"Philanthropy is the market for love."
Dan Pallota, founder and President of the Charity Defense Council and author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, has spent his career going to bat for the nonprofit sector.
In his 2013 TED Talk -- one of the 100 most viewed TED Talks of all time -- Pallota attacks the all-too-common idea that for nonprofits, success and trustworthiness can only be measured by the money an organization doesn't spend.
This belief, lovingly called "the Overhead Myth" by those of us involved with nonprofit fundraising, has long been a ball and chain around the ankle of every small charity. It's the belief that an organization must go to extraordinary lengths to reduce organizational costs and spending so that the highest percentage possible of every dime donated ends up in the pockets of benefactors.
The problem? Charities are already limiting overhead expenses as much as they can -- in some cases, to the detriment of fundraising efforts and operational efficiency -- and many potential donors still say it's not enough.
And that's when these donors take their money elsewhere.
But without employees, without a facility to operate out of, without transportation, and without funding to produce educational materials and promote projects, there is no charity. And when nonprofits are compelled to cut funding from these areas, the services and outreach provided by these charities suffer.
The old adage goes, "you gotta spend money to make money," and most people would probably agree -- when it comes to business. But when it comes to nonprofits? Many people still take a frugality = morality stance. And it's hurting charities -- and more importantly, the people they serve.
This TED Talk has been viewed more than 8 MILLION times. And with good reason! Take a look.