The Sin in Doing Good Deeds?

If a businessman rakes in a hefty profit while doing good works, is that charity or greed? Do we applaud or hiss?  

A new book, “Uncharitable,” seethes with indignation at public expectations that charities be prudent, nonprofit and saintly. The author, Dan Pallotta, argues that those expectations make them less effective, and he has a point.

Mr. Pallotta’s frustration is intertwined with his own history as the inventor of fund-raisers like AIDSRides and Breast Cancer 3-Days – events that, he says, netted $305 million over nine years for unrestricted use by charities. In the aid world, that’s a breathtaking sum.

But Mr. Pallotta’s company wasn’t a charity, but rather a for-profit company that created charitable events. Critics railed at his $394,500 salary – low for a corporate chief executive, but stratospheric in the aid world – and at the millions of dollars spent on advertising and marketing and other expenses.

Taken from New York Times, thanks to Karen for sending on

“Shame on Pallotta,” declared one critic at the time, accusing him of “greed and unabashed profiteering.” In the aftermath of a wave of criticism, his company collapsed.

One breast cancer charity that parted ways with Mr. Pallotta began producing its own fund-raising walks, but the net sum raised by those walks for breast cancer research plummeted from $71 million to $11 million, he says.

Mr. Pallotta argues powerfully that the aid world is stunted because groups are discouraged from using such standard business tools as advertising, risk-taking, competitive salaries and profits to lure capital.

“We allow people to make huge profits doing any number of things that will hurt the poor, but we want to crucify anyone who wants to make money helping them,” Mr. Pallotta says. “Want to make a million selling violent video games to kids? Go for it. Want to make a million helping cure kids of cancer? You’re labeled a parasite.”

I confess to ambivalence. I deeply admire the other kind of aid workers, those whose passion for their work is evident by the fact that they’ve gone broke doing it. I’m filled with awe when I go to a place like Darfur and see unpaid or underpaid aid workers in groups like Doctors Without Borders, risking their lives to patch up the victims of genocide.

I also worry that if aid groups paid executives as lavishly as Citigroup, they would be managed as badly as Citigroup.

Yet there’s a broad recognition in much of the aid community that a major rethink is necessary, that groups would be more effective if they borrowed more tools from the business world, and that there is too much “gotcha” scrutiny on overhead rather than on what they actually accomplish. It’s notable that leaders of Oxfam and Save the Children have publicly endorsed the book, and it’s certainly becoming more socially acceptable to note that businesses can also play a powerful role in fighting poverty.

“Howard Schultz has done more for coffee-growing regions of Africa than anybody I can think of,” Michael Fairbanks, a development expert, said of the chief executive of Starbucks. By helping countries improve their coffee-growing practices and brand their coffees, Starbucks has probably helped impoverished African coffee farmers more than any aid group has.

Mr. Fairbanks himself demonstrates that a businessman can do good even as he does well. Rwanda’s president, Paul Kagame, hired Mr. Fairbanks’s consulting company and paid it millions of dollars between 2000 and 2007.

In turn, Mr. Fairbanks helped Rwanda market its coffee, tea and gorillas. Rwandan coffee now retails for up to $55 a pound in Manhattan, wages in the Rwandan coffee sector have soared up to eight-fold, and zillionaires stumble through the Rwandan jungle to admire the wildlife. President Kagame thanked Mr. Fairbanks by granting him Rwandan citizenship.

There are lots of saintly aid workers in Rwanda, including the heroic Dr. Paul Farmer of Partners in Health, and they do extraordinary work. But sometimes, so do the suits. Isaac Durojaiye, a Nigerian businessman, is an example of the way the line is beginning to blur between businesses and charities. He runs a for-profit franchise business that provides fee-for-use public toilets in Nigeria. When he started, there was one public toilet in Nigeria for every 200,000 people, but by charging, he has been able to provide basic sanitation to far more people than any aid group.

In the war on poverty, there is room for all kinds of organizations. Mr. Pallotta may be right that by frowning on aid groups that pay high salaries, advertise extensively and even turn a profit, we end up hurting the world’s neediest.

“People continue to die as a result,” he says bluntly. “This we call morality.”

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More than just donations

Here are two great sites that are encouraging people to help charities, without necessarily having to give donations.

While as a fundraiser I am mostly interested in the donations we need to consider how we can continue to keep people engaged in our cause even at a time when they cant make a donation. Of course the results have to be of real value to your organisation but perhaps they can take on tasks that have typically cost you money. Worth thinking about.

The first is The GiveList  which is “a resource of ways to support communities and causes this holiday season* that don’t necessarily require writing a check.  We all know it’s rough out there this year, but that also means that the needs of people and communities are also greater than every.  There are a lot of ways that a creative do-gooder can continue to help heal the world. And we’re betting, actually praying, that you know a bunch of ways to help.  Share ’em.”

The second is Festive Favours, and they have an advent calendar with a new favour every day, you can check out the favours and choose one that suits you. Great idea and a really nice site.

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Ashland University getting festive

My friend Karen sent this on to me with a simple note…”you will love this”…does she know me or what. This is great, made me feel festive and more importantly made me feel really good about the Ashland University (and I know nothing about them!)

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The Charity Place

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Are you on the Charity Place?

Rachel Beer has set up The Charity Place a site where charity people meet, network & knowledge share. Its a great place with lots of discussions. So check it out here

A donation vacation ?

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Fantastic idea.

I came across this idea from Vibeka Mair and apparently it originated in a brainstorming session from marketing communications agency RAPP  

How great would you feel about your favourite charity if they contacted you and said…Hey if you need to take a break from your committment to us thats ok.  I think it needs to be integrated into a larger organisational strategy. Im not one for encouraging panic, but I also think charities need to be pro-active. I have to say I would feel fantastic if an organisation I supported contacted me to let me know that this offer was there and that it was ok. I believe if I did need to take a break I would try and increase my donation when I can afford to commit again.

Is anyone doing this?

Talk to your donors to increase response rates

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Yes I know….its not rocket science..but so often we just dont do it. We are too busy (too busy to talk our donors…think about that)

Sean Triner wrote a great post last week about this topic and it is well worth a read. Here are some highlights but I would encourage to click this link and read it in full

Here is the plan:
Part I: Immediate action required

Organise a team of people (if you can’t get anyone else, still crack on with it yourself) and invite them for one or two evenings next week to stay late (or come in late) and join you from about 5pm to 8pm.

Part II: Next week – preparation

Do a selection from your database of people that were mailed. Use this criteria:
– Gave last Christmas, but not this Christmas
– They have a phone number, and have not forbidden you from calling

 Part III: Next week – the brief

Brief your team (or if by yourself, use a mirror)

In the call you need to get across these points:

  1. Thank you. You are wonderful. Your most recent gift of x was really appreciated.
  2. A short story about someone or something that benefited from their last gift NOT statistics, but an actual story and preferable in first person.
  3. Ask them if they recall your Christmas appeal sent recently
  4. Remind them about the case study in the appeal
  5. Ask them what they thought about the appeal, if they read it.
  6. Ask them if they were going to donate
  7. If they don’t say they have already donated, then thank them and tell them that you can take the donation by credit card now on the phone if convenient. Most will decline.
  8. process the donation but for those who don’t pay by credit card don’t worry, just say you will look out for their donation.