Barri Shorey
Senior Program Officer, Refugees
The UN High Commissioner for Refugees reports there are over 120 million forcibly displaced people in the world. That number has increased every year for the last 12 years and is projected to increase to more than 1 billion people displaced by 2050 due to climate change, conflict and crisis.
Historically, many aid agencies and donors see refugees as dependents in need of handouts. This view stifles the development of resilient and self-sustaining communities and economies. In reality, refugees are employable, hardworking, credit-worthy, and ultimately, investable. The good news is there are alternative, innovative approaches that recognize refugees’ ingenuity, entrepreneurship and ability to contribute to their host community economies.
Refugee Lens Investing (RLI) takes a new blended finance approach that invests in refugee owned and refugee serving businesses by bringing the private and public sector to the table, stretching our limited resources further while achieving more significant development outcomes.
Senior Program Officer of our Refugees initiative and Disaster Relief and Recovery program Barri Shorey explains the Foundation’s approach to Refugee Lens Investing and its potential to change the lives and futures of displaced people.
A: With the numbers of displaced people growing and needs far outstripping resources, we see more clearly that the humanitarian system is not fit for purpose. The international community continues to facilitate a traditional aid model for refugee and migrant communities that was built for short-term and immediate response and was never intended to be permanent. This model of aid has not yet shifted to meet today’s reality of protracted crises, some which are lasting decades.
To sum it up, the mechanisms and actors who would historically respond to refugee crises are either broke (the aid community), broken (the humanitarian response regime), or are burying their heads in the sand.
One thing is certain: There is no amount of humanitarian aid or philanthropy that could support this level of crisis, or this level of need. We also know the available aid is not working as effectively as it could. We need to think differently about what grant dollars, humanitarian aid, and philanthropy can do. Additionally, we need to consider what the private sector can do to address these issues and challenges.
A: We’ve been looking at refugee lens investing, which thinks about funding refugee issues and meeting the needs of refugees differently. With this approach, we consider how we can use both grant and loan dollars (blended finance) to support refugee self-reliance and the development of markets and economic infrastructure where refugees live (largely in developing countries).
The Hilton Foundation is partnering with a range of organizations, NGOs, for-profits, other donors and other investors to support funds and services that would invest in – and provide technical assistance to – businesses that are directly run by refugees, hire refugees or support products and services that serve refugees.
We provide a mix of grant dollars for technical assistance and operations and small grants, as well as working with our program related investments team to provide loan dollars for larger business investments. Partners include Acumen, Danish Refugee Council, iGravity, Kiva, Open Capital, Building Markets, Five One Labs and Refugee Investment Network (RIN), to name a few.
A: Refugee lens investing isn’t focused on the traditional direct service to an individual refugee or responding to their most basic needs. Instead, there’s an entire market systems approach, with the goal of helping businesses grow within refugee-hosting communities. This systems approach supports employment, access to goods and services, and overall building and strengthening the economies where refugees live.
What’s really unique about refugee lens investing is that it takes an assets-based approach. We don’t just see refugees as receivers of aid; we’re using their existing skills and grit to support their engagement in the economy.
Refugee entrepreneurs are some of the most successful in the world. Investing in refugees can bring back additional money to the economy and to their host communities.
A: The private sector is increasingly being recognized as a crucial partner in development, offering expertise, innovation and resources that can complement traditional aid efforts. However, despite this recognition, the public sector often struggles to engage private sector organizations effectively.
By using philanthropic capital and taking some risk, we’re trying to prove to other investors that refugees and the frontier markets where they live are investable and creditworthy, and the businesses they’re engaged in and the services and products that support them are able to make a profit.
By us taking on some of that risk with our grants, along with program-related investment dollars, we can prove what profitable businesses in refugee communities look like and hopefully attract additional investors, that bring in new money to the refugee space that hasn’t existed before. Ultimately, we hope this approach helps change the notion of what humanitarian aid can and should look like.