Rewarding Charities for Upholding Big Goals and Achieving Social Profitability

Changing attitudes towards not-for-profit spending

Let’s take the altruistic attitude about not-for-profits – especially in relation to spending and expenses – and turn it on its ear.

Many of us recognize that causes and charities are as much a business as any in the private sector, and equally accountable to the bottom line.

Yet, it takes money to make money, even for charities. Is it morally wrong or should it be chalked up to the necessary cost of doing business today? What impact does it have on Social Profitability?

A pundit who wields some influence for me is humanitarian activist and fundraiser, Dan Pallotta, best known for his multi-day charitable events such as Breast Cancer 3-Day walks, AIDS Rides bicycle journeys, and Out of the Darkness suicide prevention night walks. Over nine years, 182,000 participated in these events and raised $582 million. He knows from whence he speaks.

Dan called attention to this double standard in a TED Talk,  which has been viewed more than 3.4 million times, and is one of the 100 most-viewed TED Talks of all time. Pointing out that there is one set of rules for the not-for-profit sector and another for the rest of the economic world, there exists a clear and inbred discrimination. We reward the not-for-profit sector for how little they spend – rather than for what gets the job done.

Does frugality equal greater proceeds for the cause? Not necessarily. Sometimes it takes big money to see big accomplishments, and those results may not even be realized for a few years’ time.

I personally have worked on and participated in many charitable causes and events. I’ve seen the results that can be achieved when money is spent to promote marketing, advertising and media buys, and when resources are engaged and activated to amplify the results.

Sure, you can see some measure of results from plastering neighbourhoods with flyers to announce your event. Now scale that up and dedicate a sizable budget to include POP & RFIs, newspaper ads, radio and tv spots, digital and online ads, transit advertising… you see where I’m going with this.

In the for-profit world there is an acceptance of spending for advertising, but the public doesn’t approve of dollars spent on advertising for charities. The popular consensus has been that people want the sum of their money to go to the beneficiary.

If charities can’t advertise all the good that they do, how will people ever know?

Consider that the amount of what you can achieve grows exponentially in multiples of what you spend. Spending on a larger scale creates more awareness and engages more people to want to participate, fundraise and donate, which would not have been possible otherwise.

Dan’s work brought the practice of four-figure philanthropy within the reach of the average citizen who had never raised money for charity before. It can be done.

That’s a lot more than the nickels, dimes, quarters and dollars that come from thinking small and running charitable events on a small scale.

Instead of equating frugality with morality, as Dan says, “let’s start rewarding charities for their big goals and big accomplishments (even if that comes with big expenses).”


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