Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) [Hardcover]

Dan Pallotta (Author)

Book Description

Series: Civil Society: Historical and Contemporary Perspectives | Publication Date: December 1, 2008

Uncharitable goes where no other book on the nonprofit sector has dared to tread. Where other texts suggest ways to optimize performance inside the existing paradigm, Uncharitable suggests that the paradigm itself is the problem and calls into question our fundamental canons about charity. Author Dan Pallotta argues that society's nonprofit ethic acts as a strict regulatory mechanism on the natural economic law. It creates an economic apartheid that denies the nonprofit sector critical tools and permissions that the for-profit sector is allowed to use without restraint (e.g., no risk-reward incentives, no profit, counterproductive limits on compensation, and moral objections to the use of donated dollars for anything other than program expenditures).

These double-standards place the nonprofit sector at extreme disadvantage to the for profit sector on every level. While the for profit sector is permitted to use all the tools of capitalism to advance the sale of consumer goods, the nonprofit sector is prohibited from using any of them to fight hunger or disease. Capitalism is blamed for creating the inequities in our society, but charity is prohibited from using the tools of capitalism to rectify them.

Ironically, this is all done in the name of charity, but it is a charity whose principal benefit flows to the for-profit sector and one that denies the nonprofit sector the tools and incentives that have built virtually everything of value in society. The very ethic we have cherished as the hallmark of our compassion is in fact what undermines it.

This irrational system, Pallotta explains, has its roots in 400-year-old Puritan ethics that banished self-interest from the realm of charity. The ideology is policed today by watchdog agencies and the use of "efficiency" measures, which Pallotta argues are flawed, unjust, and should be abandoned. By declaring our independence from these obsolete ideas, Pallotta theorizes, we can dramatically accelerate progress on the most urgent social issues of our time. Pallotta has written an important, provocative, timely, and accessible book--a manifesto about equal economic rights for charity. Its greatest contribution may be to awaken society to the fact that they were so unequal in the first place.

Editorial Reviews

From Booklist

Pallotta TeamWorks was the for-profit brainchild behind several campaigns to raise funds for breast cancer and AIDS research and awareness, creating several nationwide, marathonlike events that raised millions. But its founder came under attack for violating the sacred premises of charitable organizations: low profile, low budget, and little or no profit. Pallotta turns on its head the assumption that charity and capitalism should be forever divided. Don’t charitable causes deserve the same kind of competitive forces that work to get results in the for-profit sector? Wouldn’t social causes be better served if charitable organizations were headed by the kind of bright, aggressive executives that work in the for-profit sector? Pallotta traces the history of nonprofit organizations to Puritan notions of charity and self-denial. He also offers a detailed case study of TeamWorks and other trends in the nonprofit sector that only tweak around the edges of a system that is sorely in need of change if it is to deliver on its mission to improve social inequities or cure diseases. A passionate, thought-provoking look at the nonprofit sector. --Vanessa Bush

Review

"Philanthropists and charity execs should read [Uncharitable] to ponder, if judiciously, its lessons."--Boston Globe

"Pallotta turns on its head the assumption that charity and capitalism should be forever divided. Don't charitable causes deserve the same kind of competitive forces that work to get results in the for-profit sector? Wouldn't social causes be better served if charitable organizations were headed by the kind of bright, aggressive executives that work in the for-profit sector? Pallotta traces the history of nonprofit organizations to Puritan notions of charity and self-denial. He also offers a detailed case study of TeamWorks and other trends in the nonprofit sector that only tweak around the edges of a system that is sorely in need of change if it is to deliver on its mission to improve social inequities or cure diseases. A passionate, thought-provoking look at the nonprofit sector."--Booklist

"This tome is big-time out-of-the-box thinking that will cause ripples. Yet if you care about charity, it is a must read. While I don't want to lose the volunteer passion and compassion in charitable work, it's high time we confront the fact that, for the most part, this is no longer a bake sale."--In Los Angeles Magazine

"Mr Pallotta produces quite a lot of both data and logic. If you do not first analyse a fund-raiser's results, how is it possible to judge whether what it spent was justified? He also makes a convincing case for charities to spend far more on advertising, perhaps even selling shares to pay for it. If this makes you queasy, read Mr Pallotta's book. As he says, "To mount a campaign to convert 6 billion people to love--which is essentially the role of charity--takes a lot of money...Raise the capital to promote the idea by offering a return on investment, hire the best people to manage the effort, and run the advertising to spread the word. You beat capitalism at its own game."--The Economist

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Product Details

• Hardcover: 336 pages
• Publisher: Tufts (December 1, 2008)
• Language: English
• ISBN-10: 1584657235
• ISBN-13: 978-1584657231
• Product Dimensions: 9 x 6.1 x 1.3 inches
• Shipping Weight: 1.3 pounds (View shipping rates and policies)
• Average Customer Review: 4.1 out of 5 stars  See all reviews (22 customer reviews)
• Amazon Best Sellers Rank: #123,942 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

14 of 17 people found the following review helpful:

5.0 out of 5 stars Uncharitable- A push in the right direction, November 19, 2008

By 

Trista Harris "Executive Director, Headwaters... (Minneapolis, MN) - See all my reviews
(REAL NAME)   

This review is from: Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) (Hardcover)

