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Don’t Confuse Morality with Frugality!

Don’t Confuse Morality with Frugality!

It seems that everyone in the world knows about TED except me.  (If you don’t know about it either, I’m glad – it makes me feel better!)  Anyway, TED is a nonprofit devoted to, in its words, “Ideas Worth Spreading.” It started out in 1984 as a conference bringing together people from three different worlds:  Technology, Entertainment and Design.  Over the years, it has grown tremendously in scope and in so doing, has embraced the Internet as a way to leverage its reach.  I urge you to check it out.
Viewing a recent TED talk by Dan Pallotta entitled “The Way We Think About Charity is Dead Wrong” is well worth investing the requisite 18 minutes out of your otherwise busy life.  Dan is best known for creating the multi-day charitable event industry, including the AIDS Rides and Breast Cancer 3-Day events, which raised $582 million in nine years. He is president of Advertising for Humanity, which helps foundations and philanthropists transform the growth potential of their favorite grantees.
We recently explored one of Dan’s theses in Charitable Nation, that being that charitable overhead is not inherently bad if it helps the organization become more effective.  However, Dan goes into far greater (and, dare I say, more interesting) detail, examining how philanthropy has historically been relegated to a second or even third class position vis-à-vis the for-profit world and is routinely criticized when overhead costs appear “excessive” – criticism that would never occur in the for-profit world where the accepted economic maxim is that a dollar of marginal cost is worth incurring when more than a dollar of marginal benefit is anticipated.  Dan dares to dream big dreams and he challenges us to do so as well.
On the one hand, Dan’s talk is somewhat depressing, presenting this Sisyphean vision of a philanthropic world doomed to failure for lack of proper investment and understanding by society.  On the other hand, it makes the point that real change is possible if we abandon some of our outmoded ideas and look to invest in philanthropy in the right ways.  Some of the subsequent TED commentary surrounding Dan’s talk questions his math, which is understandable and fair and should be read in context with the video. I have not yet had a chance to review these thoughts but intend to do so (after the tax busy season, of course!)
If our collective goal is to try to solve some of society’s most pressing problems and, as philanthropists, truly move from success to significance, then it behooves us to listen to Dan’s words.

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