The Case for Charity

One of the first questions I ask when I think about donating to a particular charity is what their overhead is – that is, how much money the spend on personnel and marketing and everything else it takes to administer their relief efforts. This kind of information is readily available and I use it to determine a sense of the charity’s efficiency – the lower the overhead, the more money goes directly to the recipients of the aid I and others give. Of course I assume the reverse is true as well: the higher the overhead the more wasteful the charity is and less deserving of my support.

In this provocative TED Talk based on his book Charity Case: How the Nonprofit Community Can Stand Up For Itself and Really Change the World, not-for-profit innovator and entrepreneur Dan Pallotta suggests this is an inadequate measure of a charity’s effectiveness. Other standards – the actual impact of the organization, the worthiness of their goal, the research and innovation they bring to bear to solve a large problem – are other elements that we should consider. As Pallotta says, “The next time you’re looking at a charity, don’t ask about the rate of their overhead. Ask about the scale of their dreams.”

Take a look at this Talk when you have a chance and browse through some of the comments, as the discussion Dan is engendering is both interesting and important.

Note: If you are receiving this post by email, you may need to click here to watch the video.