I’m a busy guy but I make the time to work with charities because I want to make a positive impact on the world around me. When I find an organization I like, I’m not terribly picky about the capacity in which I serve it. However, when I donate money to an organization and especially when I am not directly involved in its operation, I become a little more fickle. I want to make sure my money goes to the cause and not to some fat cat CEO or any other superfluous overhead. Or at least that is how I used to think. Let me explain.
In many ways a charity such as one dedicated to helping disabled seniors, curing kidney disease or the restoration of the Chesapeake Bay operates just like any other business. They need personnel to run the organization and to bring the service to market by having some sort of administrative structure and staff. Just like a business, they also need to build awareness of what they do and how they do it by hosting events and running promotions. But most importantly, both a business and a charity need funds to facilitate all of these items! I’d like to take a closer look at this last point.
If you were looking to invest a sizable amount of money into a company, you would want the infusion of cash to lead to better results measured, of course, by increased revenue. So, what parts of the business should receive the support of your funding? Would you want the money spent on finding and recruiting talented leadership? Would you want that money to go towards training staff? Would you want a chunk of it dedicated to marketing and advertising the product or services? Interestingly, all of those items are considered overhead and that is ABSOLUTELY where I would want my money to go if I wanted a good ROI.
Now — if you donated a large amount of money to a charity, how would you want that money spent? Chances are you have a different answer. I know I did, because I clearly stated no fat cat salaries and keep the overhead as low as possible. Why do I have an apparent double standard?
When I give to a charity, my personal morality drives what I feel is the correct appropriation of those funds. In other words, I focus on the morality of where my money is being spent vs. the frugality of how the money is allocated in the hopes of giving the organization the best chance of serving its mission.
The mindset of morality versus frugality and its impact on the effectiveness of ANY charity, is the core discussion of an 18 minute Ted Talk video I received in preparation of a recent board retreat I was asked to facilitate.
Here is the title and link:
Dan Pallotta’s Ted Talk, “What we think about charity is dead wrong.”
This is a topic that literally affects all of us in some way, shape or form. I don’t want to give away too much about this powerful video. So if you’re curious, I invite you to watch it. If it leaves you with a strong impression, I would love to hear about them in the comments below.
Respectfully,
Chris
