Dan Pallotta has become a household name in charity landscape. As an activist, fundraiser, and entrepreneur, his provocative TED Talk, “The way we think about charity is dead wrong,” set the non-profit world abuzz. His main argument? We need to stop judging nonprofits on their overhead rate, and base their effectiveness on impact.
In local media, Pallotta elaborates by saying we often look at the overhead involved in fundraising events such as races or dinners and say it’s too high, that we’d rather donate directly to the cause.
The problem, he explains, is we rarely do—without the event, we lose the incentive to donate.
“(We’ve) trained people to think that overhead is bad and is somehow not part of the cause, but it is, especially if it’s being used for growth,” he says.
He believes nonprofits are often too small to effectively solve the social problems they’re dealing with, such as homelessness and poverty: “The big picture is that these social problems are massive in scale and these organizations are tiny up against them.”
See Pallotta make his argument in the TED Talk below: