Judging Nonprofits Only by Lowest Overhead?

Dan Pallotta, on ted.com, points out that for many of us our way
of viewing nonprofitsDanPallottaTedDotCom is “dead wrong.”  He said that questions about overhead can too often limit nonprofits and restrict their growth.  You can view the entire piece on ted.com, but here are a few excerpts:

“Real social innovation . . . involves charity. I want to talk about how the things we’ve been taught to think about giving and about charity and about the nonprofit sector are actually undermining the causes we love.

“[A] dangerous question is, “What percentage of my donation goes to the cause versus overhead?” . . . First, it makes us think that overhead is a negative, that it is somehow not part of the cause. But it absolutely is, especially if it’s being used for growth. Now, this idea that overhead is somehow an enemy of the cause creates this second, much larger problem, which is, it forces organizations to go without the overhead things they really need to grow in the interest of keeping overhead low.

“If we could move charitable giving from 2% of GDP up just one step to 3% of GDP, by investing in that growth, that would be an extra $150 billion a year in contributions. . . . Now we’re talking the potential for real change.

“So the next time you’re looking at a charity, don’t ask about the rate of their overhead. Ask about the scale of their dreams, . . . how they measure their progress toward those dreams, and what resources they need to make them come true.”

 

 

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