Nothing but Nets had a simple idea: kids in Africa need bed-nets to protect them from malaria-carrying mosquitoes, and there’s already a huge distribution network in place, through the Measles Initiative. Why not utilize the existing infrastructure to reduce the cost that a bed-net-alone charity would incur, and distribute more nets for fewer dollars? Saving people from malaria and measles – what could be better?
The Global Network for Neglected Tropical Disease Control proposes something similar: organize the handful of organizations distributing medicine to fight the so-called neglected tropical diseases, which include River Blindness, Hookworm, and Elephantiasis. More efficiency means lower costs and ultimately more lives saved.
But, here’s the thing that bugs me. Last year, when I first did research into diarrhea, I learned about something called Oral Rehydration Salts, a packet of which cures diarrhea and costs 5 cents. And, that’s not all: condoms cost pennies and prevent HIV/AIDS transmission, a 50-cent dose of antibiotics cures pneumonia, iron pills reduce incidence of anemia, and Vitamin A pills prevent blindness. And, for the most part, all these conditions affect the same communities: poor, rural areas of Sub-Saharan Africa.
It makes no sense that it takes more than three different organizations to distribute all the small, cheap items mentioned above. Why isn’t someone distributing everything? It’s great that Nothing but Nets and GNNTDC recognized the opportunity in some cases, but why haven’t we seen anyone giving out the whole goodie bag?
There are certainly a lot of good reasons to run a program focused on providing everything – necessary medicine in addition to health and other poverty-reducing servies – for a contained group of people. More about that to come soon. But, if you’re running a distribution program as many organizations do … how can you distribute bed-nets but not ORS? How can you distribute Vitamin A without bringing some bed-nets along? And, why distribute condoms without some good ol’ Ivermectin?
Comments
Condoms should be counted differently because the primary cost is not that of production and distribution but rather that of convincing people to use them, and also because they are preventative so their cost must be divided by the ratio of disease preventing uses to uses where disease would not have been transmitted even absent their use. HIV is not easy to transmit, so this is a very small fraction.
Of course there’s more to preventing HIV than just distributing condoms. And, a bunch of the interventions I mentioned are preventative and not curative. But, my point is that as long as you’re distributing one thing that everyone should have, distribute everything that everyone should have.
I certainly agree with the main point. I just omitted to take the time to voice my general agreement. Do you think I should have done so? Is it a waste of comment space to even ask?
Unfortunately this logic works very well until you get to the part of our brains that actually controls giving. The studies are pretty clear that for the average person, the more information and more choices you give them, the less likely (and less amount) they are to give.
An appeal focused on helping 1 child in 1 way raises more money than helping multiple children or helping in multiple ways.
A second factor is that the difficulty of managing logistics increases at least geometrically, if not logarithmically, as you add more items. Non-profits are actively disincented from acquiring logistics competence (because that’s overhead of course). So, they simplify to what they can handle — one thing at a time. We saw this dynamic most graphically displayed during Katrina and the tsunami where there was far more money than needed available and far too little actually getting done.
So, while the non-profits are not free from responsibility, we should not forget the role donors play in creating the situation.
Tim, it’s become pretty clear to us that fundraising and program are pretty cleanly separated. Charities already raise money based on one compelling story, then spend it on a trillion unrelated or tangentially related things. This doesn’t seem to pertain to Elie’s point, which regards program execution.
I’m not sure how big the overhead would be from adding more handouts to existing networks – seems like less overhead than having so many separate networks – but I agree with you that charities don’t spend enough on overhead and that donors share the blame for this problem.
Michael/interested – we are not short on comment space, and I do think it’s useful to make clear whether you are disagreeing with our point or discussing a detail.
Tim, what are the logistical difficulties? I’m largely talking about organizations, like PSI, that already distribute tons of different things. It seems to me that adding 4 items when you’re already distributing 12 is much, much easier than setting up the infrastructure to distribute the first item. Sure, there’re some extra costs and difficulties but, c’mon, the gains seems so obvious and so large that the problems you’re raising seem minor. What am I missing?
Is it possible that adding those items will contribute to more overhead (outcomes tracking, hiring of staff that falls outside the competence of the distributing organization)?
I can imagine that most nonprofits will find this to be a version of mission creep and thus reject it before seeing their way through the idea.
Allan – I’d bet that adding additional items would add some overhead. But, the marginal increase in overhead would be small because the organization already distributed lots of light, small items. It seems to me that we’re talking about adding more items to the truck driving out to each village. I’d guess that 80% of the overhead is already paid.
I could believe that non-profits would see this as “mission creep” but that seems strange to me. Isn’t it the mission of these non-rpfoits to save people’s lives? If you can save more people by distributing one more type of pill, shouldn’t you?
