The TED talk everyone in the social sector is talking about – and what needs to change
Krista Donaldson
Design Strategist | Health Equity, MedTech & Biodesign | Author | Speaker
If you have ever made a donation, let alone are in the social sector – you need to watch Dan Pallotta’s TED talk “The way we think about charity is dead wrong”. If you haven’t seen it, watch it now. (Yes, now.)
Dan, the founder of the AIDS Rides, delivers a staggeringly on-target analysis of the key “ethical” roadblocks that prevent non-profits from achieving our missions effectively, among them: tying nonprofit salaries to impact, advertising, and taking risk. Non-profit social enterprises are not supported to deliver what we promise – and what many of us are so passionate about – social impact. We need to change that.
One of the areas he tackles is the issue of an organization’s overhead. There is an unspoken rule of thumb with most donors that a “good” nonprofit’s overhead (G&A and fund-raising) needs to be less than 25%. I learned this last year when the organization I lead, D-Rev, had its first audit and we were at 25.7%. Despite our rapid growth and what we’ve accomplished while being “lean” (euphemism for “totally under-resourced”), we are actually penalized for great practices, like having an audit. Audits count as part of overhead – significantly so, in our case.
By positioning overhead versus cause, he says donors are pitting “frugality versus morality” by not recognizing that overhead supports the cause. AIDS Rides had a 40% overhead with an aggressive marketing campaign, and as a result were skewered in the media and lost major sponsors. Nevermind that they had raised $581M for their cause.
What makes his talk powerful is that he doesn't just take on one of the standard maxims of philanthropy, like overhead, but many – some of which support an industry that measures philanthropic effectiveness. He does this richly and backed up with real and painful examples. What I love most though is that he speaks for those of us who are trying to innovate in the social sector in untraditional ways, and provides a stellar example of how to raise the conversation to the next level – for our causes. People will be talking about this talk for a long time.
Bottomline: Donate to organizations that are achieving real and measurable impact, and trust them to spend your money effectively doing that.
CEO at CAFEdesign
9yI've been thinking this for years. Am so happy Dan, albeit through unfortunate circumstances, found the opportunity to address this critical issue in the nonprofit sector.
Managing Director at Lorica Partners
10yReally made me rethink my views towards charity
Head of Alumni Relations 🎓 Networking Expert and Serial Entrepreneur 🤝 Accomplished Fundraising Specialist 💯 Board Member 🎤 Kiwanis President Wien Belvedere
11yGreat TED talk everyone working in the Nonprofit world should watch!
Author, editor, freelance writer, book designer
11ySeems reasonable to me. Very engaging talk, but it appears some of the commenters are aren't convinced. I'll watch from the sideline since I'm not personally invested, but believe me from now on when I'm approached by a charity for a donation, I won't ask "what percentage goes to overhead" I'll be asking "how big is your pie?"
Lecturer, Design and Manufacturing Engineering, at University of Eldoret, Department of Mechanical and Production Engineering
11yThe best charity, is when the underprivileged is helped to cross the poverty line and in turn able to help another underprivileged to pass the poverty line and eventually the circle continuous.