The Way We Think About Charity is Dead Wrong

So why not re-think it? Volunteer Calgary recaps Dan Pallotta’s polarizing Tedtalk

Pre-conceived notions. Sometimes they are helpful. Growing up my mother told me not to stick my hand in boiling water because it would hurt; thanks to that sage advice I have never experienced a second degree burn.

However, most of the time, these notions have little basis in fact. Pre-conceived notions are social constructs that create biases in otherwise rational people.Dan Pallotta

Non-profit organizations – or the non-profit sector in general – is rife with misconceptions and social bias, even from those that work within it. Enter Dan Pallotta, a man that is trying to dislodge these fallacies from our collective consciousness. Pallotta is an American entrepreneur, author, and humanitarian activist (or so says his Wikipedia page).

In the spring of 2013, Pallotta gave a Tedtalk that is available on YouTube, and has quickly whipped up quite the buzz in both the non-profit sector and the public view.

“Philanthropy is the market for love. It is the market for all those people for whom there is no other market coming. And so if we really want, like Buckminster Fuller said, a world that works for everyone, with no one and nothing left out, then the nonprofit sector has to be a serious part of the conversation.

But it doesn’t seem to be working. Why have our breast cancer charities not come close to finding a cure for breast cancer, or our homeless charities not come close to ending homelessness in any major city? Why has poverty remained stuck at 12 percent of the U.S. population for 40 years?

And the answer is, these social problems are massive in scale, our organizations are tiny up against them, and we have a belief system that keeps them tiny. We have two rulebooks. We have one for the nonprofit sector and one for the rest of the economic world. It’s an apartheid, and it discriminates against the [non-profit] sector.”

In his 19-minute Tedtalk entitled The Way We Think About Charity is Dead Wrong; Pallotta seeks to disabuse people of their misconceptions about non-profit organizations in 5 key areas: compensation, advertising and marketing, pursuing new ideas for revenue, time, and profit.  

Pallotta peppers his riveting Tedtalk with anecdotes and statistics that are as funny as they are ridiculous, surprising and sobering – all at the same time.

“From 1970 to 2009, the number of nonprofits that really grew, that crossed the $50 million annual revenue barrier, is 144. In the same time, the number of for-profits that crossed it is 46,136. So we’re dealing with social problems that are massive in scale, and our organizations can’t generate any scale. All of the scale goes to Coca-Cola and Burger King.

Personally, I have only just recently dipped my toes into the non-profit pond – having spent more than my fair share of time schlepping drinks to people in bars; however, I realize that despite the fact that I work in the non-profit sector, I too am guilty of harboring these biases about non-profit organization. Ridiculous, right? I would be willing to wager a bet that I am one in a sea of non-profit employees that, as Pallotta says, “equates morality with frugality.”

Pallotta gives examples of why this way of thinking is ludicrous, and how it keeps good solid charitable organizations smaller than they could be.

“In the for-profit sector, the more value you produce, the more money you can make. But we don’t like nonprofits to use money to incentivize people to produce more in social service. We have a visceral reaction to the idea that anyone would make very much money helping other people.

Interesting that we don’t have a visceral reaction to the notion that people would make a lot of money not helping other people. You know, you want to make 50 million dollars selling violent video games to kids, go for it. We’ll put you on the cover of Wired magazine. But you want to make half a million dollars trying to cure kids of malaria, and you’re considered a parasite yourself.”

When he gives these examples you realize just how ridiculous these beliefs are and hopefully makes you change the way you think about charitable giving.

Whether or not you are in the non-profit sector, Dan Pallotta’s Tedtalk is some healthy food-for-thought.

You can watch Pallotta’s Tedtalk below, or you can find it here.

-Kim Wright
Volunteer Calgary’s resident story teller

Let’s keep the conversation going. Let us know what you think about Pallotta’s Tedtalk in the comments section.

thanks to Jurveston on Flick.r for the photograph


About Propellus

Propellus is a non-profit organization that has been empowering organizations since 1955. Through a dynamic range of consulting, training and member services, it helps organizations envision and realize new paths, practices and possibilities. Propellus guides, mentors and educates clients, arming them with tools and resources to help boost organizational effectiveness. Propellus strengthens organizations; in doing so, it leads the way toward building thriving communities.
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One Response to The Way We Think About Charity is Dead Wrong

  1. Martha Willson says:

    Thanks for your perspective, Kim. It helped me remember why I liked Pallotta’s TedTalk so much. After listening to it, I was inspired to find out more about him. Not the best track record with his team or his legacy! But his words still make sense and seem so true. Your insights reminded me that this is an important conversation.

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