Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
Meanwhile this welcome development: GuideStar, BBBWiseGiving, Charity Navigator campaign to end charity overhead myth: http://trust.guidestar.org/2013/06/17/launching-a-campaign-to-end-the-overhead-myth/ Ingrid Srinath On 16 Jun 2013, at 21:46, Vinayak Hegde vinay...@gmail.com wrote: On Wed, Apr 10, 2013 at 12:33 PM, Ingrid Srinath ingrid.srin...@gmail.comwrote: One via media that works is organisations who get their start-up costs, investments funded by foundations allowing contributions from the public to be used almost entirely for programmes. An article relevant to this thread. TL;DR version - $1.3Billion Donated ,$1 Billion siphoned off to solicitation organisations. Worst charity only $0.03 out of $1 donated goes to charity. Conflicts of interests, Tax-evasion shenanigans and corruption is rampant in these charities mentioned in the article. http://edition.cnn.com/2013/06/13/us/worst-charities -- Vinayak
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 10, 2013 at 12:33 PM, Ingrid Srinath ingrid.srin...@gmail.comwrote: One via media that works is organisations who get their start-up costs, investments funded by foundations allowing contributions from the public to be used almost entirely for programmes. An article relevant to this thread. TL;DR version - $1.3Billion Donated ,$1 Billion siphoned off to solicitation organisations. Worst charity only $0.03 out of $1 donated goes to charity. Conflicts of interests, Tax-evasion shenanigans and corruption is rampant in these charities mentioned in the article. http://edition.cnn.com/2013/06/13/us/worst-charities -- Vinayak
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On 16 Jun 2013, at 21:46, Vinayak Hegde vinay...@gmail.com wrote: On Wed, Apr 10, 2013 at 12:33 PM, Ingrid Srinath ingrid.srin...@gmail.comwrote: One via media that works is organisations who get their start-up costs, investments funded by foundations allowing contributions from the public to be used almost entirely for programmes. An article relevant to this thread. TL;DR version - $1.3Billion Donated ,$1 Billion siphoned off to solicitation organisations. Worst charity only $0.03 out of $1 donated goes to charity. Conflicts of interests, Tax-evasion shenanigans and corruption is rampant in these charities mentioned in the article. http://edition.cnn.com/2013/06/13/us/worst-charities -- Vinayak This kind of criminal misconduct at the margins strengthens the case for clearer norms and greater transparency.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On 10 Apr 2013, at 10:12, Suresh Ramasubramanian sur...@hserus.net wrote: Oh, it depends. There is a tipping point beyond which a charity does need to focus on grassroots work rather than on management and logistics. And before that tipping point is reached, just ramping up staff, processes etc to the level where they need sophisticated management and marketing in place in order to maintain their current activities, let alone expand, will cost them significantly and possibly even distract from the activity they are meant to be performing .. service. While most charities do focus on service delivery at the grassroots, there are, of course, those that provide research, training, policy analysis and such. My experience suggests the best overall impact comes from policy advocacy by mobilised communities informed by grassroots experience. In practice that could mean, for instance, supplementing absent or dysfunctional schools, organising to get state schools to function adequately, using the data from such interventions to advocate for policy change. In my opinion, most donors are willing to support the first link in that sequence, not those that follow, since that's where the feel-good factor is highest. The subsequent activities are, however, more cost-effective in terms of the scale of impact.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
Ingrid Srinath On 10 Apr 2013, at 10:19, Charles Haynes charles.hay...@gmail.com wrote: On Wed, Apr 10, 2013 at 12:39 PM, Ingrid Srinath ingrid.srin...@gmail.comwrote: Charity J: Spends virtually nothing on donor acquisition... Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Could a charity spend overhead in ways I support? Sure. Do they? Not usually, usually overhead = fundraising. I.e. they are spending money to raise money. The problem is one of opportunity cost. If charity J spends 10 units directly on starving children, while charity Q spends 50 units on starving children and 50 units on raising funds, you might say that charity Q does more good. You might even be right. However, this analysis neglects the opportunity cost of that 50 units of fundraising. -- Charles The only issue I have with that logic is that it prevents any organisation from achieving sufficient scale to have significant impact. The charity sector may be the only one I know where success in terms of growth/size is penalised by those who support the sector.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 10, 2013 at 12:19 PM, Ingrid Srinath ingrid.srin...@gmail.com wrote: The only issue I have with that logic is that it prevents any organisation from achieving sufficient scale to have significant impact. The charity sector may be the only one I know where success in terms of growth/size is penalised by those who support the sector. Is there a need for a charity to grow to that scale if it weren't actually trying to cut costs substantially? Yes, some costs are cut by scale but I've yet to find a charity in India who has an aggressive goal to keep costs at 20% or less even in the next five years. Scale in this sector hardly seems to have the kind of impact one thinks of - even the biggest charities struggle to do the on-the-ground things (and usually outsource to more efficient, smaller charities). If all they're doing is being middlemen, then everyone will question the need for them to exist. With the advent of the net and the ability for the smaller folks to highlight what they do, like a Project Why, I believe the large-charity model will have to be done by the large-businessman-who-donates like the Buffetts and the Gates'. (also the private charity uses a tax loophole to pretty good effect).
