By Clare Jordan
May 2024
Recently I attended a screening of Dan Pallotta’s film, “Uncharitable.” If you haven’t seen the film, you’ve likely seen his TED Talk or maybe read his book by the same title on the subject of “changing our system of charity,” as he puts it.
Pallotta argues that we need to call into question our basic beliefs about charity if we stand any chance of eradicating the massive social problems our world faces. He makes a bold comparison of nonprofit to for-profit sectors in persuading audiences of the disadvantages of the nonprofit sector.
Pallotta’s almost radical-sounding argument cites five areas where he says our beliefs are forcing a kind of ethical discrimination against the nonprofit sector:
- Compensation
- Advertising and marketing
- Risk Taking
- Time
- Profit
What I have found most interesting in recent years of hearing Pallotta speak on this topic is the discussion his theories generate. I hear more enthusiasm for his points about investment in fundraising and marketing than anything else he says, and this may be a less popular opinion, but I wonder if we might be missing a bigger point.
Pallotta’s impassioned pleas challenge a belief system, a system, he says, that keeps our nonprofit organizations tiny in comparison to our massive social problems. But he is not arguing only to enlarge nonprofit organizations and their budgets; I think he is trying to provoke bigger thinking.
This is where I want to challenge some of the most common reactions to “Uncharitable:”
- Don’t get stuck on compensation. Yes, people working to do good in the world also deserve fair payment for their work. But bigger salaries alone do not always translate to bigger ideas. Nonprofits need to be able to compete in the employment market with budgets to attract and compensate the brightest minds to tackle major social ills; we also need the big ideas that motivate increased giving and thus higher salaries. This is a staff and a board leadership responsibility that is too often neglected.
- Invest in growth. Increasing the marketing budget is not enough to significantly increase giving. Keep in mind that this is only one piece of a budget and one tactical component in an overall growth strategy. Nonprofits must be dedicated to crafting innovative concepts accompanied by intentional planning that is designed to not only meet or maintain needs, but which truly attacks social problems at their core and shines a light bright enough to not just raise awareness, as we so often say, but to spark compassion that incites action. Messaging that asks for support simply to “continue” your work is insufficient and uninspiring and will never boost the GDP past that 2% mark.
- Try new things. Pallotta’s point about taking risks in pursuit of new ideas for generating revenue is perhaps his best and most overlooked concept. Social innovation takes us beyond the typical nonprofit realm and motivates broader thinking and entrepreneurial approaches to problem solving. From conception through ideation, applying this type of design thinking to real world issues can move us from trial and error into grand solutions. The social sector needs leadership that supports this kind of “generosity of thought,” as Pallotta puts it, changing the way we think and the scale of our dreams.
At the heart of each of these points is the one focus that I think many of us are overlooking: leading with big ideas.
How often do we see the for-profit sector thinking big and taking risks that pay off? A couple of examples that caught my eye recently:
- Krispy Kreme recently announced that its doughnuts will be sold in McDonald’s. Yes, it’s risky, but it’s likely to be a good risk that handsomely rewards shareholders.
- Dyson, known for their fancy vacuums, made a pricey hairdryer that was rewarded by its high-end market, a good risk.
I suggest that if the nonprofit sector was less focused on fundraisers’ salaries and marketing budgets (“overhead”) as a reaction to Pallotta’s concepts, we might see the even greater benefits of thinking bigger: less about what we are doing and more about what we could do. If we were truly functioning as social innovators and social entrepreneurs, we would de-emphasize the “non-profit” title, an unfortunate misnomer for a mission-focused social sector, and we would invest in the brainpower of our leadership to provide ideas that empower vision and solve our grand challenges.
Challenge your reaction to “Uncharitable” and focus on the kind of big thinking that makes “a world that works for everyone,” as Pallotta says. Remember that our goal is not keeping overhead low; it is changing the world. We just might get there if we push the confines of the current belief system and live into his statement that “philanthropy is the market for love.”
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