CARE, the Atlanta-based international relief organization, wanted more than money from United Parcel Service Inc., the world's largest package delivery company.
In 2007, CARE asked UPS, a long-time cash donor also headquartered in Atlanta, to lend its knowledge and experience in logistics to help develop a more efficient delivery system for disaster relief supplies.
Last year, UPS launched an assessment of CARE's distribution network and found some "disturbing" practices that are common to humanitarian organizations, Dale Herzog, a UPS solutions manager, said at a Georgia Institute of Technology conference Thursday.
Disaster relief agencies pride themselves in targeting donor money directly to the victims of natural disasters. But that often comes at the expense of the agency's internal needs, Mr. Herzog told participants of Tech's Health and Humanitarian Logistics Conference.
Agencies need more funding to build better delivery systems and to have supplies positioned throughout the world that can be quickly dispatched after a disaster, said Mr. Herzog.
"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.
Another goal for CARE is to maximize "economies of scale" through bulk purchasing of supplies in larger quantities from a central location rather than country by country, Mr. Herzog said.
He called it "unprecedented" for CARE to ask a donor to review its operations and he urged more companies and non-profits to consider similar approaches.
"We believe we have a tremendous amount of intellectual capital that can be put to use," said Mr. Herzog. "We want to be a driving force to help motivate companies and other foundations to look beyond what you've always been doing."
The Georgia Tech conference was sponsored by the university's Health and Humanitarian Logistics Center, a unit of the Supply Chain & Logistics Institute. More than 175 people attended, including participants from Canada, Croatia, Germany, India, Iraq, Kenya, Mexico, Nigeria, South Africa, Switzerland, Turkey and the United Kingdom.
For more information on the conference, click here.