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
There is an entirely different and unavoidable set of overheads for policy groups - conference travel, research for which they need to hire lawyers and economists rather than well meaning college kids (or perhaps, in addition to well meaning college kids..) My comment was more on service delivery related NGOs - I have yet to see too many corporations funding NGOs to the extent that Google does, but then they have a very active outreach program to organizations that share their policy goals. --srs (iPad) On 10-Apr-2013, at 12:17, Ingrid Srinath ingrid.srin...@gmail.com wrote: On 10 Apr 2013, at 10:12, Suresh Ramasubramanian sur...@hserus.net wrote: Oh, it depends. There is a tipping point beyond which a charity does need to focus on grassroots work rather than on management and logistics. And before that tipping point is reached, just ramping up staff, processes etc to the level where they need sophisticated management and marketing in place in order to maintain their current activities, let alone expand, will cost them significantly and possibly even distract from the activity they are meant to be performing .. service. While most charities do focus on service delivery at the grassroots, there are, of course, those that provide research, training, policy analysis and such. My experience suggests the best overall impact comes from policy advocacy by mobilised communities informed by grassroots experience. In practice that could mean, for instance, supplementing absent or dysfunctional schools, organising to get state schools to function adequately, using the data from such interventions to advocate for policy change. In my opinion, most donors are willing to support the first link in that sequence, not those that follow, since that's where the feel-good factor is highest. The subsequent activities are, however, more cost-effective in terms of the scale of impact.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On 10 Apr 2013, at 12:25, Deepak Shenoy deepakshe...@gmail.com wrote: On Wed, Apr 10, 2013 at 12:19 PM, Ingrid Srinath ingrid.srin...@gmail.com wrote: The only issue I have with that logic is that it prevents any organisation from achieving sufficient scale to have significant impact. The charity sector may be the only one I know where success in terms of growth/size is penalised by those who support the sector. Is there a need for a charity to grow to that scale if it weren't actually trying to cut costs substantially? Yes, some costs are cut by scale but I've yet to find a charity in India who has an aggressive goal to keep costs at 20% or less even in the next five years. Scale in this sector hardly seems to have the kind of impact one thinks of - even the biggest charities struggle to do the on-the-ground things (and usually outsource to more efficient, smaller charities). If all they're doing is being middlemen, then everyone will question the need for them to exist. With the advent of the net and the ability for the smaller folks to highlight what they do, like a Project Why, I believe the large-charity model will have to be done by the large-businessman-who-donates like the Buffetts and the Gates'. (also the private charity uses a tax loophole to pretty good effect). One via media that works is organisations who get their start-up costs, investments funded by foundations allowing contributions from the public to be used almost entirely for programmes.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Thu, Apr 4, 2013 at 3:28 AM, ashok _ listmans...@gmail.com wrote: On Tue, Apr 2, 2013 at 9:03 PM, Deepak Shenoy deepakshe...@gmail.comwrote: appropriate comparisions. When I complained (and continue to complain) of acquisition costs - not overhead, but just the costs of acquiring donations - of around 50%, I am told this is the industry average. If it is, it is obvious why people don't donate... Isnt acquisition cost a skewed metric to be evaluating charities on ? lets say you bought a brand of Soap after watching some adverts about it - you don't think about the advertising cost that inflated the cost of the Soap when you buy it. Also the impact of every person who did not donate raises the acquisition cost which then impacts the person who donated - i.e. they think the cost of acquisition is too high. (i.e. the cost of the Soap is higher because of all those people who didnt buy the Soap after watching the advert, so they had to publish more adverts ) . This is not so in the case of a charity. Let's divide the distribution of money into three categories: a) Investments b) Consumption (expenditure) c) Charity In b) (where soaps are) I don't care about the end use of my money. I care about the product I get - this is a barter, so I don't expect the manufacturer to tell me to use the soap in a certain way, and I don't get to tell him where he should use his money. In a) I care about the cost of making hte investment. The more that's taken by a middleman (say 2% entry load into a mutual fund or commissions when I buy a property) the less the money that goes into whatever I've invested in. A 2% entry and exit load or commission means what I invest has to grow 4% just for me to break even. Beyond that, I can't dictate too much. The acquisition cost