The way that we think of charity is dead wrong.
So said Dan Pallotta at the recent +IMPACT East, Causecast’s second breakthrough conference addressing social innovation and overlooked paths toward impact. Pallotta’s powerful discussion perfectly framed the theme and takeaways of +IMPACT East, which was packed with entrepreneurs and big thinkers around the convergence of business, technology, the arts and giving back.
According to Pallotta, a massive rethinking around charity is needed if the nonprofit sector is ever going to come close to achieving its potential to solve the most entrenched challenges we as humans face. Why, he asked the +IMPACT audience, have massive problems as diverse as homelessness and poverty and breast cancer remained stuck in neutral? Year after year, why are we not moving the needle on issues that we proclaim to care so much about? Why has the charity sector has remained at 2% of our GDP for decades, unable to wrest any market share from the for profit sector?
Here’s why: the things that we have been taught to think about charity are actually undermining the causes we care most about. “We have two rulebooks,” Pallotta said. “One for the nonprofit sector and one for the for-profit sector. It’s like apartheid.” The result is a brain drain of talent and financial opportunity that ensures that the nonprofit sector stays small and powerless.
For-profits are not supposed to dedicate resources to the very things that create scale. That means low wages - which guarantees you can’t attract the best and the brightest; minimal money on critical things like marketing, advertising and fundraising; and a lack of patience and aversion to risk and failure, which kills the very spirit of innovation needed to solve large-scale social problems. The term “overhead” has become demonized, Pallotta argued, even though overhead is what you need for growth. We have confused morality with frugality, forcing nonprofits to lower their horizons and squashing the potential for real change.
Pallotta’s fresh perspective is the kind of cutting-edge thought that characterized all of the discussions at +IMPACT. “This isn’t your mama’s CSR conference,” we like to say, and I think that most of our attendees would agree. Few events of this sort kick everything off with an artistic giant like Carla Perlo, Founder of Washington D.C.’s revered Dance Place, leading attendees through a dance that embodies their spirit of volunteering and giving.
+IMPACT East brought together experts in different fields around giving back in a warm and open environment and provided an inspirational opportunity for them to find their tribe. Leaders at innovative companies ranging from Deloitte and Marsh to New Wave Foundation and Boardsource talked about how they’re paving the next wave of social impact. How do you build a vision of a responsible future? How do you balance pro bono supply and demand? What are some of the most essential best practices that the nonprofit community must engage in to ensure its success? All of these issues were fodder for fascinating discussions amongst the changemakers at +IMPACT East.
We who toil in the trenches of social impact sometimes lose our way. The challenges surrounding philanthropy - in all of its forms - are immense, as Pallotta spelled out clearly. An event like +IMPACT East provides a booster shot of adrenaline to up your game, connect the dots and walk away supercharged with new ideas and energy to break through stasis. Understanding the bleeding edge trends around giving back - such as data analytics and AI, connecting through content, and cross-sector global partnerships - is an essential part of being armed for success in this field.
And one of the things we agreed on at +IMPACT East is that success means seizing the opportunity to think bigger than we are doing now. How can companies think differently about causes and nonprofits so they can, for example, tackle large-scale global issues like the Zika virus head-on? How can business leaders do their very best to lead movements for change and show stakeholders how this strategy advances their concerns around the bottom line and other issues such as diversity and inclusion.
“Let’s revise and reinvent the whole way humanity thinks about changing things,” Pallotta encouraged us. Stop thinking small, about things like percent of overhead, and instead think about how to make the pie bigger so that the resources expand and there is a potential for real change. “‘We kept charity overhead low should not be our epitaph,’” he said. “It should be that we changed the world.”
So to answer the question I posed upfront: charity isn’t dead as a sector, but the old way of thinking about charity must die if the field is to have any meaningful future.
+IMPACT East invited all of us to expand the scale of our dreams and understand that real social innovation comes from taking risks and expecting more. It was a privilege to be a part of this event and I encourage you to stay tuned for news about our next +IMPACT conference later this year.