My Thoughts on Dan Pallotta’s “The Way We Think About Charity is Dead Wrong”- Part 2: Advertising and Marketing in Non-Profit vs. For-Profit

Today I’d like to discuss the second point which Dan Pallotta addresses in his “TED Talk”: “The Way We Think About Charity is Dead Wrong” (you can find the video here in case you haven’t seen it: http://www.ted.com/talks/lang/he/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html?source=facebook#.UUgVUSeiOi1.facebook ), which is the “different rules” that seem to exist regarding advertising and marketing for non-profits versus for-profit companies.

Dan says that in the for-profit world, it is recognized that advertising and marketing is very important, and huge sums of money are allocated toward this. In the non-profit world, however, donors typically do not understand the importance of advertising and marketing, and want their donations to go “directly to the cause”. As Dan explains, what they fail to understand is that investing money in advertising to get the word out about the organization could help bring in even larger donations and therefore even more funds for the cause. People have to be asked to participate … how can they be asked if there are no funds to market and advertise the organization, and therefore reach people?

I have seen the same sort of reluctance in donors who “do not want any of their money to go toward overheard expenses”. With all due respect, I think that is such small-minded thinking!! Especially in this day and age, you need a professional staff (and usually an office) in order to really succeed as a non-profit organization … and a professional staff, office, etc., cost money. When you tell a non-profit professional that you “do not want any of your donation going to overhead costs”, you are basically telling them that they do nothing to further the cause, are useless, and are basically leeching off the organization (or at least that’s how I feel … maybe I am too sensitive? 😉 )

OK, I think I’ve made my opinion very clear. What are your thoughts?

Chava Ashkenazi
Jerusalem, Israel

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6 Responses to My Thoughts on Dan Pallotta’s “The Way We Think About Charity is Dead Wrong”- Part 2: Advertising and Marketing in Non-Profit vs. For-Profit

  1. i will respectfully disagree. reasonable overhead is reasonable. unreasonable is, well, unreasonable. i have donors who don’t mind paying the 10% overhead, but when it is 25% or 40%, forget about it. if you can’t run it efficiently and effectively, then don’t expect donors to show up.

  2. chavaleh1127 says:

    Hi Arnie, thanks for your feedback! I didn’t discuss percentages in the post, but I actually agree with you that 10% overhead is reasonable. I just feel that when a donor doesn’t want to pay ANY overhead, that is the real problem, because they are not recognizing the value and necessity of the overhead costs (staff, office, advertising/marketing, etc.)

  3. hi Chava,
    the issue with overhead is like…
    well it’s just pretty ridiculous because you can cook the books to make your overhead look like whatever you want.
    A lot of nonprofits who say “100% of your money goes to the cause” are doing this.
    The programs, for example, have to take place in a building that you rent, but if you didn’t rent that building, you wouldn’t be able to have your programs. So that means that your rent is part of your program costs. Or is it overhead? This is the loophole people use.

    I’ve written more about overhead here, and would love to get your thoughts on it:
    http://www.wildwomanfundraising.com/uncharitable-culture-of-destitution/

  4. chavaleh1127 says:

    Hi Mazarine,
    Thanks for your feedback! I have also seen non-profits who say “100% of your donations go to the cause”. It makes me think, OK, so who paid for this advertising campaign?

    I’ll definitely check out your post; I’d love to hear more of what you have to say!

    • mazarine – do you agree with what i wrote up above? i want to understand how that ties in to what you wrote. thanks.

    • chavaleh1127 says:

      Hi Mazarine,
      I really enjoyed your piece and wrote a (rather lengthy 🙂 ) comment. It didn’t post right away (perhaps you have to approve it?). In any case, if you don’t receive my comment, let me know, and I’ll try posting it again.

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