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But Giving has ALWAYS Worked This Way!

2011 May 5

Earlier this week, Dan Pollatta, writing for the Harvard Business Review, dared to propose a BIG IDEA that involved redirecting some of Warren Buffet’s donation to the Gates Foundation to activities that could grow the entire philanthropic sector immediately. I was surprised to read the numerous comments railing against this notion. I guess I expected a little more cutting-edge thinking from those who read the Harvard Business Review.

RED HERRING ALERT! OLD DATA MUST BE UPDATED OR SYSTEM WILL IMPLODE!

All kinds of outdated modes of thinking/acting operating around the world TODAY are justified by this simplistic explanation: “But it’s always been this way!” To wit: But we’ve never sent our girls to school; but people with disabilities have always been outcasts in our society; but maximizing returns for shareholders has always been the sole purpose of corporations; but nonprofits have always kept overhead as low as possible; but people working in nonprofits have always scrambled for funding and paid non-living wages.  Sound familiar?

Does “because that’s how we’ve always done it” make it right, better, best?  Innovation is one of our country’s greatest strengths, and it is coming fast and furious right now in all sectors of productivity. It’s coming to the nonprofit sector, too.

The history of low overhead for nonprofits, low salaries for executives, and practically no pay for workers comes in large part from our nation’s past when charitable activities were initially provided primarily by the religious sector and then by white-gloved society ladies who volunteered their time and $ to benefit the needy.

We’ve come a long way, baby.  Those volunteers are in short supply these days, most potential volunteers being employed in paying jobs.  Nonprofits struggle to find volunteers to join their boards of directors, let alone donate their time or work in the trenches!

The old overhead argument – that we judge the value of a nonprofit by how little it applies to “overhead costs” has been refuted by scientific study to be a red herring!  Not surprisingly, it turns out that you get exactly what you put into operating a nonprofit organization.  Low overhead correlates with low outcomes (ie, amount of its mission that is realized).  Low overhead means old computers that are too slow to allow productivity, copy machines that never work, buildings that need constant repair,

The nonprofit sector is in dire straits.  Government sources of funds are eroding rapidly.  The state of the economy has triggered lower giving (by 35% on average among the wealthy as opposed to everyday households where giving actually increased to offset the decrease among wealthy donors).

What the majority of everyday donors don’t know is that they have tremendous power to generate change through their affordable giving.  At Give a Little, we’re spreading the word and building a movement to inform, inspire and empower everyday donors; but we could use funding for a few BID IDEAS to really get that word out: that it will be everyday donors who fund the solutions to our most pressing social challenges.

Don’t be afraid of BIG IDEAS for the nonprofit sector. Good, ethical brains are creating novel approaches to encourage philanthropy and to generate solutions that will use that philanthropy to change the world.  Believe it.

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  1. May 23, 2011

    Hi,
    Thanks for such a nice post and I feel that it will surely motivate and inspire all those people who read this post to do some charitable work.
    🙂

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