usually figures in entry or exit loads, or annual management fees, so I will try to minimize those (unless the intermediary can substantially raise investment values) In c) I care about the end use of my money, because the only reason I'm donating to charity is for it to make me feel good. All altruism is about making one feel good about doing good to someone else. If I get the whiff that half my money is going to pay for acquisition, then I'm thinking: forget it, I'll find an orphanage or old age home and donate direct. Yes, there are other causes that need attention. But the 50% load just puts me off. I think I'll only be happy with 10% and other overheads of another 10%. I think an equation which takes into account - total raised monies, cost of raising monies, total %age of annual turnover that goes towards the actual purpose of the charity may be better ? yes, of course. But as I've said, I might excuse overhead as payment for good quality people. They are part of the cause. For instance you can't achieve proper child education without sanitation, food and stable homes. So if a child education charity were to say they'll give some money to parents for rent/sundry expenses, or build a common toilet, I don't have a problem even if it isn't the main cause. So paying a plumber is ok. Paying people industry level salaries is ok. These might actually appear as overheads in many cases, and therefore I wish to make a distinction between the actual purpose % and the cost of acquisition. However these other factors are also important. If industry level salaries means that 80% of the money raises is overheads, then I think we have a problem back again. I'm not going to feel good paying someone industry level salaries to deploy 1/4th their salary on a good cause. And the feel good factor is important.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
In a) I care about the cost of making hte investment. The more that's taken by a middleman (say 2% entry load into a mutual fund or commissions when I buy a property) the less the money that goes into whatever I've invested in. A 2% entry and exit load or commission means what I invest has to grow 4% just for me to break even. Beyond that, I can't dictate too much. The acquisition cost usually figures in entry or exit loads, or annual management fees, so I will try to minimize those (unless the intermediary can substantially raise investment values) In c) I care about the end use of my money, because the only reason I'm donating to charity is for it to make me feel good. All altruism is about making one feel good about doing good to someone else. If I get the whiff that half my money is going to pay for acquisition, then I'm thinking: forget it, I'll find an orphanage or old age home and donate direct. Yes, there are other causes that need attention. But the 50% load just puts me off. I think I'll only be happy with 10% and other overheads of another 10%. Deepak, Here are a couple of devil's advocate scenarios: Charity J: Spends virtually nothing on donor acquisition, brand building, policy advocacy, professional staff, technology or monitoring and evaluation. Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Would it be the latter subject to say, a 30% cap on 'overheads'? By the way, one simple way to help a charity lower its fundraising costs is to pledge long-term support. Ingrid
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
Oh, it depends. There is a tipping point beyond which a charity does need to focus on grassroots work rather than on management and logistics. And before that tipping point is reached, just ramping up staff, processes etc to the level where they need sophisticated management and marketing in place in order to maintain their current activities, let alone expand, will cost them significantly and possibly even distract from the activity they are meant to be performing .. service. Ingrid Srinath [10/04/13 10:09 +0530]: In a) I care about the cost of making hte investment. The more that's taken by a middleman (say 2% entry load into a mutual fund or commissions when I buy a property) the less the money that goes into whatever I've invested in. A 2% entry and exit load or commission means what I invest has to grow 4% just for me to break even. Beyond that, I can't dictate too much. The acquisition cost usually figures in entry or exit loads, or annual management fees, so I will try to minimize those (unless the intermediary can substantially raise investment values) In c) I care about the end use of my money, because the only reason I'm donating to charity is for it to make me feel good. All altruism is about making one feel good about doing good to someone else. If I get the whiff that half my money is going to pay for acquisition, then I'm thinking: forget it, I'll find an orphanage or old age home and donate direct. Yes, there are other causes that need attention. But the 50% load just puts me off. I think I'll only be happy with 10% and other overheads of another 10%. Deepak, Here are a couple of devil's advocate scenarios: Charity J: Spends virtually nothing on donor acquisition, brand building, policy advocacy, professional staff, technology or monitoring and evaluation. Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Would it be the latter subject to say, a 30% cap on 'overheads'? By the way, one simple way to help a charity lower its fundraising costs is to pledge long-term support. Ingrid
