Rethinking Charity

Have we been thinking about charity all wrong?

The way we think about charity is dead wrong.

This the title Dan Pallotta, Founder of Charity Defense Council and author of Uncharitable – How Restraints on Nonprofits Undermine Their Potential, used for his 2013 TED Talk.

You know what? He may be right.

A mindset shift needs to happen

We humans can be funny sometimes.

On one hand, we want to see the most pressing problems in the world – climate change, hunger, poverty – solved sooner rather than later. Historically, we turn to nonprofits to tackle these issues.

On the other hand, we look at nonprofits who use donations and grants in not so traditional ways (e.g. spending on advertising) as if they’re committing a crime.

People don’t like to see their donations go towards anything that’s not directly impating the needy, as Pallotta points out.

But is this the right way to think about charitable giving?

The reality

The reality is solving a big, complex problem takes a ton of cash and resources.

And there lies the problem.

Nonprofits have limited resources, which means they’re already facing an uphill battle.

The unfortunate part is that nonprofits know donors don’t want their donations to be used for anything that’s not directly correlated with solving a specific problem. For example, people who donate to a breast cancer research nonprofit want their donations to go towards research, not hiring or marketing initiatives.

But is using donor money for hiring talent or anything else with the potential of moving the needle such a bad thing?

Consider this:

  • In the 90s, Pallotta created several multi-day charitable events, including Breast Cancer 3-Day walks, AIDS Rides, and Out of the Darkness suicide prevention night walks.
  • 185,000 participants took part.
  • The participants raised a combined $581 million dollars.

How did Pallotta do it? By buying full-page ads in The New York Times, Boston Globe, and prime time radio and tv.

So the question is, would the result be the same if the initial investment in advertising didn’t happen?

I highly doubt it.

Final thoughts

In my mind, the message Pallotta wanted to get across to the TED audience was loud and clear:

  • Nonprofits need to invest in the areas that will help them accomplish their mission despite public perception.
  • The general public needs to buck the traditional mindset around how nonprofits use capital.

Watch Pallotta’s entire TED Talk below: