How much business sense a charity have?

Are expectations that a charity should act prudently and in accordance with business best practices hindering its ability to do perform its mission? Nicholas Kristoff's Christmas Day column thinks that question through.

Kristoff focuses on a book by Dan Pallotta that according to Kristoff "seethes with indignation at public expectations that charities be prudent, nonprofit and saintly".

I confess to ambivalence. I deeply admire the other kind of aid workers, those whose passion for their work is evident by the fact that they’ve gone broke doing it. I’m filled with awe when I go to a place like Darfur and see unpaid or underpaid aid workers in groups like Doctors Without Borders, risking their lives to patch up the victims of genocide.

I also worry that if aid groups paid executives as lavishly as Citigroup, they would be managed as badly as Citigroup.

Yet there’s a broad recognition in much of the aid community that a major rethink is necessary, that groups would be more effective if they borrowed more tools from the business world, and that there is too much “gotcha” scrutiny on overhead rather than on what they actually accomplish. It’s notable that leaders of Oxfam and Save the Children have publicly endorsed the book, and it’s certainly becoming more socially acceptable to note that businesses can also play a powerful role in fighting poverty.

“Howard Schultz has done more for coffee-growing regions of Africa than anybody I can think of,” Michael Fairbanks, a development expert, said of the chief executive of Starbucks. By helping countries improve their coffee-growing practices and brand their coffees, Starbucks has probably helped impoverished African coffee farmers more than any aid group has.

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