In the context of accelerated social transformation in China, the consensus on solving social problems through the participation of NGOs in the third distribution has become increasingly clear. Therefore, it is necessary to analyze the challenges faced by NGOs when participating in the third allocation from a practical perspective, and summarize a set of practical ideas and countermeasures. This has important practical significance for further solving the issue of social equality and alleviating the gap between rich and poor. Based on the existing 12 papers on NGO and third distribution, this paper analyzes the theoretical role of NGO participation in third distribution, which can be divided into two elements: alleviating the shortage of public goods and low cost and high efficiency. From a practical perspective, examine the current situation of NGOs in the third distribution from the perspective of the "two major factors" mentioned above. It is found that there are still three major problems: the inefficiency caused by "voluntary failure", the imperfection of the charitable tax system, and the constraints of the dual management system. How to solve the above-mentioned "three major issues" has become the key to the efficient participation of NGOs in the third distribution.