By Danielle Ameden, Daily News Staff
MARLBOROUGH – If you donate $100 to fight breast cancer or feed the hungry, you want the money to go directly to the cause, not to a charity’s overhead, right?
It’s the way people are taught to think about giving: If the $100 is a pie, you don’t want a big slice of it going to administrative costs or advertising. You want the money to pay for medical research, or for groceries and hot meals for those in need.
“This makes sense if you don’t think about it for 30 seconds,” humanitarian activist and popular TED Talk expert Dan Pallotta said Thursday.
In his keynote speech at the 2016 United Way of Tri-County Community Recognition Event, Pallotta said he wants people to rethink the common belief that nonprofit organizations need to spend just about every dollar they make on direct services.
People think it’s wasteful, “irresponsible” or even immoral for a charity to have a lot of overhead but in reality, “the more of every dollar you want to go to the cause, the fewer dollars there will be,” Pallotta said.
Take the pie scenario. If a charity invests more money in a fundraising campaign that will generate exponentially more revenue, the size of the slices doesn’t matter. The organization raises a lot more money and the entire pie, he said, gets bigger.
Pallotta, who founded the Breast Cancer 3-Day and AIDS Ride, said people’s thinking when it comes to giving to the cause vs. overhead may be shifting.
Following his wildly successful TED Talk on the topic, three consumer watchdog agencies that had previously warned about overly large nonprofit overheads, issued a joint press release.
“To the Donors of America: We write to correct a misconception about what matters when deciding which charity to support. The percent of charity expenses that go to administrative and fundraising costs – commonly referred to as ‘overhead’ – is a poor measure of a charity’s performance…many charities should spend more on overhead,” the CEOs of Charity Navigator, GuideStar and the Better Business Bureau Wise Giving Alliance wrote. “The people and communities served by charities don’t need low overhead, they need high performance.”
“This,” Pallotta said, “was like hell freezing over.”
Pallotta said charities are tasked with solving the nation’s biggest social problems, but have been hamstrung by "rules" that keep them from acting the way private companies do.
He said the tide would turn if people trusted charities to be innovative the way Google, Uber and other corporations are in raising revenue and providing services.
“Is the nonprofit sector too not entitled to dream some daring Tesla-scale dreams?” Pallotta asked, addressing a crowd at the Best Western Royal Plaza Hotel.
“A critical piece of the problem is that the social challenges are gigantic in scale, even here in the Framingham-area,” he said. “You see it, our organizations are miniature up against the scale of these problems and with the best of intentions, we have a belief system that keeps these organizations miniature.”
Along those lines, United Way of Tri-County Director Paul Mina called on the large crowd to donate money to help his MetroWest nonprofit feed the hungry and provide literacy and other services. A text-to-donate challenge raised over $2,800 in four minutes.
The theme of this year's event was "The Ripple Effect," and the organization recognized its many community supporters for the impact they make.
Among the honorees: the Bose Corporation, FM Global, The TJX Cos., the MetroWest Daily News and Paul Dacier of EMC Corp. The United Way of Tri-County gave MetroWest/495 Corridor Volunteer of the Year awards to 14-year-old Julia Kidman of Milford and John Dulude, a 74-year-old volunteer at the Milford Youth Center
“I didn’t think my volleyball skills really meant that much,” joked Dulude, who took up the sport with the kids when he started giving his time three years ago.
Kidman, an eighth-grader at Middle School East, is involved with the youth center, Girl Scouts and the Juvenile Advocacy Group. She received a standing ovation as she accepted her award, and said afterward she’s glad to give back.
“I feel good about it because a lot of people say they want to help, but they can’t figure out how,” Kidman said.
Danielle Ameden can be reached at 508-626-4416 or firstname.lastname@example.org. Follow her on Twitter @damedenMW.