During a meeting, a consultant tells you he can help plan a fundraising event that will triple the amount of net revenue that you have typically generated in the past. Here’s the catch: The fundraising costs may reach 50% of total revenues, a percentage that you think is too high.
On the one hand, the additional funds would help you scale your operations and have a greater impact. You donors, however, may be more concerned about the costs for the event than the increase in net revenue.
Dan Pallotta’s examines this dilemma in his new book, Uncharitable: How Restraints on Nonprofits Undermine Their Potential. He argues that the nonprofit mindset can sometimes be counterproductive, discouraging organizations from taking advantage of tools of capitalism. While spending more funds to advertise, hire the best staff, or building capacity will increase overhead costs, Pallota maintains that organizations will benefit in the long run.
To help readers understand the need for a paradigm shift in the sector, Pallotta traces the origins of society’s nonprofit ethic, explains some of the challenges that result from it, and discusses the limits of common nonprofit efficiency measures. He includes a case study of his company to illustrate his key points.
Uncharitable is published by Tufts University Press, 2008.
A preview is available on Google Books