Running a Charity Like You Run a Business

The tenets of Biz 101 still apply, even if it's non-profit.

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The Smile Train, founded in 1999 by Brian Mullaney, 49, and Charles Wang, 64, operates a little differently than your average charity. The difference is that Mullaney runs the nonprofit organization--which is making enormous strides in eliminating cleft lip and cleft palate among children in developing countries--like a for-profit enterprise and draws on his former experience in the corporate world to maximize efficiency and effectiveness. "We pay market salaries," he says. "Employees get bonuses and raises based on performance, and if a program doesn't work, we shut it down. We monitor results. We hold people accountable. We drastically reduce the cost of each surgery by training local doctors instead of flying in American doctors. It's just Business 101."

The proof is in the numbers: Since its inception, The Smile Train has provided free surgery to more than 380,000 children in 75 countries. And with just 42 employees, the organization boasts the highest productivity and lowest overhead cost of any cleft charity in the world. In fact, over the last five years, year-over-year growth has held steady at 50 percent--perhaps because cost-per-surgery is a modest $250 as compared with the $1,000-plus price tag at other organizations.

Plus, Mullaney knows business, having earned his bones as an entrepreneur starting Schell/Mullaney Advertising, an international multimillion-dollar agency for the high-tech industry. The Harvard graduate also made his way through the ranks at advertising giants Young & Rubicam and JWT before starting his own company at age 29.

It was while he was building his agency that Mullaney began volunteering with Operation Smile, a well-established cleft charity that funds surgery missions to areas like Gaza City and Vietnam. "It was fascinating to me, coming from a place like New York that was decadent and wealthy, to go to a place where people were living on a dollar a day and to see how much good you could do by helping them," he says. "It was an intoxicating experience." Seeing the opportunity to apply an improved business model to the cause, Mullaney sold his company and started The Smile Train.

By all measures, he has succeeded. In 2008, The Smile Train raised approximately $100 million from 1.1 million donors and performed 90,000 surgeries. "When you run a charity, you need a big heart, but you also need a big brain," he says. "Otherwise the public shouldn't be giving you any money."

Most important, in this kind of work, a well-run and well-managed operation has a real impact on people's well-beings. Says Mullaney, "When we started 10 years ago, we said we wanted to work ourselves out of a job, and I'm pleased to say that goal is within sight."

—By Jennifer Wang.

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