We were inspired by this TED Talk from activist and fundraiser Dan Pallotta who said, quite articulately,

“How we think about charitable progress is dead wrong—and it’s impacting our ability to make real change in this world.”

He says, as a society, we measure the achievements of a nonprofit by its ability to keep overhead low. He points to four paradigm-shifting ways of thinking as the culprits behind why nonprofits continue to face challenges in advancing their missions and visions.  

Four insights that will change your thinking about nonprofits:

1. Compensation

Dan notes a double-standard in how we think about compensating non-profit employees. He points out that society doesn’t scoff at for-profit employees who make lots of money, but don’t actually help those in-need. Whereas, if an individual in the nonprofit sector makes lots of money to help those in-need, we start to question their character—why?

If we keep thinking that incentivizing people to produce more in social service is bad, we are, by the nature of our thinking, putting restraints on their ability to do good in this world. And at the end of the day, is it really “bad” if people in the nonprofit sector are making a decent living, if they are, in fact, moving the needle and solving social problems? We don’t think so.  

2. Advertising and marketing

Dan notes that donors want their contributions to go directly to the needy. This thinking is problematic because if nonprofits are restricted to only using donations toward service-based initiatives, all the while, they don’t have the resources to advertise and market the good things they’re doing, it eventually debilitates them. Like we’ve said before, people can’t support organizations if they don’t know they exist and aren’t motivated by the impact they make. Our last blog on how PR and fundraising work together dives into this further. Dan poignantly asks “…if we tell charities, ‘You cannot advertise all the good that you do,’ where do we think the consumer dollars are going to flow?” We need to change our thinking that fundraising and PR and mutually exclusive—because they’re not. They need each other in order to elevate nonprofit brands, mission and work.

3. Taking risks

Nonprofits are reluctant to attempt new fundraising efforts because of fear of failure. It impacts their reputation and, as a result, “kills innovation” Dan notes. And it’s a vicious cycle: “If you kill innovation in fundraising, you can’t raise more revenue; if you can’t raise more revenue, you can’t grow; and if you can’t grow, you can’t possibly solve large social problems.

It is in our best interest as marketers to encourage nonprofits to “go big” and not self-limit based on “what could happen if we fail?” We need to shift our thinking toward the positive: “What could happen if we win?”

That’s not to say we should be reckless in our spending though. We believe PR and marketing is, and should be, viewed as an investment (which, by definition, is “an asset or item that is purchased with the hope that it will generate income or will appreciate in the future.) However, none of us have crystal balls and we can’t predict the future, but what we can control is how we strategically invest our time, money and energy into moving the needle forward for our clients, donors and those in-need. If we are in fact making progress and change, taking a risk doesn’t seem that daunting anymore. But we won’t know until we try!

4. Time & Profit

The last two ways of thinking revolve around time and profit. For-profit businesses have taken a long time to build their market dominance but nonprofit sectors don’t have the luxury. But they should! Building scale, like building a reputation, takes time and it’s not a light switch you can turn on and off. Donors and funders need to understand that building momentum and changing the way people think about an issue or cause takes time.

Similarly, Dan encourages us to change how we think about paying people to generate impact. He says “for-profit sector can pay people profits in order to attract their capital for their new ideas,” but also points out the larger societal belief that “[we] can’t pay profits in a non profit sector, [therefore] the for-profit sector has a lock on the multi-trillion-dollar capital markets, and the nonprofit sector is starved for growth and risk and idea capital.” Bottomline: If we pay profits in the nonprofit sector as we do in the for-profit sector, they can actually start attracting capital for new ideas that can change the world. Instead of starving for growth, they’re thriving because they have the capital needed to generate big ideas and they’re taking risks that make social change happen.

He sums it up our problematic thinking: “You [nonprofits] can’t use money to lure talent away from the for-profit sector; you can’t advertise on anywhere near the scale the for-profit sector does for new customers; you can’t take the kinds of risks in pursuit of those customers that the for-profit sector takes; you don’t have the same amount of time to find them as the for-profit sector; and you don’t have a stock market with which to fund any of this, even if you could do it in the first place…

we’re dealing with social problems that are massive in scale, and our organizations can’t generate any scale.

But there is hope and it starts by addressing how we think about the five concepts above. It’s safe to say a goal of any nonprofit is to make change. If we agree that nonprofits lack the resources to fully realize their impact capacity, then let’s give them some leeway to make the necessary investments to do so. Because if $1 spent on marketing could generate $2 to go toward the mission, wouldn’t that be better than if that $1 went toward the mission in the first place?

We donate to causes that mean something to us because we want to see the world in a better place. If our donations go toward a marketing campaign that raises awareness of an issue, establishes a share of voice in the community that wasn’t previously there and shows actual financial impact, then, we’d say, that’s a pretty damn good investment. Bottom line, nonprofits can’t realize their full potential to make change if we don’t give them the voice and platform to be heard in the first place.