"One of the most disturbing things we found and this is pretty much universal for all non-governmental organizations, is that their drive for efficiency completely drives inefficiency," the UPS executive said. "You want to be efficient and say, '90 cents of every dollar is going to get to the end user.' There's only one problem with that. It drives a tremendous amount of inefficiency because there is typically no funding for capacity building, there is no funding for training, there is no funding for pre-positioning supplies."
Having supplies purchased ahead of time and positioned in various regions of the world allows speedier dispatch to victims, saving time and money, Mr. Herzog said.
"How much do you think the cost of food goes up during a disaster, tents and just general commodities that are needed?" he asked. "It's a tremendous amount of increase in cost. We want to be in a position where we can have prepositioned supplies. Unrestricted funding is the way to do that."
CARE is constantly seeking unrestricted funding to build the organization, Rigoberto Giron, CARE's vice president for strategic initiatives, told GlobalAtlanta. However, many donors are compelled to give money to victims of a specific disaster and CARE must respect those wishes, he said.
"Generally, donors are not receptive to their funds being used internally," said Mr. Giron.
While agreeing with Mr. Herzog that organizations like CARE have many needs internally, the first obligation is to help the victims of natural disasters, Mr. Giron said.
"The needs of our beneficiaries will always outweigh our internal needs," he said.
In its review of CARE operations, UPS found that the organization lacks an efficient system for tracking where its supplies are located worldwide, Mr. Herzog said.
"It's something that you would think would be normal but it's not available right now," Mr. Herzog said. "Not very many nongovernmental organizations have that."
UPS has helped build a tracking software system for CARE.
"It's been tested in Sri Lanka, it's been tested in Haiti and it's ready to be rolled out," Mr. Herzog said.