The need for developing Entrepreneurial Skills within the RCRC Movement has evolved over the last years through changing conditions regarding demography, human development as well as operating and financing models of the public, non-profit and private sector.

In 2020 AutRC therefore launched the Business Skills and Enterprise Development pilot project REDpreneur, focusing on the health sector in the target regions of East and South East Europe and the South Caucasus. Three main factors for change were identified, a) growing ageing societies which put health systems under increasing pressure to manage the rapidly increasing cost of healthcare and a re-distribution of roles between state, COSs and private sector b) substantial growth of income and purchasing power in the past years c) changes in the development funding architecture, such as the private and finance sector as new actors and competitors as well as the increasing need of RCRC Movement and other CSO partners for more financial sustainability.

The REDpreneur pilot project aimed to initiate and support a paradigm shift within RCRC Movement and CSO partners towards understanding, considering and applying market-based approaches to tackle social issues in the areas of health and social services. It developed, tested and refined a capacity building programme that empowered RCRC Movement and CSO partners to incubate social enterprise business models for health and social services that prioritized transformative social impact, while striving for financial sustainability by generating revenues through a mix of funding. The interest for the REDpreneur pilot program was higher than expected. Not only from the target regions of East and South East Europe and the South Caucasus, but also in further focus regions of the AutRC and beyond.

Following these trends, shifts and changes in operating structures are visible. Public development actors have increased their focus on leveraging development funds through private investments, intending to increase their impact and scale and contracting increasingly bigger budgets. In the Red Cross movement there are visible traces of a heavy donor dependency era over the last 10-20 years. It is realized by now, that relying solely on short term and project based external donor funding has developed into an unsustainable business model making them to a certain extent weak in their organisational and financial position and hindering strategic and long-term development of a healthy organization.

An IFRC global consultation process has pointed to the fact that many Red Cross / Red Crescent National Societies suffer from weak financial sustainability amongst others due to systematic reliance on short term external donor project funding. At the same time there are emerging trends in the focus regions of the AutRC (East Africa, East and South East Europe, South Caucasus), where national governments are starting to outsource governmental services such as emergency medical and health and care services to the private or non-profit sector. There is a higher need and demand of professional and well-organized services in the population, as the middle class is growing, and income is increasing.

That gives CSOs the possibility of addressing a new target group with high quality paid services, thus diversifying their income sources.

In this time of new opportunities, non-profit organizations have a unique chance to establish themselves and provide social services to the population paid by a mix of financing sources to be discovered and to anchor one or more pillar of their organisations mission in a sustainable market driven business. REDpreneurs goal is to evolve new business models, that enable them to be self-reliant and financially sustainable at least in one core activity, thus stronger in providing other types of humanitarian support needed in their country.

Challenges recognized are:

• Multiple global risks and the increase in complex and protracted crisis brought on by demographic change as the increasing frequency of disasters and conflict as well as the climate crisis need new and layered solutions. NGOs financed by ODA and philanthropy alone cannot tackle these complex problems.
• NGO services are often project based and depend on applying for follow-up grants, and / or donations to sustain the operations or results.

Opportunities we build on are:

• NGOs are mission driven and on the forefront of promoting positive social and environmental impact.
• For certain services there are customer groups able to pay for them. Creating enterprises that sell services on the market, opens up new financing opportunities by earning income and being potentially attractive to impact investors.