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Charity Case: How the Nonprofit Community Can Stand Up For Itself and Really Change the World Hardcover – September 4, 2012
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Q & A with Dan Pallotta, Author of Charity CaseWhat prompted you to write this book?
We all want to alleviate human suffering--to reduce poverty, to feed the hungry, to cure diseases. Around the world, people donate tens of billions of dollars to charity every year toward that end. In our heart of hearts, we want to change the world. But if we look at the big social problems, the needles aren't moving very much--not at nearly the pace we had hoped. In the U.S., for the past forty years poverty has remained constant at twelve percent of the population. AIDS deaths have increased from 1.1 million a year twenty years ago to 1.8 million today. Breast cancer deaths in the U.S. have only gone down by about eight percent in twenty years.
In my last book, Uncharitable, I explored why we haven't been able to make progress on these social challenges. I argued that our social problems are much larger than our nonprofits--and that our nonprofits are unable to grow to meet their scale because we force charities to operate under a set of rules that prevents them from doing so. We don't let charities pay to lure the best talent away from for-profit sectors. We don't want charities to spend money on advertising. We don't want charities to take any of the risks they need to take in order to succeed. We deny charities the freedoms we give businesses to allow them to prosper.
Since the publication of Uncharitable, I have given 150 speeches on this subject in twenty-nine states and seven countries. After each speech, attendees are hungry to know what we can do about this situation--how we can give charities the freedom they need to really grow and actually solve our social problems. So I decided to write a book about it. Charity Case is the result.What is the most important thing that needs to change for charities to have the freedom they really need to grow?
We need to change the way the public thinks about charity. Individuals give seventy-five percent of the $300 billion donated to nonprofit organizations each year. They influence public policy. The media gives the public what they think the public wants. So changing the way the public thinks about charities is key to changing the rules that undermine their ability to actually solve social problems.What's wrong with the way the public thinks about charity and giving?
Pretty much everything. The public wants charities to spend as little as possible on overhead. The public doesn't like to see charities paying high executive salaries. The public wants every gala dinner and walk-a-thon to send one hundred percent of the money donated back to the cause. What the public doesn't realize is that low overhead is not a path to the end of world hunger or a cure for cancer. It's the opposite. Only allowing charities access to the lowest-cost talent is not a strategic plan for alleviating human suffering. Demanding home runs on every charitable fundraising endeavor discourages innovation and keeps charities small and in fear. The very things the public has been taught are good and ethical--low overhead, low executive pay, funneling all donations to the cause--are practices that are killing us.
The public doesn't know this is wrong because the nonprofit sector, government regulators, and the media keep telling them that these are the things that matter. Thus we are trapped in a vicious cycle with the public: we keep telling people what they want to hear about how their charitable donations should be used, and they keep parroting that back to us. But it's not true, and we need to take the first step within the nonprofit sector to make that known.How do you change the way the public thinks about charities?
By talking to them methodically, often, and consistently. By helping the public understand that what they really want is not low overhead. What they really want is to solve social problems. My experience has been that the public has tremendous common sense. Once you tell them that low overhead is not how you solve social problems, they want to know how you do solve social problems, and they want you to start doing the things that will do that. It's just that no one has ever given them the full story.How do you start this conversation on a national level?
By creating a national leadership organization for precisely that purpose. Right now the nonprofit sector lacks such an organization so several of us in the sector have created one: the Charity Defense Council. The Charity Defense Council will focus on five strategies to fundamentally change the way the public thinks about charity:
- Serve as an anti-defamation league to correct inaccurate and sensational stories in the media that continue to contaminate public thinking with the wrong ideas about the nonprofit sector.
- Conduct major advertising campaigns to begin a conversation with the public about the work it does and how it needs to do it to be effective. In the same way that the pork industry changed the image of pork from a fatty heart-attack-waiting-to-happen meat into a healthy alternative to chicken by advertising it as "the other white meat," we can change the way people think about charity with strong and consistent advertising campaigns.
- Serve as a legal defense fund to protect the sector's first amendment rights by challenging unconstitutional laws, regulations and proposals that violate those rights. Freedom of speech is as much about having the right not to say things you don't want to say as it is about having the freedom to say what you wish. All too often, government regulations force charities to speak in the language of overhead percentages instead of in plain English and consequently the general public thinks that overhead is the most important question they can ask. These regulations de facto censor charities' ability to talk about things like impact on official reporting forms.
- Organize the nonprofit sector and those who lead, work, and volunteer in it to act and speak on their own behalf. Similar to the way the gay-lesbian civil rights movement advanced so quickly by individuals coming out, we need individuals in the nonprofit sector to come out and tell people that "I kept the overhead low" is not what they want engraved on their tombstones.
- Help to enact a National Civil Rights Act for Charity and Social Enterprise which will not only serve to improve the statutory environment in which the sector works, but, by its very enactment, will serve to change the way the public thinks about charities and giving.
My goal with the publication of Charity Case and the organization of the Charity Defense Council is to fundamentally transform the way the public thinks about charity within ten years. How will we know if we have achieved this? A study from NYU revealed that in 2008 seventy percent of the general public believed that charities waste either "a great deal" or "a fair amount of money." We will know we have succeeded when seventy percent of the public believes the opposite.
“Charity Case is an Apollo program for American philanthropy and the nonprofit sector. Pallotta’s understanding of the hamstrung nonprofit sector is poetic and therapeutic. His prescription is sensible and profound. Charity Case will inspire its readers with an expansive sense of possibility.”
— Robert F. Kennedy Jr.
