instead; and, performing trusted transactions between strangers by means of new payment systems. As a result, organizations can come up with better solutions to market failures more quickly than ever before.

A vision for “NGO 2.0” emerges from these recent developments in business culture and technology. More ideas and insights can be sourced from interested parties around the world to create exciting offerings. Leveraging the current interest in corporate social responsibility, entrepreneurial NGOs with economically sustainable business models can partner with big corporations (like Tata or CEMEX) to gain access to their sophisticated distribution systems. These kinds of partnerships allow NGOs to be “franchiseable” – simple and easily replicable small businesses designed to attend to a specific social need. By using the business expertise and infrastructure of a corporate partner, these franchises are also significantly “de-risked” because they can bypass many of the early-stage difficulties encountered by most start-up organizations.

The Hult Prize: Making NGO 2.0 a Reality

At Hult International Business School, our contribution to promoting NGO 2.0 is called the Hult Prize. It begins with an innovative crowdsourcing approach, that calls on the next generation of business leaders to develop social businesses around a given social challenge. This year, the focus of the competition will be to find ways to combat global hunger. The topic has been personally selected by President Bill Clinton, who has collaborated with Hult to identify the most pressing global social problems to target as the theme of the annual Hult Prize.

Unlike conventional start-up and case competitions, The Hult Prize integrates world-class training and mentorship into the competitive process. The competition begins by bringing together college and university students from more than 350 universities, representing over 130 countries. Working in five-person teams, these students compete for the opportunity to spend the summer at the Hult Accelerator – powered by the IXLerator run by the Center for Innovation, Excellence and Leadership (IXL Center), a global innovation management advisory firm. Over two months, the Accelerator will give the best six teams a chance to work with a number of successful business leaders and established social entrepreneurs, including the likes of Muhammad Yunus. It will also provide teams with mentors to help them to refine their business concepts and to identify the best means to scale-up their operations if successful. The winning team, chosen by President Clinton and Clinton Global Initiative executive members, will secure $1 million in seed funding to start their new social business.

The Hult Prize will enable a nascent NGO to strive for the same kind of dramatic impact that many for-profit corporations have found through working at the IXL Accelerator: coming up with bigger and bolder outputs that are faster and cheaper than ever before. In the case of NGO 2.0, the output will be creating for-profit micro-franchises that will serve and empower the very people who need help the most: those billions of potential entrepreneurs who are often languishing at the bottom of the economic pyramid. The Hult Prize has certainly positioned itself as a real force for social good.

Hitendra Patel is Global Professor of Innovation and Growth at Hult International Business School, Managing Director of the IXL Center and Board Member at the Hult Prize. Article published by the Huffington Post here.

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