Elie: Great post. I too am astounded by the lack of such co-ordination. I think this is a very important point and deserves much more consideration from the NGO community. An added advantage is that if there is an outbreak of disease X, then we can simply add preventative/curative item Y to the things being taken to the people.
Tim: I think that for many people (most?) you could fundraise very well on Elie’s idea by pointing out the absurdity of all these groups trooping across the continent visiting each village and dropping off their own preffered item, when we could just do it all at once. People can easily see why that is a great thing — don’t even mention the long list of things delivered. Also, I find it hard to believe that the logistics scale worse than linearly. The whole point of this is that it is obviously much easier to take Measles vaccine and vitamin A pills everywhere than to have two separate trips taking each one of them everywhere. It also puts a much smaller burden on the recipients who don’t need to know about all the different groups distributing htings and the dates they will arrive, but just need to know one key group/date.
In Malawi Population Services International in DC stumbled across a way to get insecticide treated bed nets to the poor. PSI sells bed nets for .50 to mothers thru antenatal rural clinics with initial funding and logistical support from local aid agencies and the nets are reaching those that value and need them. (pregnant women and children being at most risk for Malaria). The nurse who distributes nets gets .09 cents each, so they are always in stock. PSI sells bed nets in richer areas of Malawi for $5 each, using profits to help subsidize nets sold at clinics. PSI’s bed net program has increased children under 5 using net from 8% in 200 to 55 % in 2004. There is nearly universal use of nets by those who paid for them. In Zambia where there is a free bed net program only 30% of the recipients used the nets. (see page 13 of White Man’s Burden for more details)
Ugandan success with their ABC program for HIV/AIDS prevention
http://www.guttmacher.org/pubs/tgr/06/5/gr060501.html
Not that one should believe the Times, but that approach has recently been severely criticized Mark.
http://www.nytimes.com/2007/10/09/health/09nets.html?_r=2&ex=1349582400&en=f182020097f1386d&ei=5090&partner=rssuserland&emc=rss&oref=slogin&oref=slogin
Great article Michael, thnx for sharing.
I think that much like any marketing efforts, different approaches work diffrerent in different places. And then NPO’s and NGO’s all scream louder and louder that they themselves have the “magic answer” and often times build their fundraising programs on top of that.
It is (I think) the cross pollination of many various efforts and ideas that will provide the greatest number of various transparent, open, scalable solutions…shared in an environment where no NPO/NGO is holding back their “secret sauce” for their own fundraising purposes.
Mark – could you point me to the source for the claim you make above that PSI’s program in Malawi increased net utilization from 8% to 55% in 2004? Also, I’d love to see the specific evidence that selling something effects broader utilization than giving it away free (in addition to White Man’s Burden).
Also, Mark – do you have anything specific in mind when you say “different approaches work in different places” – what types of approaches do you think work better in which types of places?
In response to your previous post to Allan:
This has turned into a very interesting discussion. I can tell you that your assumption on the minimal impact to overhead that would result from adding a few more items is correct. If the distribution and supply chain processes are already in place for the distribution of existing items…ramping that up to include a few more would have a negligible effect.
That being said, your comment about mission creep/scope creep is one that I’ve considered myself. I have been talking to a great deal of non-profit organizations over the last year doing research of my own and the topic of distribution has come up a number of times. I’ve spent most of my career working in the logistics industry, so I’m naturally asking questions regarding the efficiency of their distribution network.
Most of the small to medium sized organizations are doing their best to run lean and mean and trying their best to stay focused on dealing with a specific issue in a specific area. I have found that very few of them have internal resources with any experience with logistics in general, and look at that area as something almost outside their core competency.
In a perfect world I’m 100% on board with the concept of the “goodie bag”. I also agree with the fact there are some real synergies (I hate having to use that word but couldn’t find a non corp speak one that did the job) that could be leveraged between organizations targeting issues in similar regions. Realistically though, if a charity tries to be all things to all people rather than focusing on its core focus, I think it’s doomed to fall well short of its goals.
The main thing that this post has me thinking about however is the fact that there is a real void in the non-profit sector when it comes to logistics in general. I think this is one of the subjects concerning non-profits that I rarely hear much about (minus the Katrina aid distribution debacle), and when I do hear about it…I rarely hear any solutions offered and have seen little to no evidence that someone is doing anything about improving it.
I’d love to see the people running the organizations to more actively seek out partnerships to reduce distribution woes and drastically increase efficiency, but I can’t see that happening…so many of the leaders of these organizations seem to suffer from tunnel vision. Could be a great gap for a third party to fill…I think there is enough low hanging fruit out there that they’d have years of easy wins ahead of them.
Justin, I’d summarize your two main points, which explain why organizations don’t use this idea, as follows:
You also say that you’re a logistics expert and have talked to many organizations about distribution. What could they/should they be doing better? How does distribution work now, and how would you improve it? I’d like to understand very specifically how, for example, the drugs that Merck donates get to the people who need them.
