That’s the question posed by charity activist Dan Pallotta in his Wall Street Journal essay last weekend. The author of the blockbuster work Uncharitable who headlined AJLI’s 2011 Fall Leadership conference, Pallotta says the “conventional wisdom is that low costs serve the higher good” when in fact the donating public’s cost-obsessed logic may be restricting the capacity of charities to do their jobs.
Pallotta, whose credits include creating AIDSRides and sparking the multi-day, four-figure fundraising event phenomenon, says that the restraints placed upon nonprofits stem largely from an antiquated belief in self-interest as a “sure path to the eternal damnation,” one that arrived in this country with the Puritans who found a palliative for their rampant capitalism in charitable contributions.
Not only do “not-for-profits” have to contend with a narrow-minded and negative label, he says, but they are subject to conventions and restrictions that do not apply to their for-profit peers. Charities are discouraged from paying competitive salaries to top executives, paying for innovative advertising campaigns, and incurring substantial overhead, and they are also subject to unrealistic timeframes in which to produce results, discouraged from giving investors a return on their donations, and usually given only one chance to take a risk and prove a concept.
All of this got us thinking, with $300,000 billion donated annually to the coffers of charities in the U.S. alone, and so little of it going to marketing the needs of the constituencies they serve, how much more effective could those charities be if conventional wisdom were to shift in favor of innovative marketing, long-term investing, and skilled risk-taking on big ideas? In other words, if the domestic violence shelters, after-school programs, medical research, and mentoring initiatives of the world, could make their case the way a marketer of a new fizzy water or the latest nail polish would, how much more money could they raise and how much closer could they get to serving their clients, or, better yet, solving the toughest problems in the world today?
To take it home, how much more successful could those shelters, food pantries, research labs, and children’s museums out there be if they had savvy, well-trained (and well-paid) women leaders at the helm?