Of all of the books that I read during this summer ‘break’, Uncharitable was the most troubling and the most likely to continually reverberate through my professional life. I know that people are busy and so I seldom say this, but, if you run a nonprofit or raise money for a nonprofit or evaluate a nonprofit, you really should read this book.
That does NOT mean that I agree with everything that Dan Pallotta asserts in the book. I started out, in fact, pretty aghast at some of his assertions. And he remains WAY more enamored of free-market capitalism, and way more convinced of its potential for good, than I will ever be (he claims that the persistence of social problems is evidence of nonprofits’ failure, where I would look more to the systemic causes, some of which are perpetuated by the same corporate structure he seeks to emulate). But he’s honest about that, and seemingly honest about just about everything, and I respect that. And, truly, he has some very, very important (and unorthodox) things to say about the way that we do business in the nonprofit sector.
And I guess that’s the first point: it is a business. And we have to acknowledge that and figure out what that means for the work that social workers do, within these nonprofit organizations, that many of us consider much more like a calling than a career.
Here are his main points (you can see where the controversy comes up immediately):
I started off with him 100% on the second and somewhat skeptical on the first. Now, I can’t stop thinking about several of the points that he made, and I’ve been doing some more research (see below) on what this might look like in practice. Some of the best stuff in here:
It’s true that we don’t really have a great way of defining ‘success’ or even true ‘efficiency’, especially across the entire sector, but I agree totall with Pallotta that those difficulties do not excuse our failure to really ask the right questions. This means acknowledging that it takes more money to raise money for nonprofits that deal with unpopular causes (e.g. homelessness compared to breast cancer) and that small, grassroots nonprofits are sometimes not the cheapest ways to run things (even if they are the most democratic). It means recognizing that spending money on advertising is also about raising awareness of social problems and building ‘consumer demand’ for their solutions, which, ultimately, is the only way that we revolutionize our society. It means being honest about the fact that there’s a lot that we don’t know about what makes a nonprofit organization successful in its fight against its particular social demons, and it means investing the collective intelligence in trying to articulate those questions and seek at least some answers.
After reading the book, I found this article on L3Cs (low-profit, limited liability corporations), a new corporate structure allowed in Illinois and (with a few variations) a few other states. In many ways, this seems to shore up some of Uncharitable’s theses; one of the main purposes of the L3C is to allow organizations to receive investment capital for their work, which then serves as seed money, basically, for fundraising and marketing and other work before being repaid, with interest, to the investors who sought to both make good returns financially and morally. And here’s some commentary about what options already exist, within the current 501(c)3 structure, to do some of the same things. Check them out, and I’d love to know what you think.
And, perhaps directly influenced by these ideas, Charity Navigator (one of the major NPO ‘watchdog’ groups) is going to start rating nonprofits based on their success in achieving outcomes, not just the percentage of donations that go to the ’cause’. And the Rockefeller Foundation is supporting the development of a Global Impact Investing group to collect and disseminate outcomes information on both nonprofits and social businesses. The latter initiative is aimed at investors looking to make a profit; the former at those making charitable contributions. VERY exciting!
OK, so I know that this is SUPER long, but that’s how much this book impacted me. I’m thinking a lot about what this all means for social work, for the future of nonprofit organizations (I’m looking for alternative labels, now, for our ‘sector’), and for how we harness the power of human enthusiasm and moral outrage to confront our common enemies. What do you think? How does this challenge how you have learned to think about yourself, your organization, your work? What scares you, angers you, or excites you about these ideas? And why do you think you have that response?