>>Mark – could you point me to the source for the claim you make above that PSI’s program in Malawi increased net utilization from 8% to 55% in 2004? Also, I’d love to see the specific evidence that selling something effects broader utilization than giving it away free (in addition to White Man’s Burden).>Also, Mark – do you have anything specific in mind when you say “different approaches work in different places” – what types of approaches do you think work better in which types of places?
N: Mark Grimes
C: – a better world experience
P: 503-502-0185
E: mark.grimes@ned.com
W: http://www.ned.com/
A: 4888 NW Bethany Blvd, K5-222 Portland, OR 97229
Will try that again, didn’t like the carrots.
(Mark – could you point me to the source for the claim you make above that PSI’s program in Malawi increased net utilization from 8% to 55% in 2004? Also, I’d love to see the specific evidence that selling something effects broader utilization than giving it away free (in addition to White Man’s Burden).)
Ouch. I made a response to this post two days ago and it didn’t seem to stick. Oh well, so it goes.
No more sources other than the page number from White Mans Burden I referenced above.
Now the fee versus free argument also goes on outside the development industry as well. Me, I’m agnostic…I say, do both, test both, measure both. Do both and more. Get creative with other solutions as well.
(Also, Mark – do you have anything specific in mind when you say “different approaches work in different places” – what types of approaches do you think work better in which types of places?)
Well, I’m far from an expert and my international travel experience is laughable. But I think required reading for everyone in “development” should be “White Mans Burden”, “Despite Good Intentions”, “Begging for Change” and “The Lords of Poverty”. And while I don’t know what all the white people in the air-conditioned Landrovers with white NGO/NPO flags flapping in the wind were doing in Gulu, I never saw one of them speaking with a local person my entire four days there.
Now poverty is different in Portland, Oregon than Gulu, Uganda. HIV/AIDS is different in Lesotho versus Seattle. To every NGO (carpenter) the solution to the problem (nail) looks like a hammer. Best to have more tools in the toolbox, but NPO/NGO’s want to keep their “secret sauce” to themselves so they can…of course…raise more money.
Solutions to social problems when viewed thru the eyes of a marketing or advertising agency begin to reveal the need for exploring “market segments” and “market conditions”. When the rainy season is harder and much longer in Uganda (as it is now)…how does that effect Malaria? If a person takes their Malaria bed net and either sells it for food, turns it into a fishing net or clothing, how do you measure that?
Wal-mart (never been in one, I live in Oregon ;-), Target and Costco frequently send in third party vendors to observe and report on overseas worker conditions and check independently with employee banks to verify stated wages are being paid directly to the employees. I’m told leading fair trade authorization org is not quite so thorough (not even close).
Seems like an open source toolkit of solutions to various challenges transparently reviewed by third parties and evaluated with strong feedback in true partnerships with the people these solutions are intended to help would be a pretty good idea.
In Gulu we had $5,000 to distribute to best benefit the local community. 135 people 75% from surrounding African countries broke into 5 groups to brainstorm ideas, but only locals got to vote on the ideas. (too much for one story here/now). And after some great questions all around, creating a local microfinance fund was the winning idea. Now their two biggest concerns by far regarding the microfinance. 1. If people missed a payment they would go to jail (not quite what Yunus had in mind, eh), and 2. Corruption. Microfinance has been so commoditized by bigger banks in many part of Africa that its not quite what it once was. Now when they understood it was truly their money and they made the rules…it was a different story altogether.
Also in Gulu there was a “Better Microfinance” open space meeting and over 100 of the people participated. It was amazing to me the various types and flavors of microfinance, microloans, and microcredit instruments that exist. Kiva is great, but not the panacea. MyC4 is great, but not the panacea.
I would go on, but have already yammered even more than the first post that disappeared.
N: Mark Grimes
C: – a better world experience
P: 503-502-0185
E: mark.grimes@ned.com
W: http://www.ned.com/
A: 4888 NW Bethany Blvd, K5-222 Portland, OR 97229
Elie:
First off, thanks for summarizing my long winded post. Brevity isn’t exactly my forte. I spoke with Holden at length about a month ago and discussed some of the things I was looking to do in the non-profit sector moving forward. During our conversation it was clear to me that through your research over the last year, you were way ahead of me in understanding all the pitfalls in the sector. One of those pitfalls that I discussed with Holden (also the main reason I reached out) was finding a better way to evaluate which organizations to fund. I share the feeling that sites like charitynavigator and guidestar fall far short of what I would consider an effective means of evaluating a charity.
Anyway, after the conversation with Holden, I kept calling on charities and doing more and more research into how they operate. I mentioned in the previous post that I’ve spent most of my career in logistics, and that naturally has prompted me to start digging into that subject more than some others.
