The way we think about charity is wrong – rethinking nonprofit fundraising

Why, in the for-profit world can a company spend tons on marketing and advertising in order to make tons on their product, yet…

in the nonprofit world it is almost considered criminal if they even say the words marketing and advertising?

Below is a great TED talk given by Dan Pallotta that addresses the “discrimination” that nonprofits face in the areas of: hiring, advertising and marketing, risk of pursuing new ideas, time frame for success, and making a lot of money for their cause.  It’s really special.

Please read or listen to it and let me know your thoughts.

For just a link to his talk click here.

Funding discrimination: Nonprofit v. for-profit world

We will be periodically adding comments about Dan’s talk and how it relates to the real world problems of getting financial support for items like operations, advertising, and the dreaded word….overhead.  Again it’s the discrimination thing that nonprofits face in raising funds.

In general people think that nonprofits should minimize the amount they spend on overhead (advertising, marketing, IT, salaries, etc…).

But take any successful company from Apple to Zappos…where would they be without spending or investing massive amounts on advertising, marketing, IT and salaries?

Spend minimum on fundraising – get minimum return

So would an “investor” in The Joy of Sox, who really wants to support our mission of providing new socks for the homeless, really want us to spend the minimum on fundraising.  For example, would they rather have us put up posters in the local convenience store advertising our bake sale fundraiser and net $250.  But hey, we only spent 2% from the fundraising budget.  Is that the success they are looking for?

Or would more good be accomplished if we held a huge fundraiser and raised $250,000?

But someone with the eye of the “nonprofit police” may complain that we spend, heaven forbid, 40% on fundraising.  But we netted $250,000!!!

It’s the results, not the overhead!

What’s wrong with the thinking that nonprofits need to minimize overhead expenses, while in the successful for profit world their “for profit police” look for at the results and aren’t overly concerned about what percentage of budget went into a marketing item.

In order for the nonprofit sector to prosper and grow we must change the thinking that it’s not the percentage that goes to pay, say the the PR firm, but rather the number of people who are helped by our program!