What an incredibly interesting read. Pallotta challenges the way the not for profit sector is set up and mostly he challenges the perception that ratios are a good indicator of organisational efficiency. I truly support his viewpoint (in fact I’m pretty sure I lost out in a job interview for suggesting this!).
I started out my fundraising career in an organisation where, when it came to advertising or doing any sort of promotion around our campaigns, the motto was “free first” and then we will see ! And this was in a time before social networks. So I began to think of this as the norm (which I suppose it is) and also became quite proud of the ability I had to get a message out there for little or no money and getting a return.
Recently I have begun to realise that perhaps thats not the way, perhaps its not something to be really proud of, perhaps spending money is what needs to happen. I have begun to realise it, but have had little or no success in bringing it about. It really came to the fore for me last year when I was given a budget of 5,000 pounds to advertise a national campaign in the UK, in January! Try make that work.
I’m not suggesting that simply spending money will make your campaign work, you need to have a plan, but surely we should look at is as part of the plan. Some charities do and guess what, they are the big ones. People may suggest that they can do it because they are so large, but is the reality not they are large because they do it?
Of course the challenge we face is convincing the donating public that this is a good use of their funds. Pallotta suggests that we have sort of dug our own grave here as we pay homage to the organisations that rate us, simply on how little we spend (ratios). When we get questioned about it, we defend our ratios, and try and make them as small as possible. We see it every christmas where the media writes articles about how much a charity spends or how much per christmas card actually goes to the cause. We should quench these fires but not adding fuel to them (ie commenting in the defensive). We should take a stand, as an industry, and challenge the media to do a piece on the impact of our work. Ask them to consider the benefit of the money we are getting, rather than how much it is costing us to get it.
Again I am not advocating that we spend all our donors funds on marketing or that a charity with a high ratio is now all of a sudden better, because they are spending on this rather than programmes. What I am suggesting (well really what Dan Pallotta is suggesting, and Im agreeing) is we that we need to be able to operate in the marketplace and compete for peoples discretionary funds.
When I was reading the book I wondered if there was a way we could fund such spending. We are seeing more and more charities move towards donor centric fundraising. Fund a project that takes your fancy. Well what if we offered the donor the chance to fund our next marketing campaign, invest in bringing more good to the cause they are passionate about, by bringing more people into the net? This way there is total honesty and transparency…we are going to use your money to fund this campaign and we believe by doing this we can bring 10 times more money into the organisation (its almost like a matching campaign?)
There is so much to talk about around what Dan Pallotta has written. He makes such a great argument for paying people in the sector well, if we dont we will lose the best and the brightest, at their prime, to the for profit sector. If we do we can attract them to this sector and we can also keep the best and the brightest that we already have.
If you want to read a short overview of what Dan Pallotta is talking about check out his Harvard Business Review post here and take a look at the video below.
I really would love to hear your comments on this post