‘Harvard Business Review’: Disaster Relief

Corporations donated unprecedented amounts of cash, goods, and services to relief organizations responding to the Southeast Asian tsunamis in 2004, but shortcomings in the humanitarian effort highlighted the need for greater collaboration among charities and businesses before disaster strikes, says an article in the Harvard Business Review (November).

Charities responding to the disaster were largely understaffed and unprepared to handle donations of products and services from businesses, write Lynn Fritz and Anisya Thomas. Mr. Fritz is founder of the Fritz Institute, a nonprofit group that seeks to improve humanitarian aid, and Ms. Thomas is the managing director of the organization.

The authors say that closer ties between businesses and charities would produce many benefits, but they acknowledge the obstacles. Charity leaders often wonder whether companies are interested in anything but the most high-profile humanitarian relief efforts. Corporate leaders, based on interviews the article’s authors conducted, face trouble communicating with charity officials and harbor doubts about some relief organizations’ capabilities and professionalism.

Despite those difficulties, the article says that alliances can succeed, and it outlines the pros and cons of common arrangements:

• A single company can work with one relief group to supply specific goods and services when called upon, a process that is usually quick and effective. However, that approach doesn’t work well when the humanitarian needs of a given crisis don’t match what the corporation can provide.
• A group of businesses can form a relief consortium to coordinate work with a charity. This arrangement diversifies the array of relief goods and services but requires greater financial and staffing commitments than when one company is the key player.
• A business and a charity can establish deeper, systemic commitments based not only on donated goods and services, but also on shared responsibility for managing operations and distributing goods. While this approach makes charity operations effective, it places a charity at risk in the event of a corporate scandal or an economic downturn.
• A consortium of companies can bring their collective resources to a range of relief organizations, thereby offering comprehensive goods and services. But that approach is the most complex and costly and can provide each company less visibility than would be available if the business acted on its own.

The article is available online.