Profiting Non-Profits: The Capitalization of Charity

Pallotta has written a book–Charity Case–about his vision for marketizing the non-profit sector.

I just came across a TED talk by Dan Pallotta entitled “The way we think about charity is dead wrong“. Pallotta essentially lines up a criticism of traditional non-profit culture by comparing it to for-profit business models. He emphasizes that all the tools that for-profit business have: advertising, high salaries for CEOS and other decision-makers, investment capital, etc. are essentially unavailable to non-profit organizations. Pallotta outlines a reform proposal: non-profits need to think and act like for-profits if they are going to succeed. He points to a number of large campaigns in which aggressive marketing resulted in vast donations being given to a variety of causes (his two examples were races and rides for AIDS and breast cancer research). For Pallotta, the future of charities lies in using the tactics and tools of the business world to make non-profits more competitive and successful in securing funding.

Such a view of non-profits seems totally consistent with the culture of the Technology, Entertainment, Design conferences (TED). TED’s talks almost exclusively seem to focus on technological and market-based solutions to the world’s problems, with a heavy dose of self-congratulation over the successes of “social innovators”. Missing from every TED talk I’ve ever seen is any discussion of to what extent technology and neoliberalism themselves are parts–perhaps even core parts–of the very problems TEDers seem so resolved to solving. Pallotta can stand up on stage, pointing out that most MBAs in the private sector make $400k a year 10 years after college while most non-profit CEOs make half of that or less, and not recognize that incomes of this level are one of the driving cause of the very problem of poverty he supposedly wants to combat!

In other words, instead of recognizing that capitalism is largely the source of the evils that non-profits try to fight against, Pallotta only notices the material successes of private business and figures non-profits will have to adopt their tactics to be successful. But what does successful mean here? Pallotta focuses solely on raising funds–but the important issue is what those funds actually go to support. It’s certainly great–and impressive–that, as an organizer of public campaigns for non-profits, he was able to raise hundreds of millions of dollars. But how much of that money actually went to the causes it was given for? Pallotta himself admits that such tactics may lock up at least 40% of funding in overhead (though Pallotta himself hates this word and is clearly annoyed at its prominence in discussions around non-profits). But he goes further, suggesting that it should be no great scandal if a non-profit were taking in funds for six years without distributing any money to the causes it was championing. Pallotta is arguing that non-profits should adapt such an advertising, market-focused, infrastructural approach that their overhead would be 100% for years on end.

Such an approach would not only probably quash the source of donations–what giver wants to fork over their hard earned money to help March of Dimes develop a slicker image?–but would also likely invite irreversible mission creep. An organization that becomes nothing but a literal self-promotion machine is not going to be able to turn from that course and capitalize, as it were, on its popularity, to start directing funds towards the charitable causes it ostensibly would be assisting. An organization that was trying to compete with for-profit businesses for market-share and advertising attention would never be able to stop playing that game.

In fact, though Palletta seems to think his suggestion is totally novel and innovative, many are already criticizing a host of non-profits for falling into this mode of operation. The film Pink Ribbons, Inc. highlighted this trend by calling attention (among other things) to the fact that breast cancer awareness has become itself more of a public advertising campaign than an actual research- or care-funding community. A huge number of businesses engage in the pink ribbon advertising while actually producing goods or services that are carcinogenic(!) So while awareness of the reality of breast cancer may be expanding, the adoption of for-profit tactics–and allies–seems to have totally compromised charities like Susan G Komen for the Cure.

But my concerns with Palletta’s approach run much deeper. As I discussed a few weeks ago, the logic of capitalism is itself the crucial issue at hand. Instead of seeing poverty, for example, as a problem that strikes us out of the blue, and one which can be combated by implementing market-orient strategies, we need to recognize that the behavior of market-oriented firms and individuals is a huge cause of poverty in the first place. The old saying goes, “fight fire with fire,” but of course if you are actually fighting a fire, you need to use water. More fire won’t help. Likewise, trying to combat the collateral damage of capitalism with more capitalism is a pointless, even tragic endeavor. That smart, committed people like Palletta suggest such solutions only underscores how deeply the logic of capitalism has penetrated the core of both our public and private cultures and consciousness.

I would suggest that it is this reality–that we increasingly lack the capacity to think outside the box of neoliberal economic and social assumptions–that is the really pressing issue. If we can’t develop a new political ethics and build a society committed to environmental health, economic equality, and functioning communities, then all the non-profit strategies in the world are next to worthless; the need for help with medical costs, housing, and even just food is already skyrocketing here in the US, and as income and wealth inequality continue to soar, this will only be more true. Using corporate tactics to expand non-profits’ market-share in such an environment is akin to someone with breast cancer smoking a pack a day, hoping that the lung cancer might fight the tumor in their chest. It’s ridiculous, pathetically so; it’d be Quixotic if it weren’t so pathologically frightening.

At a time when humans need to fundamentally readjust their understanding of their own personhood, their place in human societies, and their place in the broader ecosystem, Palletta’s suggestions call for the lemmings to continue to throw themselves over the cliff–maybe eventually, we’ll fill the land below with enough bodies to build a bridge to the glorious future that he–and so many other TED presenters–see for humanity.

What we actually need is an economy that is owned equitably–this means strong unions; universal access to good education, medical care, and social insurance; worker-owned businesses; and an appreciation for and conservation of our “environmental capital”. Instead, Palletta seems to want to double down and go all-or-nothing. But he’s playing a game that, by its very design, only about 5% of any population can win. A few wealthier non-profit CEOs and a greater public image for a few fortunate causes that manage to outspend others–these things won’t fix the serious problems we face. They’ll just accelerate the rising tragedies of the modern world.

Though I embedded this in the previously mentioned post, it’s worth re-sharing. I think Slavoj Zizek here really captures the corrupted nature of the current non-profit as social-enterprise trend. If you didn’t watch this when I posted it before, definitely watch it now:

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