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 10, 2013 at 12:39 PM, Ingrid Srinath ingrid.srin...@gmail.comwrote: Charity J: Spends virtually nothing on donor acquisition... Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Could a charity spend overhead in ways I support? Sure. Do they? Not usually, usually overhead = fundraising. I.e. they are spending money to raise money. The problem is one of opportunity cost. If charity J spends 10 units directly on starving children, while charity Q spends 50 units on starving children and 50 units on raising funds, you might say that charity Q does more good. You might even be right. However, this analysis neglects the opportunity cost of that 50 units of fundraising. -- Charles
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 10, 2013 at 10:09 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: Deepak, Here are a couple of devil's advocate scenarios: Charity J: Spends virtually nothing on donor acquisition, brand building, policy advocacy, professional staff, technology or monitoring and evaluation. Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Would it be the latter subject to say, a 30% cap on 'overheads'? But that's what I call the problem with overheads per se. You have to get more detailed. I have seen brochures from large NGOs and annual reports printed on very expensive paper. I've seen NGO seniors travel J class on flights, billed to the NGO (non international, in the late 90s). One of the building knowledge pieces involved a sojourn to Goa for a large number of people in Fort Aguada or some such resort. This is not great ways to spend money; you might actually reach more people this way, but it is at a substantially higher cost, and it might be more efficient forme to find 10s of Charity J's to spend on. I would say that Charity Q is doing a disservice by not substantially optimizing costs to stay under 20%/30% ranges, or plan to do so in the near term. I would like to see more efficient spending by them, instead of just attempting to make the programs they sponsor more effective. I mean that if you have 10 people in Fort Aguada for a week at 10K per person per night, to make a program that costs Rs. 50 lakh more efficient by 10%, you might as well ditch the Aguada trip and give them the Rs. 6 lakh extra. By the way, one simple way to help a charity lower its fundraising costs is to pledge long-term support. Agreed. Thats why Payroll giving works so well (in the west at least). There's also a theory that instead of doign the spray and pray you should find one cause and give enough to do it justice. Like building one school, funding one old age home etc.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
The corporate social responsibility heads at various corporations .. well, a lot of them just like being on the boards of dozens of charities, and spray and pray - gives them lots more publicity, seems like a lot of time well spent. And very similar with a certain breed of professional charity execs I run across occasionally. They wouldn't dream of getting their hands dirty working directly with a slum kid, abused child, dying cancer patient or whatever - except under carefully controlled circumstances such as a felicitation event once a year. The comments about opportunity cost are spot on as well. --srs (iPad) On 10-Apr-2013, at 10:48, Deepak Shenoy deepakshe...@gmail.com wrote: On Wed, Apr 10, 2013 at 10:09 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: Deepak, Here are a couple of devil's advocate scenarios: Charity J: Spends virtually nothing on donor acquisition, brand building, policy advocacy, professional staff, technology or monitoring and evaluation. Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Would it be the latter subject to say, a 30% cap on 'overheads'? But that's what I call the problem with overheads per se. You have to get more detailed. I have seen brochures from large NGOs and annual reports printed on very expensive paper. I've seen NGO seniors travel J class on flights, billed to the NGO (non international, in the late 90s). One of the building knowledge pieces involved a sojourn to Goa for a large number of people in Fort Aguada or some such resort. This is not great ways to spend money; you might actually reach more people this way, but it is at a substantially higher cost, and it might be more efficient forme to find 10s of Charity J's to spend on. I would say that Charity Q is doing a disservice by not substantially optimizing costs to stay under 20%/30% ranges, or plan to do so in the near term. I would like to see more efficient spending by them, instead of just attempting to make the programs they sponsor more effective. I mean that if you have 10 people in Fort Aguada for a week at 10K per person per night, to make a program that costs Rs. 50 lakh more efficient by 10%, you might as well ditch the Aguada trip and give them the Rs. 6 lakh extra. By the way, one simple way to help a charity lower its fundraising costs is to pledge long-term support. Agreed. Thats why Payroll giving works so well (in the west at least). There's also a theory that instead of doign the spray and pray you should find one cause and give enough to do it justice. Like building one school, funding one old age home etc.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
