The way we think about charity is dead wrong. A TED talk with Dan Pallota


An interesting view on the relationship of individuals and charities across the U.S. On this TED talk, activist and fundraiser Dan Pallota calls for a generosity of thought, where Non-profits are judged based on the work instead of their administrative expenses. Palette compares terms such as “overhead” in the For-profit vs. the Non-profit fields questioning why our society tends to believe that marketing, customer service and talent investment is acceptable for one but not the other.

Palotta brings to light his work with the AIDS rides  in 1993 and the campaign for the   Avon breast cancer foundation where he was able to convert a 350 thousand dollar investment into to a 194 million revenue project.

The Speaker summarizes our social issues with charities into 5 components that represent what is wrong with the system and call for an innovative social change.

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1. Compensation: Our system of ethics tends to make us think that only the rich should donate. We need to learn that everyone should make the economical sacrifice no matter the economical status.

2. Advertising & marketing: Donor often express their concerns on how donations are being spent on advertising, instead they think it should be spent on the needy. Palotta advises however that some of the most successful campaigns such as  AID’s rides required of heavy  investing in marketing,  yielded above goals result, offsetting the cost of the investment.

3. Taking risk on new revenue ideas: Non-profits have to take risks just like any other corporations. If you never fail, you kill innovation if you kill innovation you don’t grow and therefore you don’t generate revenue.

4. Time: companies such as Amazon went through 6 years without profit return however Non-profits are questioned hard when revenue  is not generated it right away, in this case Pallota says that Long term goals to build a market require patience.

5. Profit to attract capital risk: Non profits cannot invest on marketing, talent, customers, time as For-profits organizations do; this puts non-profits at disadvantage.

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