Thoughts on Ted Talk with Dan Pallotta—The Way We Think About Charity Is Dead Wrong

In March, 2013, Ted Talks were held at Long Beach and one of the speakers was Dan Pallotta.  He shared his thought that the way we have been taught to think about non-profits undermines charity and “the causes we love and our profound yearning to change the world.”  Pallotta who has raised millions for breast cancer and AIDS research is considered by many as an expert.  He states that there are two rule books in play, one for non-profits and the other for for-profits.  He points out his belief that this started with the Puritans who were aggressive capitalists who were taught to feel badly about the money they made by their Calvinist beliefs.  So to do penance for making money, charity became a “place for penance” and since you can’t make money when you’re doing penance for making money, the entire notion that all of the donated money should go for the cause instead of profit (more recently translated into overhead), was born.

He points out that in his opinion non-profits suffer because they cannot offer adequate compensation to attract the brightest and the best in business to be part of the team or lead the way; they are unable to advertise and market; they are unable to take risks on new revenue generating ideas; they don’t have the time needed to ensure a return on investment; and finally they don’t have the ability to attract risk capital because there is no promise of profit.

Pallotta advocates for looking at philanthropy in a different way if we plan to tackle social causes related to health and human services in a way that will make a difference.  He believes that we can make the philanthropy “pie” bigger is we stop confusing morality with frugality.  His full Ted Talk can be viewed at: 

Dan Pallotta: "The way we think about charity is dead wrong"

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