Unfortunately, in my experience a lot of talk of charity overheads is just a way of rationalizing tight fistedness. Quick bit of math: 10 bucks to a charity with 90% overheads has one buck worth of value more than sitting on a 100 bucks waiting for the ideal charity. I, for example, could probably give 10x more to charity before I felt the pinch. I should probably just do that instead of pontificating on mailing lists. :-) -- b On Wed, Apr 10, 2013 at 10:48 AM, Deepak Shenoy deepakshe...@gmail.com wrote: On Wed, Apr 10, 2013 at 10:09 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: Deepak, Here are a couple of devil's advocate scenarios: Charity J: Spends virtually nothing on donor acquisition, brand building, policy advocacy, professional staff, technology or monitoring and evaluation. Deploys virtually the entirety of the small sums they collect to feed starving children. Saves their lives but does nothing to expand the number of lives they can save or to prevent more children from being reduced to starvation. Charity Q: Spends about 50% of their revenues on expanding their donor base, auditing programmes to improve effectiveness/efficiency, building knowledge on causes of and remedies to poverty. Consequently, reaches greater numbers of children with greater effectiveness each year, changes policies that cause poverty or prevent its reduction, develops programme innovations that are widely replicated by other charities and governments. Which would you choose to support? Would it be the latter subject to say, a 30% cap on 'overheads'? But that's what I call the problem with overheads per se. You have to get more detailed. I have seen brochures from large NGOs and annual reports printed on very expensive paper. I've seen NGO seniors travel J class on flights, billed to the NGO (non international, in the late 90s). One of the building knowledge pieces involved a sojourn to Goa for a large number of people in Fort Aguada or some such resort. This is not great ways to spend money; you might actually reach more people this way, but it is at a substantially higher cost, and it might be more efficient forme to find 10s of Charity J's to spend on. I would say that Charity Q is doing a disservice by not substantially optimizing costs to stay under 20%/30% ranges, or plan to do so in the near term. I would like to see more efficient spending by them, instead of just attempting to make the programs they sponsor more effective. I mean that if you have 10 people in Fort Aguada for a week at 10K per person per night, to make a program that costs Rs. 50 lakh more efficient by 10%, you might as well ditch the Aguada trip and give them the Rs. 6 lakh extra. By the way, one simple way to help a charity lower its fundraising costs is to pledge long-term support. Agreed. Thats why Payroll giving works so well (in the west at least). There's also a theory that instead of doign the spray and pray you should find one cause and give enough to do it justice. Like building one school, funding one old age home etc.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 10, 2013 at 11:04 AM, Suresh Ramasubramanian sur...@hserus.netwrote: The corporate social responsibility heads at various corporations .. well, a lot of them just like being on the boards of dozens of charities, and spray and pray - gives them lots more publicity, seems like a lot of time well spent. And very similar with a certain breed of professional charity execs I run across occasionally. I guess there will always be those who go in their fancy dresses and fancy cars to the charity balls and multi-dollar dinners, and those who actually work for the causes themselves...both are required. But can we not have some mandated transparency from organizations, showing what percentage of their income is being spent on admin and other costs, and what actually goes to the work done? In India I find very low accountability on the part of NGOs.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Tue, Apr 2, 2013 at 9:03 PM, Deepak Shenoy deepakshe...@gmail.comwrote: appropriate comparisions. When I complained (and continue to complain) of acquisition costs - not overhead, but just the costs of acquiring donations - of around 50%, I am told this is the industry average. If it is, it is obvious why people don't donate... Isnt acquisition cost a skewed metric to be evaluating charities on ? lets say you bought a brand of Soap after watching some adverts about it - you don't think about the advertising cost that inflated the cost of the Soap when you buy it. Also the impact of every person who did not donate raises the acquisition cost which then impacts the person who donated - i.e. they think the cost of acquisition is too high. (i.e. the cost of the Soap is higher because of all those people who didnt buy the Soap after watching the advert, so they had to publish more adverts ) . I think an equation which takes into account - total raised monies, cost of raising monies, total %age of annual turnover that goes towards the actual purpose of the charity may be better ?
