21 | Profit or Principles

Disclaimer: The following text is based on the report by Elena Lucchi (2018), called “Introducing 'for profit' initiatives and actors in humanitarian response. Preliminary analysis of facts, trends & concerns”. The report is available on the Applied Reflection on Humanitarian Practice (ARHP) website: https://arhp.msf.es/.  

The humanitarian sector has traditionally been led by non-governmental organizations (NGOs) and non-profit organizations (NPOs). Humanitarian actors are guided by different humanitarian principles and values, including neutrality, impartiality, and accountability. However, reduced institutional funding trends have increased private sector involvement in humanitarian aid. Businesses can enhance efficiency and effectiveness, but their profit-driven motives pose ethical challenges that must be critically inspected and carefully managed.

Private sector engagement includes but is not limited to financial means. Businesses provide services, logistical support, aid goods, technological innovation. Many of those contributions have improved humanitarian response capabilities but also raise concerns about the commodification of aid. A key ethical concern is the profit-driven nature of private sector actors, which can contradict the humanitarian imperative to prioritize the most vulnerable. Businesses commonly focus on (cost-)efficiency and ROI (return on investment). When aid delivery is financially unviable, it can lead to neglecting hard-to-each population. In addition to ethical questions, coordination concern arises, because private firms usually operate outside established humanitarian coordination mechanisms. At best, this likely leads to fragmented aid responses. At worst, humanitarian action loses accountability to affected populations, prioritizing commercial viability over humanitarian needs.

Institutional donors increasingly turn to for-profit development companies (FPDCs) to implement aid programs. But streamlining the process through shifting financial and administrative tasks to the private sector comes with the risk of reducing humanitarian action to business transactions. What would keep a business to make decisions based on financial viability rather then humanitarian impact? Especially in crisis zones with limited oversight, this approach threatens transparency, as private actors are not primarily accountable to affected communities, but investors. 

On an individual level, the distinction between for-profit and non-profit gets even more blurry. Employees in both sectors receive salaries which function as financial incentives to carry out their work. Without suggesting non-profit work should not be paid, it raises an ethical question to what extend humanitarian work is commodified. Aid already gets instrumentalized for corporate benefits, in cases where actors engage in humanitarian action as part of a long-term business strategy. Such circumstances can lead to distressing situations for individuals. Personal, altruistic intentions and business interests can be mutually exclusive, leading to ethical dilemmas. 

As a potentiel attempt to address and mitigate some of the risks discussed above, humanitarian organizations must establish and reinforce clear ethical guidelines for engaging with private sector actors. Some NGOs have already introduced internal policies and/or publicly shared their position on these issues. However, a broader humanitarian sector-wide framework has not been crafted. To ensure accountability to affected populations (AAP) and to prevent the instrumentalization of aid, collaboration with private entities should be carefully assessed.

The key question remains: How can upload humanitarian principles and values while engaging with for-profit actors? At risk of over-reliance on corporate partners, is a shift away from the fundamental purpose of humanitarian aid: delivering assistance to the most vulnerable people. Market-driven priorities in the aid sector must not compromise what is central to humanitarian action: human dignity.