The most daring questions of all?

by Christiana Stergiou

After hearing Dan Pallotta, author of Uncharitable, speak at the closing plenary at the International Fundraising Congress in the Netherlands in October, I know that his challenging and controversial ideas will be welcomed by fundraisers at FIA’s annual conference, Dare to Be Different on the Gold Coast in 2012.

Dan’s focus is on a big concept: are we, as a sector, able to respond to the big changes that we need to make – a cure for breast cancer, the elimination of hunger and poverty – in a reasonable timeframe? Not forty years from now, but perhaps seven? Dan’s question then, is if we’re not capable of that type of achievement, why?

Dan contends that the reason is that there are two rule books: one for charity and one for the rest of the economic world.
While much of the inequity may be caused by the for-profit sector, he argues that our society refuses to allow the nonprofit sector to use for-profit tools to bring about change.
Dan believes that the restrictions placed on charities are simply uncharitable. He looks at five main areas:

  1. Compensation. We don’t like to see people make lots of money in charities. Conversely it is acceptable that people make a lot of money not helping other people or even hurting other people.
  2. Advertising and marketing. We don’t like to see our charities spending money on fundraising. Imagine if we said this to a for profit company.
  3. Risk taking. Taking risks to find new ways to increase donation levels. A Hollywood movie company can make a $150 million movie that flops. If a charity does a new fundraising activity that doesn’t make immediate profit in 12 months, then a fundraiser’s character is brought into question.
  4. Time horizon – Amazon went for six years without returning profit to investors because there was a long term plan. Imagine if a charity suggested this?
  5. Attract risk capital. ‘The nonprofit sector is starved for growth capital and risk capital, it simply can not access this.

Dan says that this view of charities is policed by the very simple but dangerous question: “What percentage of my donation goes to the cause rather than overheads?”
They key problems with this question, according to Dan, are:

  1. It assumes that overhead is not part of the cause. In fact, many of the fundraisers at IFC started wearing signs that said, “I am an overhead.”
  2. It means that charities don’t spend money on the things they need to solve the big problem. This is how we institutionalise the smallness of our organisations.
  3. It gives donors really bad information. It tells nothing about the quality of the programs and the help that is given to the community.

The real challenge is what we do about it. Dan says there are two solutions:

  1. Educate the public. Dan is working in the US to develop a charity defence council to counter bad reporting and to undertake public awareness campaign.
  2. We need to prioritise our wildest dreams. We need to do everything we can to meet our big objective.

Dan’s final message was that we must speak our truth. “I am not in this to keep overhead low. I have not dedicated my life to this to meet some arbitary standard. I have dedicated my life to this because I want to see kids stop dying of diarrhea. I want to help people who are blind. I want to help all of them, not a few of them,” he said.
Dan’s message is both important and controversial. What do you think?

Thanks to the crew at xponential.com.au, Dan Pallotta is presenting the plenary session on Thursday 1 March at the Fundraising Institute of Australia Conference, and a panel session to discuss the key concepts will follow. Bring your board members, bring your CEO, bring your manager. Dan will dare you to be different and to be great. Click here to find out more or to register now.

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