“Every once in a while a book states the obvious in such a compelling way that it rises to the level of genius. Charity Case is that exciting. It dares the whole of the charitable industry to raise its voice to the level of the music business and other consumer giants. In its insistence that the industry reject the role of second-class citizen, it has the potential to make charity sexy, and that’s the only way charity’s ever going to change the world.”
—Clive Davis, chief creative officer, Sony Music; founder, Arista Records; former president, Columbia Records
“If we had a prize for the most innovative thinking about charity and social change it would go to Dan Pallotta. Charity Case is the blueprint for unleashing the awesome power of this sector and enlightening the society that unknowingly holds it back. Simply brilliant and in a class by itself.”
—Peter Diamandis, chairman and CEO, X PRIZE Foundation
“Dan Pallotta invites, tempts, and provokes every single one of us to think differently about the humanitarian sector. He has a big vision and artfully makes a case for creating a sector-wide movement capable of powerful actions and needle-moving change that improve lives. In this rapidly changing and increasingly complex world, Dan’s voice is crisp, clear, and compelling.”
—Diana Aviv, president and CEO, Independent Sector
“Dan Pallotta is a big thinker—impatient, generous, and insightful. It’s worth hearing him out.”
—Seth Godin, author, Tribes
“The nonprofit world needs innovation, and Dan Pallotta is helping us see how new ideas can help make our world more successful. In these tough times, we need his out-of-the-box ideas!”
—Bobby Shriver, cofounder, Product (RED)
“Charity Case is visionary in its empathy. It sympathizes with the donating public’s confusion about how charity really works and with the nonprofit sector’s plea to be held to standards that engender trust and grow support. At that intersection lies the promise of a new era of enlightenment about charity and social change.”
—Art Taylor, president, Better Business Bureau Wise Giving Alliance
“Charity Case takes innovative thinking about the social sector to an entirely new level. Dan Pallotta raises the radical prospect that we can change cultural conventions about charity, making a cause of causes themselves. A powerful call to action.”
—Jane Wei-Skillern, adjunct associate professor, Haas School, University of California, Berkeley; lecturer, Stanford Graduate School of Business
“It doesn’t occur to Dan Pallotta that standing on the sidelines is an option. And he makes it impossible for the rest of us to stand back. Charity Case is a wakeup call for every fundraiser around the world. We are the public champions of philanthropy—it’s just that not all of us have been aware of that until now.”
—Andrew Watt, president and CEO, Association of Fundraising Professionals
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Also, by encouraging non-profits to really think about what issues to focus on, what unmet needs are the highest priority, the author contributes to helping these organizations free themselves from continually going after funding for whatever issues are in vogue with grantors.
On the negative side:
1. This book really needed to be edited to remove or drastically eliminate a lot of the "hit the reader on the head with a 2 by 4" repetition about bad things that have happened to non-profit leaders.
2. The author clearly hasn't gotten over the unexpected closure of his highly lucrative fundraising event company - it was like reading transcripts of therapy sessions in a number of sections of the book. Which is so not relevant to the theme of the book.
3. His analogy of fighting for the humanitarian sector with the battles to cure Breast Cancer or HIV is flawed. One issue is a matter of impression management, the others are life or death.
4. The best measures of the author's need to depersonalize and broaden his message can be seen in the incomplete website for the Charity Defense Fund and the only triple digits likes and traffic on Facebook.
One thing is for sure. The current system is dysfunctional, and probably the most damaging is the belief that "overhead" is an appropriate measure of nonprofit efficiency and, by extension, competence. That's absurd. Alas, Pallota may be so far ahead of his time as to be considered an outlier (ala Malcolm Gladwell). Anyone who works on the frontiers gets beat up as a matter of course. It goes with the territory. But one day, the rest of the world will catch up to him. I think some already are, judging by subtle changes in the industry literature (e..g, The Chronicle of Philanthropy which I consider to be my sector's equivalent of The New York Times).
I've been reading a lot of recent literature in the field criticizing compensation of high-level workers like executive directors, directors of development etc., which is as dysfunctional as the belief that "overhead" can tell you about efficiency. As the old saying goes, "You get what you pay for." And why shouldn't nonprofit leaders be adequately compensated when they do great things for their organizations. The very idea that if you work for a nonprofit, you can't make a decent salary, is absurd and pathetic. It is exceedingly disrespectful and should not be tolerated.
People need to get over the idea that nonprofit workers are in it for the passion and mission rather than making a decent wage that allows them to support their families, afford to send their kids to college, and be able to make enough to save for their own retirement. The public's, and politician's beliefs that passion for a mission and a decent wage are somehow mutually exclusive is totally unrealistic and extremely insulting. They are like ostriches sticking their heads in the sand. It's nuts, and counterproductive to say the least.
Remember folks, we account for over 10% of Gross Domestic Product nowadays, and nonprofits generate billions for their local and regional economies as well as nationally. So give us some respect.
Sara C. Weiss
I really appreciated the ending chapters where Dan lays out some ides, but not just his own ideas. Dan brings int he ideas of powerful, thoughtful, corporate thinkers who want to help see non-profit and for-profit invest in charity work without all the restrictions that our government puts on corporations? This chapter was especially enlightening.
If the book had avoided Dan's pet "soap-box" and also included more of the tax deductible issues faced by the faith-based/religious groups it would have been a 5 star book. The book is a superb floor plan on which to build. I really saw some great ratios, stats on the lack of power in social media, and the power of a collective for charity work (as we have seen for Milk, Pork, and Eggs). Let's work together to get misunderstanding off our backs in the Development field....Dan has carved a path we need to know rad, analyze, and consider TOGETHER.