Sign In Search Uncharitable is for students, philanthropists, nonprofit executives, institutional funders, donors, and anyone who cares about the great causes of our time. It ventures where no other book on the nonprofit sector has dared to go. Where other well-intended books suggest ways to improve performance within the existing nonprofit paradigm, Uncharitable argues that the paradigm itself is the problem, and calls into question our fundamental canons about charity. We have two rule books; one for charity, and one for everything else. This economic apartheid denies charity the powerful tools of capitalism, while everyone else is permitted to use them without restraint.
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Pallotta reviews the frugal, almost prudish constraints the public expects from nonprofits, everything from a ban on paid advertising to substandard wages for nonprofit employees.
But if we want the nonprofit sector to do without the successful tactics of the business sector--say, marketing--how can we expect the nonprofi t sector to aspire to greatness? How will it ever grow, get results, and reach new supporters? Not only must nonprofits be allowed to use the tools of commerce to thrive and accomplish their missions, Pallotta argues, but the public also needs to get over its mistaken and tenacious fixation on fundraising costs and overhead ratios.
He goes on to show how misleading, easily manipulated, and plainly irrelevant these ratios are, and suggests we instead ask 16 questions that would reveal "What has the organization achieved, and what can it achieve with my donation? If donors and staff members complain that "a dollar spent on advertising could have been spent caring for the needy," he advises the nonprofit manager to explain that exposing new supporters to the cause could result in a tenfold increase in donations.
Even in the conventional wisdom it will scarcely be contended that this leads to an equal choice between the two. We economists would instead blame nonprofit sector managers who reassure donors that their money is well stewarded by signaling their steadfast frugality.
And sociologists would say that employees self-sort into a nonprofit avocation--that is, people uncomfortable with business-sector strategies and culture gravitate toward the nonprofit sector. The nonprofits eventually redeemed themselves in the eyes of the public, but without the revenue generated by the lucrative walking and cycling events, they were forced to lay off staff members and cut programs.
This case study is fascinating, and it will surely invite armchair quarterbacks to reckon how they might have handled both the media and the nonprofit organizations. But that would be hasty. Pallotta has written thoughtfully and forcefully on why and how we limit the effectiveness of the nonprofit sector, and he asks us point-blank to change our thinking.
For the sake of the nonprofit sector, I hope he succeeds. Her research focuses on the economics of nonprofit and philanthropic organizations.