Currently making the nonprofit rounds is this TED Talk delivered by Dan Pallotta, “The way we think about charity is dead wrong” (video, transcript). Some of you will remember Dan as the powerhouse behind the truly impressive AIDS Rides. Some of you will also remember that the initiative blew up in the face of considerable controversy around the program-costs-to-overhead ratio.
Having worked in the U.S. marketing sector myself for 13 years in Washington, D.C., and personally witnessing the acrobatics that nonprofits perform to hide administrative realities from donors, I completely agree that the ROI model for nonprofits — by which donors expect upwards of 90 percent of every dollar invested to be returned in social welfare win — is also completely unrealistic.
Still, Dan’s argument is very much in the same frame as “women in the workplace” issues. That is, Adopt the same behaviors, women, but don’t expect to change the models that relied upon your exclusion in the first place.
So rather than seriously critique the world views that reward social hierarchy over equality, demand selfishness and exploitation, and tend to graft and malfeasance — structures and policies that maintain the dismal poverty rates that Dan deplores — he argues, instead, that the nonprofit sector should learn from and adopt corporate compensation and administrative spending models to drive nonprofit innovation.
Missing from this “the market will save us” cry is, of course, the recent failure of said market and how it is — again, and aren’t we weary of that — driving necessity and nonprofit innovation with even less.
Writing for the Chronicle of Philanthropy regarding Palotta’s book of the same message, Phil Buchanan lays it out well:
The best case nonprofits have to make is that they are effective in dealing with the challenges that the markets that Mr. Pallotta so reveres cannot, or will not.
READ: Persistent Poverty in a Smug Meritocracy: A response to Dan Pallotta’s TED Talk on nonprofit executives’ pay.