the process is the artwork

What percentage of my donation goes to the cause versus overhead?

Here’s an interesting talk by activist and fundraiser Dan Pallotta calling out “the double standards that drives our broken relationship to charities. Too many nonprofits, he says, are rewarded for how little they spend — not for what they get done. Instead of equating frugality with morality, he asks us to start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses). In this bold talk, he says: Let’s change the way we think about changing the world.” (ref)

“I want to talk about social innovation and social entrepreneurship. (…)

The real social innovation I want to talk about involves charity. I want to talk about how the things we’ve been taught to think about giving and about charity and about the nonprofit sector are actually undermining the causes we love and our profound yearning to change the world. (…)

We have two rulebooks. We have one for the nonprofit sector and one for the rest of the economic world. It’s an apartheid, (…) it discriminates against the [nonprofit] sector (…) If we have any doubt about the effects of this separate rule book, this statistic is sobering: From 1970 to 2009, the number of nonprofits that really grew, that crossed the $50million 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 the scale goes to Coca-cola and Burger King (…) So why do we think this way? Well, like most fanatical dogma in America, these ideas come from old puritan beliefs. The Puritans came here for religious reasons, or so they said, but they also came here because they wanted to make a lot of money. They were pious people but they were also really aggressive capitalists, and they were accused of extreme forms of profit-making tendencies compared to the other colonists. But at the same time, the Puritans were Calvinists, so they were taught literally to hate themselves. They were taught that self-interest was a raging sea that was a sure path to eternal damnation. Well, this created a real problem for these people, right? Here they’ve come all the way across the Atlantic to make all this money. Making all this money will get you sent directly to Hell. What were they to do about this? Well, charity became their answer. It became this economic sanctuary where they could do penance for their profit-making tendencies at five cents on the dollar. So how could you make money on charity if charity was your penance for making money? Financial incentive was exiled from the realm of helping others so that it could thrive in the area of making money for yourself, and in 400 years, nothing has intervened to say, «That’s counterproductive and that’s unfair.»

Now this ideology gets policed by this one very dangerous question, which is, «What percentage of my donation goes to the cause versus overhead?»

– Dan Pallotta

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