Sometimes, I can’t turn my procurement brain off.
Such was the case a few weeks back when waiting to pay for my family’s meal at Denny’s. At that time, I saw this solicitation for donations to MDA…
And I started to think…”Hmmm. I’ve seen flu shots for a lot less expensive than $25. And one minute of research for $85? That’s $5,100 per hour!”
Despite considering myself a philanthropic guy, there was something inside me that hesitated about making a donation. I felt that perhaps through less-than-world-class procurement, this charity was not making the most effective use of its donors’ dollars.
Of course, I don’t know that for sure. They may indeed have an effective procurement department and these represent better-than-market costs.
But it was enough to make me question it.
When it comes to charitable organizations, every dollar saved is a dollar that can be put directly to the mission of the organization. To me, it would make sense for larger charities to focus on procurement as a core competency. The ROI would be worth it.
After all, negotiating a 5% discount on that research (assuming that it doesn’t compromise quality or efficiency) would allow the organization to sponsor more research, leading to new cures or treatments faster, right in line with the mission of the organization.