“What should they be doing better”
Right or wrong, I can’t help but analyze a charity through “corporate” eyes. Regardless of how good the intensions of an organization are, at the end of the day they need to be able to follow through. I have volunteered for several organizations in the past that spent more time patting themselves on the back or spending time appreciating just how noble their vision was rather than keeping an eye on the ball. I’ve also worked with a few that were about as selfless as a group can be, but completely lacked the business savvy to see their goals materialize in an efficient manner and establish any kind of longevity.
Where I am going with this is that I think the talent within the organization is critical. The people at the helm need to realize that not only can their organizations fail if they try to be all things to all people, but they will also fall short of their goals if they don’t have the right people or partners on board.
I think one of the main problems is they try to keep everything in house rather than opening their eyes to possible external partnerships. A bit of the blame in this category falls on the shoulders of the potential partners for not taking a proactive role in identifying areas they can really make a difference. I can’t tell you how many times I’ve had the guy on the other end of the phone say “hmm…nobody has ever asked about that before (in regards to supply chain/logistics)” I do see a gap here waiting to be filled.
It’s almost as if they fear that partnering with another organization or using an external party to improve distribution will diminish the credit they get. That may be too harsh though.
It’s easier to play armchair QB with this stuff than to actually put solutions in place. I will say that I have started to see examples of people with a more global/big picture view (like Bill Clinton), spend time identifying situations where there are complimentary interests. People like Clinton have the luxury being able to take that big step back, and have the funds and people resources to execute on their ideas…something I think is a bit harder for the small to mid-sized orgs to do.
“What could they/should they be doing better? How does distribution work now, and how would you improve it?”
1. Actively seek out partnerships in the regions in which they operate. My comment earlier about fear of giving up some of the credit might be harsh, but I’ve seen it before…more effective partnerships should result in better ability to attack the problem
2. Look for LCL and LTL opportunities. LCL/LTL stands for less than container load and less than truck load. Some of the groups I’ve talked to say “I need goods to go from point a to b”…there isn’t a lot of thought about the in between. Some of them also work with a specific company “because that’s the way it’s always been” rather than doing a provider evaluation process (that’s a whole different topic for another post on ways some charities could really improve things internally). Some of the bigger distribution problems in the past come from companies waiting until they have enough goods produced or enough goods collected to fill a full container…this causes delay, and in certain cases can add cost. That’s more on the LCL side when you talk about international transport (air or ocean). When you talk about LTL is refers specifically to what happens with the goods once they are on land…the same issue I mentioned above exists and I cannot tell you how many times in my own business experience (outside the non-prof sector) I have seen companies discover LTL solutions that drastically increase their distribution efficiency and lower their costs. It’s certainly not the magic bullet and doesn’t apply to all situations, but I am confident that if many of these organizations had the benefit of quality logistics advice it would have a significant effect.
3. Get some education…if you insist on keeping your supply chain stuff in house, take the time to reach out and learn what questions you need to be asking. Understand the cost break points and difference between air and ocean freight. It isn’t rocket science…it’s an old school set of rules that’s been in place for years. Once you learn the basics you can not only save a great deal of money, but significant time from source to destination.
Say you are distributing condoms from the US to Africa…typically, this isn’t a high priority emergency shipment. If you are proactive, you can do this by sea rather than air adding 30 or so days to the transit time, but saving significantly on the cost and being able to move more quantity.
4. Reach out to contributors. I did a survey recently and one of the questions asked where did most people hear about the charity they contribute to. Almost 90% of the respondents mentioned their place of employment. Corporations provide a decent % of the money that goes to charities. Fed Ex, UPS, Kuehne & Nagel are all big logistics companies that contribute heavily to various charities…are the people that run the charities asking for support in other ways than money? Does a non-profit like Network For Good use their corporate sponsors like Yahoo and Cisco for things other than cash? Servers, network hardware, bandwidth etc etc.
5. Find ways to source locally. This is probably one of the best ways organizations can distribute more efficiently at a lower cost. There are several examples I’ve heard of lately where large organizations have avoided significant logistics problems by simply finding sources closer to the region they are distributing to. I think it was Heifer that in addition to providing animals to poverty stricken areas was also shipping feed from the US…they realized that there were huge costs in doing this as well as huge pains in the a$$ getting the feed to some remote areas. They started seeking out partners closer to the regions they were working with and ended up completely eliminating the need to ship from the US which resulted in significant benefits. (apologies if this wasn’t Heifer…)
I certainly don’t want to appear like I’m on a pedestal preaching with yet another long winded post. The fact is, this is something I need to put a lot more thought in before really being able to offer practical solutions.
p.s. I vow that this is my last bloated post
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