I read Uncharitable and I LOVED IT! I am a big believer in the potential of the nonprofit sector and I also believe that there are many structural issues that impact how effective nonprofits can be at achieving their missions. Dan's premise is that human beings are innately charitable and that we have a desire to help our fellow man. Our current system of charity is the bureaucracy that we set up to fulfill that need to help one another. This system has remained unexamined because doing "good" is good enough. In this book Dan asks some key questions: Does this system work? Is it the best system we could have? What other systems are available? His vision is to set free charities and all of the people that work for them from a set of rules that were designed for another age and another purpose and begin to use the rules of free-market capitalism to supercharge the sector. Before you get all high and mighty and say that the free-market system is collapsing around us everyday and that opening up the nonprofit system to its corruption and volatility wold ruin the purity of the sector, I'd like to remind you that the sector is already influenced by the corruption of the for profit sector, as evidenced by many high profile scandals and the volatility for the free-market is what is shrinking my foundation's endowment. The nonprofit system has all of the pitfalls of a free-market system with none of the benefits (e.g tolerance for risk, investment in research and development, and competitive pay). This book is destined to start some great conversations, which are very overdue.

Trista Harris
[...]

22 of 29 people found the following review helpful:

5.0 out of 5 stars A Passionate, Well-Argued, Fascinating Analysis of the World of Charity, December 14, 2008

By 

Michael Strong "Flow Idealism" (Austin, TX) - See all my reviews
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This review is from: Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) (Hardcover)

Because I read a lot of books and articles on charity and philanthropy, I assumed this would be yet one more dull, earnest, attempt to improve the world of charitable giving, blah, blah, blah.

To my great surprise, upon reading it I find instead of earnest well-intentioned gobbeldy-gook - BOOM!!!! Gay AIDS activist meets Ayn Rand, with all the moral passion and intelligence of both. Dan is someone who has seen countless friends die and committed his life to helping to find a cure for AIDS, raising over half a billion in charitable contributions in nine years, only to discover that the philosophical constraints on non-profits and conventional attitudes towards charity and philanthropy shackled his efforts and prevented him from doing more. And then instead of simply walking away bitterly after these forces destroy his organization in 2002, he sublimates his passion into a brilliant analysis of how our existing paradigm of charitable giving and non-profit structure is itself the problem.

Dan had built a highly successful for-profit company that organized three day walks for breast cancer and multi-day bicycle riding events that were focused on fund-raising. His company raised more than half a billion dollars and netted more than $300 million dollars in unrestricted funds for AIDS and breast-cancer charities, as Dan says, "more money, raised more quickly, for these causes than any private event operation had raised in history." After his company collapsed, in part because of a breach of contract by the Avon Products Foundation after the controversies associated with his for-profit business model came to the fore, subsequent non-profit events based on the same model raised only a fraction of the amount his company had been raising. For instance, in 2002 Pallotta Teamworks raised $142.6 million for the breast cancer cause. The very next year, when Avon decided to try producing similar events on their own (in violation of their contract with his company), their events raised only $28.5 million and after four years they had only brought that up to $48.7 million - and yet Pallotta Teamworks had been criticized for operating as a for-profit; not focusing enough on the cause! Somehow it was more legitimate for a for-profit corporation's nonprofit arm - Avon - to raise less money for the cause simply because of our collective bigotries against capitalism.

Palotta's book brilliantly integrates personal anecdote as a social entrepreneur, data-driven analysis of the weaknesses of the non-profit model, and deep insights into the fundamental guilt psychology of our existing models of charity. Give "Uncharitable" to someone for Christmas this year, a highly original gift that keeps on giving.

21 of 30 people found the following review helpful:

1.0 out of 5 stars Narrow focus, fails to address real ideas and issues, January 8, 2009

By 

Ken Ristine (Tacoma, WA USA) - See all my reviews
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This review is from: Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) (Hardcover)

What is new in Dan Pallotta's book is not really important, and what is important, isn't really new. Mr. Pallotta's main reason for writing the book is to expose what he feels were unfair critiques of his commercial fund raising company. His rendition of his company's experience provides the only real new information in the book. But that is a narrow focus, and has little value for most volunteers, staffs, and suppoters of charitable causes.

The important issues he covers include questions such as can nonprofits take risks and does a fixation on "overhead" costs prevent the nonprofits from rewarding talent? But he offers little to the discussion because he fails to distinguish between his experience, running a commercial fund raising company, and an actual charity.

I agree with the sentiment he uses as a chapter heading: Let's stop asking this question. His arguement is that when we focus on asking charities how much goes to program versus overhead we fail to look at other important indicators. Low overhead does not mean the organization provides good services.

But that applies to asking the question of charities. The question is still appropriate, even mandatory, to ask of a commercial fund raising firm.

Another example is his observation about charities being afraid to take risks. But does he follow this up with a discussion of charity taking a hard look at how it provides services or bravely underwritting the costs of bringing services to an underserved community? No; his example is the "risk" his organization took in trying innovative fund raising events. Yet a full reading seems to indicate that the cost of the risk really fell to the charitable recipient of the event proceeds. Mr. Pallotta's example of a risk that failed is when an event yielded only 20% to 30% to the charity because it failed to gain enough participants. I may be jumping to conclusions, but my reading seems to indicate that Dan Pallotta and his firm still met their costs.

The best part of the book is the case study of Mr. Pallotta's firm which is included. It sheds some light both on the positive and negative aspects of the large scale events that his firm produced.