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Sat, Mar 23, 2013 at 11:01 AM, Ingrid Srinath ingrid.srin...@gmail.comwrote: On 22 Mar 2013, at 17:46, Pranesh Prakash the.solips...@gmail.com wrote: On Thu, Mar 21, 2013 at 6:56 AM, Ingrid SrinathThanks, Pranesh. Tax exemption aside, the expectation that an organisation can be viable and grow to scale when it's not permitted to: accumulate reserves incur debt invest in people, technology, marketing or take risks especially when these organisations exist to tackle the nasty, intractable problems that both state and market have failed at, seems to me unreasonable. But then how different are you from the market if you end up being a for-profit organization ? I dont know what the point of the video is, maybe my perspective is skewed ... since such for-profit corporations already exist in the charity sector in a massive scale. For e.g. the way USAID funded projects are implemented in developing countries is via large framework contracts which get awarded to for-profit companies. EuropeAID has been moving towards this model too ... (you don't have to look beyond companies like chemonics, european dynamics, c.t.g global etc ... ). In conflict / post-conflict zones such companies make huge killings ... I saw this first hand in the congo ... and more recently take Somalia where everything from security infrastructure (think armored cars ) to IT services (think email ) is contracted to one party by the United Nations... so you end up in ridiculous situations where the contracted company insists everyone has to use an armored car to move from point A to point B (since it gets billed $1500 / hour ) - and they use local handlers to operate the security apparatus (who are militia themselves ! ) OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' is, I believe, as much a consequence of the sector's failure to provide plausible alternatives, and its willingness to play the ratio game, as it is of the need for a one-size-fits-all comparator. Is there a good norm, for instance, on remuneration or incentives? Benchmarking to private or public sector equivalents, seems to me to, at best, set limits. Current practice limits entry to those who can afford it, either because they have other sources of income/support or are willing to make some stark lifestyle choices for themselves and their families. The perverse donor logic that success must be penalised by favouring organisations that are smaller, less 'savvy' is another bugbear. Most critically, as regular citizens, how do we propose to sustain an independent public sphere - media, civil society, regulation - free from the control of state and market and/or dependence on the whims of big philanthropy? Especially when it is clear that poor governance is at the root of most, if not all, our current crises? The growing trend towards crowdfunding privileges the short-term, easily measured, simply communicated, emotional appeal over the boring, unsexy, long-term work that yields systemic or structural change. Recent developments - media regulation in the UK, the new constraints of India's proposed direct tax code, the debate around mandatory CSR, and the ongoing battle for freedoms of expression, assembly and association around the world - make these questions more urgent than ever. - Ingrid
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
- *OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' . to play the ratio game, as it is of the need for a one-size-fits-all comparator* Sorry...but that acronym, those wordsI'm afraid this is a good example of the kind of prose that will switch my attention off. For this passage (or failage) above, I have to remember On The Other Hand. I have to think of what reductionist means. Figure out what overhead revenue ration is. What metric of deservingness is...what a comparator is...all this before trying to follow the actual argument! We do seem to forget how to keep our words simple. Deepa.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
Ingrid, What parts of the DTC are the worst for the NGO sector? Would like to hear also of some alternatives, or at least to address whatever has caused the IT department to believe that a change from current rules was necessary? OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' is, I believe, as much a consequence of the sector's failure to provide plausible alternatives, and its willingness to play the ratio game, as it is of the need for a one-size-fits-all comparator. I agree, and in India at least, there is very little effort at transparency. When I wrote about Oxfam's heavily skewed ratio, Oxfam management did get in touch, and the one thing they mentioned was that at least we reveal these numbers. It's horrendously difficult to get appropriate comparisions. When I complained (and continue to complain) of acquisition costs - not overhead, but just the costs of acquiring donations - of around 50%, I am told this is the industry average. If it is, it is obvious why people don't donate... On Sat, Mar 23, 2013 at 1:31 PM, Ingrid Srinath ingrid.srin...@gmail.com wrote: On 22 Mar 2013, at 17:46, Pranesh Prakash the.solips...