Charitivism: The Gloves are Off
Still musing on @danpallotta talk at #artezdc. We R handicapping ourselves by perpetuating the myth that low overhead = effective charity.
Indeed, I think everyone was.
It would be unfair to say that Dan Pallotta's presentation, "Uncharitable: How Restraints on Nonprofits Undermine Their Potential," stole the spotlight. It was bookended with talks by people like Katya Andresen, Ted Hart, Dharmesh Shah, Judy Chang (Principal Product Manager, PayPal) and Care2's Jocelyn and Eric Rardin, all of whom knocked the ball out of the park. (A few highlights: Ted set the tone by declaring that we have moved from the era of "direct marketing" to "direct influence," and to fundraise online effectively, we'd have to "stop fundraising and start communicating"; Katya gave her first live presentation of her must read ebook, Homer Simpson for Nonprofits, which she'll repeat at the NTEN conference next week; and Dharmesh probably converted everyone in the room into avid bloggers, SEO buffs and tweeters, if they weren't already.)
But Dan's presentation was definitively special. For those who don't know, Dan is the author of Uncharitable, a rather insurgent book which argues that "society’s nonprofit ethic undermines our ability to eradicate great problems, and, ironically, puts charity at a severe disadvantage to the for-profit sector at every level."
In his talk, Dan pointed to the flurry of warnings issued by media outlets and state attorneys general about donating to relief organizations in the aftermath of Haiti's earthquake, to highlight the erroneous assumption that people ought not donate to nonprofits that report high overhead costs.
Stop and think about this.
How exactly is a Haiti relief organization supposed to implement solid programs without skilled staff, technology and organization? There is no doubt that some nonprofits are more or less efficient than others, but why are overhead costs the litmus test?
Put another way: You should not donate to the soup kitchen that reports 30% overhead expenses (don't bother to find out that it has highly professional facilities and staff, and serves healthy organic soup). You should donate to the soup kitchen that reports 5% overhead expenses (don't bother to discover that their facilities are dilapidated, their staff rude, and their soup bereft of nutritional value).
Dan believes this stigma hearkens back to our country's Puritanical belief system that rewards capitalist entrepreneurship and humbles charity to an almost parasitic level. That is, you're not doing your job if you're working on a Macbook Pro and have complimentary coffee in the office kitchen. You are expected to run highly sophisticated software on donated IBMs circa 2001 and call hospitals in Haiti from a shared rotary phone.
Meanwhile, corporations that want to sell sugar water to children and exploit lax labor laws in poor countries are rewarded with billions. Yes, something is certainly wrong with this picture.
Perhaps the worst consequence for the nonprofit industry is that this culture forces it to lie to itself. Dan cited the statistic that a third of nonprofits with a budget of $5 million had reported no fundraising expenses.
So how is the sector expected to become more efficient when our culture forces it into dishonesty?
Dan's answer to this problem is as common sense as it is profound. Replace words like "overhead" with "implementation," or, if it's not a stretch, "vision." He closed his presentation saying, "Revisit your great dreams and infuse them with courage, and the determination to make them real."
I later ran into Dan by the elevators as he was leaving and told him I planned to use his talking points in my own work with nonprofit organizations. "Do it," he said, "we've got to get this movement going."
He meant every word, I thought.