Dan Pallotta has Got it All Wrong…….NOT!

Dan Pallotta’s inspiring presentation brings out some of the realities that drive the dynamics between the not-for-profit world and its constituents. Combining elements from his own experience and numbers from the NGO world, Pallotta emphasizes the social stigma that prevents charitable organizations from being able of raising money for a particular cause; in contrast, the for profit sector is lauded for doing pretty much the same thing. As a result of mainstream misconceptions regarding the way in which charities should function, they work and survive within narrow parameters that eventually hinder their innovation and growth. I would add to his talk that both corporations and NGOs could learn from each other.

At first glance, NGOs and corporations seem incompatible: their institutional purposes diverge; their structural principles often clash; and their visions of the world are at odds. Typically, people in the NGO sector are very skeptical of the corporate world while companies see humanitarians as idealistic and inefficient dreamers. However, a closer look reveals how two seemingly incompatible sets of institutions may benefit from each other. On the one hand, organizations have decades of experience on the front lines of disasters and in long-term development initiatives, which would potentially benefit corporations to improve market studies in emerging countries. On the other hand, organizations, who struggle to act in a quick and organized manner during disaster relief operations, have much to gain from adopting logistic mechanisms that are widely used in the corporate world.

On another note, Pallotta does an excellent job of placing the blame away from charitable organizations, but forgets that many of these NGOs have also internal problems that hurt their ability to raise funds. Some charitable organizations are a world away from leveling the field in logistics and supply chain management. Some of the factors leading humanitarian organizations into inoperability are: nonfunctioning computers, members lacking the training needed for their positions, or unwillingness to collaborate with other organizations. One could argue that most of these issues are a consequence of pressures from donors and board members, who donate vast amounts of money and want to see quick results. Although this is partially true, organizations should strongly emphasize the need to invest in systems, processes, and technologies that will eventually reduce expenses. By building more effective channels of communication (strategic relationships) with board members and donors, NGOs will shake off part of the criticism surrounding their practices.

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