@gmail.com wrote: On Thu, Mar 21, 2013 at 6:56 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: This TED Talk touches on some of the perverse disincentives non-profits face that hamper scale, innovation, sustainability and impact. They are issues I've grappled with, sometimes successfully, sometimes not, for 15 years. Aspects have featured on silk previously. The proposed Indian Direct Tax Code exacerbates the problem considerably: http://www.cafindia.org/DTC-NGO.pdf I would love to know what folks here think on this subject. http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html I haven't seen this yet, but you might be interested in this: http://www.economist.com/node/21556570 Thanks, Pranesh. Tax exemption aside, the expectation that an organisation can be viable and grow to scale when it's not permitted to: accumulate reserves incur debt invest in people, technology, marketing or take risks especially when these organisations exist to tackle the nasty, intractable problems that both state and market have failed at, seems to me unreasonable. OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' is, I believe, as much a consequence of the sector's failure to provide plausible alternatives, and its willingness to play the ratio game, as it is of the need for a one-size-fits-all comparator. Is there a good norm, for instance, on remuneration or incentives? Benchmarking to private or public sector equivalents, seems to me to, at best, set limits. Current practice limits entry to those who can afford it, either because they have other sources of income/support or are willing to make some stark lifestyle choices for themselves and their families. The perverse donor logic that success must be penalised by favouring organisations that are smaller, less 'savvy' is another bugbear. Most critically, as regular citizens, how do we propose to sustain an independent public sphere - media, civil society, regulation - free from the control of state and market and/or dependence on the whims of big philanthropy? Especially when it is clear that poor governance is at the root of most, if not all, our current crises? The growing trend towards crowdfunding privileges the short-term, easily measured, simply communicated, emotional appeal over the boring, unsexy, long-term work that yields systemic or structural change. Recent developments - media regulation in the UK, the new constraints of India's proposed direct tax code, the debate around mandatory CSR, and the ongoing battle for freedoms of expression, assembly and association around the world - make these questions more urgent than ever. - Ingrid
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On 2 Apr 2013, at 23:33, Deepak Shenoy deepakshe...@gmail.com wrote: Ingrid, What parts of the DTC are the worst for the NGO sector? Would like to hear also of some alternatives, or at least to address whatever has caused the IT department to believe that a change from current rules was necessary? The provision that makes all surpluses not disbursed in the year they are collected taxable is a key issue. Only incomes raised in the last month of the fiscal year and a further 15% of net incomes are exempt provided the NGO submits a schedule to disburse these. This ensures that NGOs cannot accept multi-year grants, build reserves or plan for the medium or long term. The proposal to withdraw 35AC (100% deduction) will have some impact on revenues. Possibly most dangerous is the narrowing of the definition of charitable purpose to service delivery making advocacy, research etc. taxable. The stated intent is to prevent for-profit organisations using NGO status to evade taxes. More here: http://xa.yimg.com/kq/groups/20416062/188164697/name/Appeal+For+Action+(English).pdf OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' is, I believe, as much a consequence of the sector's failure to provide plausible alternatives, and its willingness to play the ratio game, as it is of the need for a one-size-fits-all comparator. I agree, and in India at least, there is very little effort at transparency. When I wrote about Oxfam's heavily skewed ratio, Oxfam management did get in touch, and the one thing they mentioned was that at least we reveal these numbers. It's horrendously difficult to get appropriate comparisions. When I complained (and continue to complain) of acquisition costs - not overhead, but just the costs of acquiring donations - of around 50%, I am told this is the industry average. If it is, it is obvious why people don't donate... That ratio is essentially a consequence of the composition of revenue and the channels used e.g. Large donations from a few institutional donors would typically result in a low ratio whereas an organisation dependent on raising many small sums from a larger number of donors would have a higher ratio.Of course that choice also affects the organisations level of freedom and stability as larger sums almost inevitably carry conditions and are subject to abrupt changes. Online donations, for example, cost less to raise than those obtained via direct mail, telemarketing or face-to-face methods. The American Institute of Philanthropy's upper bound on fundraising costs is 35%. My concern is the absence of norms rather than a particular ratio.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On 2 Apr 2013, at 23:20, Deepa Mohan mohande...@gmail.com wrote: - *OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' . to play the ratio game, as it is of the need for a one-size-fits-all comparator* Sorry...but that acronym, those wordsI'm afraid this is a good example of the kind of prose that will switch my attention off. For this passage (or failage) above, I have to remember On The Other Hand. I have to think of what reductionist means. Figure out what overhead revenue ration is. What metric of deservingness is...what a comparator is...all this before trying to follow the actual argument! We do seem to forget how to keep our words simple. Deepa. Apologies, Deepa.
