Last week, Roger did a good job of rattling the cage with his post, What Is The Watchdog Watching? He basically said: P*** on the obsession with fundraising overhead.

But that was just a warm-up.

Watch this TED presentation — The way we think about charity is dead wrong — by Dan Pallotta, an extraordinary fundraiser and author of Charity Case.

If you’ve watched the presentation, watch it a few more times … as many times as it takes to ‘re-program’ you and inspire you to take action in your organization.

The first action: make your CEO, CFO and Board watch it. If that doesn’t generate a re-think in how your organization goes about fundraising — specifically, how you invest in fundraising — then find a job in an organization that ‘gets it’.

Dan says that our thinking about giving and charity — the current nonprofit ‘rule book’ — is all wrong. The current rules quash the growth and scale charitable giving needs to effectively address the worthy needs we aim to meet.

What is the wrong thinking in the current nonprofit rule book?

1. Failure to pay commensurate to the for profit sector.

2. Aversion to spending on marketing.

3. Aversion to taking risk to generate new revenue.

4. Aversion to allowing time for scale to develop.

5. Inability to conceptualize ‘profit’ in the nonprofit sector so as to attract capital.

The fear of public criticism — for ‘diverting’ resources from ‘program’ — that lies behind this mistaken thinking is the reason the nonprofit sector in the US has remained at 2% of GDP since this measurement first began in 1970. And the reason only 144 US nonprofits grew to revenue over $50 million in the period from 1970 to 2009.

At the core of the problem, says Pallotta, is a mindset that treats ‘overhead’ as the enemy, instead of as a vital enabler of the mission.

At the end of his presentation, Dan asks: after devoting our lives trying to solve huge social challenges, do we want our epitaph to read … “We kept charity overhead low?”

Watch Dan’s presentation today. This presentation is not just substantively powerful; it’s exceptionally well-delivered as well. Believe me, it will hold your — and your Board’s — attention for 18 minutes.

If anyone has ever deserved an Agitator raise, Dan does!

Tom

P.S. In his post Fundraising Desperation And Chaos In 2013, Roger opened the year by urging Agitator readers in the same direction. He challenged fundraisers to “Think bigger and demand bigger”:

“What our sector desperately needs for growth is liquidity. Money to invest in growth, without diverting funds from programs and mission. But sadly there are lots of preconceived “no-no’s” and just plain ignorance when it comes to investing in growth – and ‘cost of fundraising’ leads the list. There’s no reason to deny a nonprofit access to proper financing options other than our own squeamish fear of what some watchdogs might think.”

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