To say that author Dan Pallotta goes against the grain with his new book, Uncharitable, is an understatement. His controversial thesis: that a public expectation for charities to be prudent, nonprofit and saintly simply makes them less effective. Thought provoking and unconventional in its approach, this book will have many re-examining how nonprofits should operate.
Uncharitable urges charities to free themselves from their ideological and economic constraints. Where other books suggest ways to improve a nonprofit’s performance within the existing paradigm, Uncharitable suggests that the paradigm itself is the problem and calls into question our fundamental beliefs about charity.
Double standard inhibits charities’ impact
Pallotta argues that society’s nonprofit ethic acts as a strict regulatory mechanism by denying the sector critical tools and permissions that the for-profit sector uses without restraint; for example, no risk-reward incentives, no profit, counterproductive limits on compensation, and moral objections to the use of donated dollars for anything other than program expenditures.
These double standards place the nonprofit sector at extreme disadvantage on every level. While the for-profit sector is permitted to use capitalistic tools to advance the sale of consumer goods, the nonprofit sector is prohibited from using any of them to fight hunger or disease. Capitalism is blamed for creating the inequities in our society, but charity is prohibited from using the tools of capitalism to rectify them. The very ethic we have cherished as the hallmark of our compassion is in fact what undermines it.
This irrational system, Pallotta explains, originates from the Puritan ethics that banished self-interest from the realm of charity. Policed by agencies and hindered by the use of flawed “efficiency” measures we are doomed to mediocrity. By declaring our independence from these obsolete ideas, Pallotta theorizes, we can dramatically accelerate progress on the most urgent social issues of our time
He shares his opinion on common misconceptions with themes such as these:
Constraints on compensation: charity and self-deprivation are not the same thing
Prohibition of risk: punishing courage, rewarding timidity
Discouragement of long-term vision: the need for immediate gratification institutionalizes suffering
Prohibition of investment return
In addition, the author discusses what type of measurement is effective, provides some thoughts on efficiency and includes case studies.
Reviewer’s Note: Dan Pallotta, the author will speak on the thesis explored in his book at the Canadian Fundraising & Philanthropy conference: Surviving and Thriving in Challenging Times on Tuesday February 17.
What people are saying about Uncharitable:
“Challenging hallowed premises is difficult; challenging the foundational premises underlying our understanding of charity is even more so. Dan Pallotta has done exactly that and, in doing so, requires us all to rethink the very nature of what it means to be charitable and how charity actually functions. He liberates charity from its Puritan constraints and cogently attaches it to entrepreneurship in a way that should make us all take two steps back and imagine a new philosophy and theory of charity itself. This is nothing less than a revolutionary work.” - Gary Hart, former United States senator and Scholar in Residence, University of Colorado
“What scales would our nonprofit organizations have to achieve to eradicate the great social problems that confront us, and how do our traditions and beliefs about charity stand in their way? Dan Pallotta has elevated the questions we need to be asking. His book provocatively challenges traditional views of how charities should operate and provides a thought-provoking alternative.” - David Ho, Time Magazine Man of the Year, 1997; Director, Aaron Diamond AIDS Research Center
“Uncharitable poses a bold challenge to the orthodoxy that drives American nonprofit business practice. In an era when civilization is challenged with unprecedented threats from disease, climate change and globalization, unleashing imaginative leadership in the creation of social good is of paramount urgency. If we are indeed going to succeed in innovating our way to a sustainable future in the 21st century, we will need to unlock the moral and creative potential of the nonprofit sector, enable it to interact more comfortably and flexibly with the market, create the right incentives for the recruitment of America's most talented social innovators, and rethink our approaches to capitalizing our best ideas and institutions. If this is heresy, we need more of it.” - Raymond C. Offenheiser, President, Oxfam America
“Dan Pallotta voices what nonprofits don't dare mention, for fear of losing their donor support: why fundraising expenditures are not only good, they are essential for nonprofit survival; how investment in “overhead” can catapult an organization into a more efficient and productive sphere of operation; how donor distaste for spending on marketing puts our greatest causes at a severe disadvantage to the giant consumer brands; how low salaries prevent nonprofits from attracting top talent to the world's most important jobs. Pallotta's testy and spirited review of the public's weird misconceptions about how nonprofits ought to run should be required reading for all nonprofits, board members, donors and foundations.” - Renée Irvin, Associate Professor, Director, Graduate Certificate in Nonprofit Management Program, University of Oregon
Dan Pallotta
Dan Pallotta founded Pallotta Team-Works, the company that invented the AIDS Rides and Breast Cancer 3-Day events, which raised over half a billion dollars and netted $305 million in nine years—more money, raised more quickly for these causes than any known private event operation in history. 182,000 people participated in the events. The company had more than 350 full-time employees in sixteen U.S. offices, was the subject of a Harvard Business School case study, and fundamentally re-invented the paradigm for special event fundraising in the U.S.