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Wed, Apr 3, 2013 at 12:53 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: On 2 Apr 2013, at 23:20, Deepa Mohan mohande...@gmail.com wrote: - *OTOH, the reductionist overhead:revenue ratio as a metric of 'deservingness' . to play the ratio game, as it is of the need for a one-size-fits-all comparator* Sorry...but that acronym, those wordsI'm afraid this is a good example of the kind of prose that will switch my attention off. For this passage (or failage) above, I have to remember On The Other Hand. I have to think of what reductionist means. Figure out what overhead revenue ration is. What metric of deservingness is...what a comparator is...all this before trying to follow the actual argument! We do seem to forget how to keep our words simple. Deepa. Apologies, Deepa. We all do this. I often catch myself talking about a 'resource', 'headcount' or an FTE when I should just say person. These are particularly egregious in my book because these de-humanizing words are the first step of the common software industry practice of converting people into interchangeable square pegs that are then hammered into round holes. -- b
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Sat, Mar 23, 2013 at 01:31:42PM +0530, Ingrid Srinath wrote: On 22 Mar 2013, at 17:46, Pranesh Prakash the.solips...@gmail.com wrote: On Thu, Mar 21, 2013 at 6:56 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: This TED Talk touches on some of the perverse disincentives non-profits face that hamper scale, innovation, sustainability and impact ... http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html My knee-jerk reaction is that anything that hampers Dan Pallotta is probably a good thing. My ex-wife bicycled from San Francisco to Los Angeles twice to raise money for AIDS charities in the California AIDSRide, which was organized using Pallotta Teamworks at the time. When she saw Dan Pallotta taking credit for the fundraising she, and thousands of other people, had accomplished, she was disgusted, and she resolved never to participate in the AIDSRide again. Many, many other people felt the same way, and Pallotta was diverting the majority of the money raised to his own organization, so the charities decided to organize the next year's event without Pallotta. In response, Dan Pallotta launched a lawsuit against them. He used the money my ex-wife raised to benefit AIDS charities to SUE those very charities to prevent them from raising further funds! In the end, they had to change the name of the event, but fortunately they destroyed Pallotta Teamworks (which laid off all its employees), and they were able to continue the event under the name AIDS/LifeCycle. Today the AIDS/LifeCycle includes some 2200 riders and raises some US$12M per year --- slightly more money than the $11.5M Pallotta's AIDSRide did in its peak year of 2001, when it had 2800 riders, but providing some four times the funding to the charities themselves. How much money was Pallotta diverting to himself and his own 300+ employees? Well, it varied from event to event, in the heist Pallotta pulled off in Florida in 1998, where less than 12% of the money --- one eighth --- went to the Florida AIDS charities that were the nominal beneficiaries of the Florida AIDSRide. That was the last year he did business in Florida. He was also unceremoniously ejected from Pennsylvania, and had to fork over a fine for his misconduct there. So, don't trust Dan Pallotta. He's a scammer. And definitely don't listen to him when he tells you how non-profits ought to be run. http://money.cnn.com/magazines/fsb/fsb_archive/2002/03/01/319484/index.htm
Re: [silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
On Thu, Mar 21, 2013 at 6:56 AM, Ingrid Srinath ingrid.srin...@gmail.com wrote: This TED Talk touches on some of the perverse disincentives non-profits face that hamper scale, innovation, sustainability and impact. They are issues I've grappled with, sometimes successfully, sometimes not, for 15 years. Aspects have featured on silk previously. The proposed Indian Direct Tax Code exacerbates the problem considerably: http://www.cafindia.org/DTC-NGO.pdf I would love to know what folks here think on this subject. http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html I haven't seen this yet, but you might be interested in this: http://www.economist.com/node/21556570
[silk] Dan Pallotta: The way we think about charity is dead wrong | Video on TED.com
This TED Talk touches on some of the perverse disincentives non-profits face that hamper scale, innovation, sustainability and impact. They are issues I've grappled with, sometimes successfully, sometimes not, for 15 years. Aspects have featured on silk previously. The proposed Indian Direct Tax Code exacerbates the problem considerably: http://www.cafindia.org/DTC-NGO.pdf I would love to know what folks here think on this subject. http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong.html Ingrid Srinath
