Small and medium-sized enterprises (SMEs) are the economic backbone of Latin America and the Caribbean (LAC), generating over 60% of employment and driving local supply chains. Yet, systemic barriers – including limited access to financing, digital exclusion, and regulatory hurdles – prevent them from reaching their full potential. These challenges disproportionately impact informal businesses, restricting their growth and long-term sustainability.

This chapter explores how philanthropy can be a catalyst for change, addressing these barriers and unlocking SME potential. Through the Tienda Cerca initiative by AB InBev, it highlights how blended finance, digital tools, and capacity-building programs can empower small businesses. By digitizing informal enterprises, expanding access to credit, and fostering entrepreneurial resilience, these interventions not only drive financial inclusion but also promote sustainable economic development.

Despite the Arab world’s growing development needs, its third sector remains constrained by outdated regulatory frameworks that limit its potential. This chapter explores how effective policy reforms can unlock catalytic capital, empower civil society organizations (CSOs), and drive systemic change across the region.

Through the case study of Bab Amal in Egypt, an evidence-based poverty alleviation initiative, this chapter illustrates how regulatory inefficiencies increase costs, delay impact, and hinder large-scale social transformation. It highlights five key policy areas – streamlining registration, financial sustainability, data access, multi-sector collaboration, and evidence-based policymaking – offering a pathway for unlocking billions in untapped development capital.

Africa faces a $1.3 trillion annual funding gap to achieve the SDGs and build climate resilience, yet private investors hesitate due to perceived high risks. Despite contributing less than 4% of global carbon emissions, Africa bears disproportionate climate impacts, with over 110 million people already affected by extreme weather events.

This chapter explores how philanthropy is emerging as the most powerful de-risking tool for both sustainable development and climate finance. By absorbing early-stage risks, providing patient capital, and unlocking private investment, philanthropy is catalysing solutions in renewable energy, climate adaptation, and nature-based carbon sequestration. Through real world case studies, it reveals how blended finance, impact investing, and catalytic capital can accelerate Africa’s green transition and economic transformation.

The global financing gap for sustainable development is widening, demanding innovative solutions. This chapter explores how philanthropy can unlock private capital through blended finance and catalytic capital, ensuring critical priorities – from climate action to poverty reduction – receive the funding they require. As emerging markets face investment shortfalls, philanthropy’s risk-taking potential can de-risk projects, attract institutional investors, and drive systemic change.

Drawing on insights from the OECD and global experts, this chapter highlights the transformative power of public-private-philanthropic partnerships and how foundations can move beyond traditional grant making to deploy impact investments, guarantees, and innovative financial tools. By strategically aligning resources across sectors, philanthropy can bridge capital markets and the SDGs, catalyzing investments that balance financial returns with meaningful social and environmental impact and ultimately redefining its role as a driving force for global change.