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Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives) Paperback – July 13, 2010
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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 --This text refers to an out of print or unavailable edition of this title.
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Perhaps the number one shortcoming in this book is the order in which his arguments are presented. By starting off with the argument that nonprofit CEOs do not make enough money (only up to a measly $400,000 or so a year!), the author loses some credibility from the very beginning. At one point, the author argues that CEOs have diminished abilities from their pay being so much lower than CEOs of for-profit firms, due to the fact that they cannot afford to join the same country clubs, yachting clubs, attend the same $50,000 a seat galas, etc., as their for-profit competitors. By not being able to run in the same obscenely wealthy social circles, they're not able to lobby for the same kinds of funds they could if they were accepted into that crowd. That's a tough sell. The author repeatedly mentions his Ivy League education and the fact that he could have made dozens of millions of dollars a year in the private sector instead of martyring himself to the nonprofit cause for only about half a million dollars a year. It makes the argument sound a little whiny with an edge of bitterness, and may seem very distasteful to anyone who identifies as lower or middle class. Interspersed throughout this argument are claims that the capitalist system is faultless and should be unrestrained for maximum benefit. In the wake of the Great Recession, it makes the argument sound weak. The several Ayn Rand quotes peppered throughout ensure that he has irritated everyone left of center by the first few pages of chapter two.
The second weak point is his oversimplification of the history of nonprofits and charity in the United States. He overemphasizes the stern values of the Puritans and completely disregards the enormous impact of Catholicism, Judaism, and other non-Puritan forms of Protestantism - not to mention the history of non-religious charity and nonprofit work revolving around different immigrant groups or people with shared values. He also completely disregards the often scandalous nature of nonprofits in pre-WWII America, and how they were at one point generally believed to be a hiding place for wealth. In doing so, he completely ignores the reasons why nonprofits were ever regulated. His omission of other, less self-punishing religious traditions also ignores the "love thy neighbor" theme that led to the lower pay and lower resource use common in charity.
These two rather large mistakes are regrettable, as the rest of his argument is rather sound. Nonprofits should be able to allot more money to advertising, if they feel it would bring in much-needed resources. Nonprofits should be able to take risks and invest in their infrastructure, considering they are competing for the same disposable consumer income as big brands like Apple or Sony. Perhaps most importantly, skewed watchdog group standards deemphasize the effectiveness of charities in favor of an oversimplified "overhead" percentage that false, underregulated reporting could wildly distort. He provides good evidence for this incorrect data reporting, citing the wildly varying "overhead" reports from similar charities over the same years. His argument could be furthered (ironically, considering his disdain for regulation and oversight) by advocating for the implementation of some sort of federal oversight for compiling reliable data on the work of charity agencies and streamlining what kinds of figures they report. However, as useful as these suggestions by the author are, many readers may have given up on the book after his first two mangled points.