Today I’d like to discuss the fifth 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 that for-profit companies have the ability to pay people (i.e. investors) profit in order to attract risk capital for new ideas, whereas no such concept exists in the non-profit world (in fact, it seems to go against the very nature of philanthropy).
Dan asserts that this situation leaves the NGO world starved for growth, risk, and idea capital. I agree with his point, and I honestly do not have a brilliant solution for it. This may sound simplistic, but this is where the non-profit field has to appeal to the emotional side of the donor. They need to want to give because they want to give, not because they are going to get something financial in return (except perhaps a tax break? 😉 ).
I think an effective way to do this is to try to connect a donor with an individual person that they are helping (of course, in a way that this does not intrude on the recipient’s privacy). For example, in a children’s charity, perhaps donors could sponsor a single child, and therefore feel that the child’s successes are in fact also “their” successes. I know that the idea of “sponsoring a child” is not a new one. I guess what I am trying to say is, because NGOs cannot return profit to their donors in order to attract money for new projects, I think we should try and focus on creating a personal connection between the donor and our cause.
Or maybe it’s time to totally revamp the “non-profit” institution, and allow donors to become “investors”, and to receive a portion of profit on long-term projects?
What do you think?