Dan Pallota: The way we think about charity is dead wrong.

"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.

Grammar? We don't need no stinking grammar!

Here’s a direct mail pro-tip: once you’ve finished writing the Greatest Fundraising Letter Ever, read it aloud to yourself.

Does it sound choppy?  Are your sentences short?  Are you starting sentences with conjunctions, repeating yourself, breaking sentences between pages, and leaving all those annoying commas out of the mix?

No?

I hate to break it to you, but if that’s the case, you might want to toss that first draft in the circular file and start again.

Read More

Financial Restrictions and "The Overhead Myth"

Did you know that 75% of all U.S. foundation grant making is restricted?

This is because many wealthy donors restrict their contributions from being used to cover "indirect costs," preferring that their gift is put directly toward the funding of a project.

The "indirect costs" of a non-profit organization can include anything from paying salaries to training staff to maintenancing buildings and equipment.  These are the overhead costs that come with operating any organization.

Read More