Are our attitudes toward nonprofit fundraising undermining the causes we love and our desire to change the world? Dan Pallotta, founder of the AIDS Ride and Breast Cancer 3-Day events, gave a bold speech on the subject for TED, a nonprofit devoted to “Ideas Worth Spreading”. Pallotta’s argument is that, unlike our expectations for the private sector, we unfairly hamstring nonprofits by expecting that they make a difference while at the same time requiring that they spend as little time and money as possible attracting talent, marketing, taking a risk on new ideas, and attracting capital. Is he right that we have a double standard? Is our thinking about charity in America completely backwards?
In May, Transform Consulting Group blogged talked about how nonprofits and other charitable-based organizations are being evaluated with new scrutiny. Funders want to know how their money is being used and whether they are getting the most “bang for the buck”. Transform has also blogged that while financial efficiency is an important measure of a nonprofit’s effectiveness, skimping on overhead can create a vicious cycle that limits a nonprofit’s ability to achieve impact.
Pallotta argues that overhead is part of the cause, not something that should be minimized. He posits that low overhead forces charities to forego what they need to grow. Do we really care what the overhead of a charity is if it is successful at solving social problems? “Our generation does not want its epitaph to read, ‘We kept charity overhead low.’ We want it to read that we changed the world,” says Pallotta. Watch the video here.
At Transform Consulting Group, we agree that an organization’s impact is the critical measure of success. We can develop a plan and put systems in place that document and validate the impact that your organization has in our community.Transform Consulting Group can also help organizations use those outcome measurements to make the case to funders. Contact us today for a free consultation!