Nonprofit Promotes Local Businesses in Crisis-Plagued Countries

In countries recovering from the ravages of conflict and crisis, economic desperation can be the biggest threat to peace. To fight poverty and help build stability in still-fragile places, the nonprofit Building Markets connects local entrepreneurs with business opportunities.

As soon as the fighting stops, the United Nations, donor countries, and charities allocate billions of dollars for aid, but much of it pays for supplies and personnel shipped in from other places, says Scott Gilmore, the nonprofit’s founder.

“The local economy often gets bypassed,” he says. “So we saw that as our niche, our opportunity to try to redirect a little bit of that spending into local economies.”

When Building Markets starts working in a country—say, Liberia—it compiles a list of all the items large buyers like the United Nations, the national government, and oil and mining companies are importing. The group’s local employees scour the country to identify businesses that might be able to supply the goods. Then when a large buyer asks for bids to provide goods or services, Building Markets alerts the businesses that they can bid for those contracts.

Since Building Markets was founded in 2004, the organization has helped local businesses win contracts worth more than $1-billion and create more than 65,000 jobs.

Mr. Gilmore realized the importance of entrepreneurship in helping to stabilize troubled countries during his former career as a diplomat.

His job, which was part of a peace-keeping mission in East Timor, focused on economic development. Mr. Gilmore grew frustrated that despite having a budget larger than the fledgling country’s gross domestic product, the effort wasn’t creating jobs or economic growth. At the same time, he rented a house from a local man who had lost almost everything in the fighting. Each month, his landlord used the money Mr. Gilmore paid to rebuild burned-out buses.

“By the time I left Timor, I had accomplished nothing at work, but my rent checks had created the largest busing company in the country,” says Mr. Gilmore.

Last year his organization’s budget was roughly $6-million, 85 percent of which came from government grants.

Building Markets is looking for ways to earn money while advancing its mission. To that end, the group has started to help banks and investment firms that want to invest in emerging markets identify companies with growth potential.

“There’s a recognition on Wall Street that over the next 10, 20 years, the real economic growth is going to be in these frontier economies,” says Mr. Gilmore. “But they’re having a very difficult time getting access to these companies. There’s no Yellow Pages. There’s no stock exchange.”