DailyDirt: Changing The Way We Think About Charity

from the urls-we-dig-up dept

Mon, Jun 10th 2013 5:00pm — Joyce Hung

When we donate to charities, it's never clear exactly where the money goes and whether our donations actually benefit the people they're supposed to help. Many donors are often shocked and outraged when they learn that some executives at nonprofit charities are being paid salaries exceeding $1 million. But activist and fundraiser Dan Pallotta thinks this anger is misplaced and could damage charity fundraising, pointing out that people blame capitalism for creating inequities in our society, but then they refuse to let nonprofits use the tools of capitalism to fix the problem. Here are a few more things to think about when it comes to charities.

In a recent TED talk, Pallotta suggested that charities should be rewarded for what they actually accomplish even if it costs a lot. People may not like the idea that their money is being used to pay for a charity's CEO salary or for advertising and marketing, but they should think about it this way -- investing in a capable leader and effective marketing efforts will significantly increase the amount of money raised that can then be used to help those in need. [url]
It's really hard to turn money into help. That's what Tim Myers, founder of the Haiti School Project, realized after having spent more than $100,000 to build a school in Villard, Haiti. [url]
Somaliland's success could be partly due to its lack of foreign assistance. Somaliland has been operating successfully as an independent country since it seceded from Somalia in 1991. Since Somaliland isn't recognized as a country by the rest of the world, it hasn't been able to receive foreign aid. As a result, it has been surviving by raising local tax revenues, which its citizens have been using as leverage to make the government more accountable.[url]
Experts at The Center for Global Development suggest that there may be an "aid-institutions paradox" in developing countries, particularly in sub-Saharan Africa. They concluded that foreign aid could undermine a developing country's long-term institutional development and that donors should consider giving money to other more beneficial development activities, such as eradicating endemic diseases, peacekeeping, regional or global public goods, and debt relief.[url]

If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post via StumbleUpon.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: capitalism, charity, dan pallotta, debt relief, donations, economics, foreign aid, fundraising, marketing, nonprofits, tedtalk

11 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous, 10 Jun 2013 @ 5:11pm

Tshirthell has a shirt that says, "Sharing Is Caring. F*ck The RIAA".
[ link to this | view in thread ]
Anonymous Coward, 10 Jun 2013 @ 5:46pm

CEOs
"In a recent TED talk, Pallotta suggested that charities should be rewarded for what they actually accomplish even if it costs a lot. People may not like the idea that their money is being used to pay for a charity's CEO salary or for advertising and marketing, but they should think about it this way -- investing in a capable leader and effective marketing efforts will significantly increase the amount of money raised that can then be used to help those in need."

If CEO salaries were proportional to their actual worth compared to all the other employees put together, this wouldn't be much of an issue. In reality, top CEOs' salaries are way out of proportion to their relative contributions. Workers could manage themselves and still accomplish great things, but a CEO without workers isn't worth a damn.
[ link to this | view in thread ]
Beta (profile), 10 Jun 2013 @ 6:28pm

Scrooge saves the world
An organized charity has two purposes: 1) to help those poor illiterate starving Lower Slobbovians, and/or 2) to give warm fuzzy feelings to donors in exchange for their money.

If the second goal dominates, then the less said about what really goes the better. The charity serves its purpose whether or not it does any good for the poor, or even whether or not the poor people in question really exist. Competition between charities will destroy those that waste their money on actually helping people (although "help" that cripples a society can be useful to the charity in the long run).

To pursue the first goal, donors must demand results-- real results, not just children's letters in crayon. And for getting results, nothing beats...

You know, this time I think I'll let somebody else take the heat for suggesting that capitalism is good for the poor.
[ link to this | view in thread ]
Anonymous Coward, 10 Jun 2013 @ 7:46pm

There's no such thing as a for-profit charity that's a business that makes/does charitable donations/deeds with it's profits.

The main problem with a charity executive earning a $1 million salary is the vast number of people donating to that charity cold only dream of earning a similar salary. They are donating a portion of their relatively meagre income to a cause that they believe needs financial support, why is this executive in charge if they don't care about the cause enough to take a much more modest salary and help the cause themselves.
[ link to this | view in thread ]
JackOfShadows (profile), 11 Jun 2013 @ 2:33am

Effective non-charity
One particularly effective non-charitable organization that I found while studying economics is the Grameen bank. Micro-loans are far more efficient, and far less corrupt, than typical foreign aid programs.
[ link to this | view in thread ]
Richard (profile), 11 Jun 2013 @ 2:58am

Re: Scrooge saves the world
To pursue the first goal, donors must demand results-- real results, not just children's letters in crayon. And for getting results, nothing beats...

Communism - Chinese style...
[ link to this | view in thread ]
Richard (profile), 11 Jun 2013 @ 3:01am

Re: Scrooge saves the world
And for getting results, nothing beats...

The John Lewis Partnership.
[ link to this | view in thread ]
Richard (profile), 11 Jun 2013 @ 3:11am

Re:
Doesn't it all just become like this guy:
http://www.jonlajoie.com/kickstarter
[ link to this | view in thread ]
ChrisB (profile), 11 Jun 2013 @ 6:40am

Re: CEOs
> Workers could manage themselves and still accomplish great things

Name one worker-run company where this is true.

Hey, if you don't like a CEO's salary, don't do business with that company.
[ link to this | view in thread ]
Rob McMillin (profile), 11 Jun 2013 @ 7:06am

Dan Pallotta, Scam Artist
Silicon Valley has created some of the most effective con men of our age, and so it is no surprise that someone like a Pallotta would arise and adopt their language and tenor. He takes every bad impulse of large charities -- high overhead, large staffs, and mission creep -- and turns them, somehow, from vices into virtues. But the approach he advocates in his TED talk would be utterly indistinguishable from that employed by the Humane Society of the United States and dozens of other money mills purporting to operate as charities, but which in fact are frauds perpetrated upon a gullible public.
[ link to this | view in thread ]
Teamnutfundraising (profile), 12 Jun 2014 @ 3:16am

Fundraising
Its a good job. I am impressed with your blog because it has very effective techniques and tips.
[ link to this | view in thread ]