Tuesday, July 8, 2014

"Dan Pallotta: The way we think about charity is dead" (TED Talk)

Words that come to mind after viewing the video:
Social innovation
Market share

Key points from the talk: 
Charity (Pallotta’s POV) The old way of thinking about charity (based on Pallotta’s POV)
by spending a substantial amount of donated money on marketing, customer service, and other fundraising needs, we multiplied our donations   we want minimal overhead costs 
NPOs should also invest in long-term growth and take calculated risks to foster innovation like in the private sector 
why are we confusing morality with frugality? 
people in charities shouldn’t make too much money 
we are losing talented students who want jobs that will provide them with appropriate financial compensation for their high-skilled labour 

My thoughts:
I hear and feel a deep sense of dissatisfaction and frustration from Pallotta about the way people generally think about charity. I too have felt the same way from interacting with people from the industry and also from my personal dilemma and questions about social enterprises and NPOs. I agree in theory that people doing good should be given the freedom to innovate, grow, and appropriately compensate their employees. Why is there this perception that people working in philanthropic sector shouldn't be well paid. 

However, as a donor, I can also understand the worry about financial management in philanthropies. If my money isn't used directed at the cause, how can I trust that the funds are being used appropriately? Pallotta has a record of fundraising success through his multi-day charitable events, but others have a track-record of misusing funds. 

So, what's the solution? Well, I think especially for charities and NPOs, transparency and education is key. If there are charities that want to innovate and believes that there is a viable and good reason why the organization wants to spend money on something other than the cause, then this information needs to be included in annual reports and in other appropriate pages. To address the problem of donors concerned about high salaries, organizations need to explain and show case the wonderful work that their employees are doing. I think part of the reason for our "old way" of thinking about charity is that there are only a few charities that actually use business strategies to boost their growth. There needs to be more success cases and innovation from the non-profit sector. I think there is reason to be optimistic though because there is increasingly more and more overlap between the for-profit and non-profit sectors. Also, more people are realizing that all businesses have a particular social mission and are expecting companies to be socially and environmentally responsible. 

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