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#AsianCharityClarity: The way we think about charity is dead wrong.

‘The way we think about charity is dead wrong.’

That was the title of activist and fundraiser Dan Pallotta’s March 2013 TED Talk. 

He spoke about how we as a society have different rulebooks for the nonprofit sector and the rest of the world when it comes to assessing what makes a great charity. We penalise high executive pay, marketing spend and the pursuit of new ideas for generating revenue in charities in a way that we would not in a business.

In other words, we penalise charities for thinking big.

 

My experience has been that within the Indian community in the UK certainly, but also more widely, many people think of charities as their duty to society (their “sewa”).  This is often used as an excuse not to professionalise or to build sustainability into the operations of a charity.

Trustees are very well meaning, they love what they do, and care deeply for the end beneficiaries.

But they care equally, or more, about keeping costs low, not spending on marketing and advertising, not taking risk in the pursuit of new ideas, and not investing in the long-term.

In India, large companies have to put 2% of their net profits into Corporate Social Responsibility (CSR) activities as part of new government rules.  This means a huge market for organisations which can credibly assess how this money should be spent, which charities use it effectively and how to reward the best charities with the biggest accomplishments.

Businesses exist to create financial impact.  Charities exist to have social impact.  A business’ profitablity depends on the cash it generates.  A charity’s success is determined by what difference it makes to society. 

But to measure both, there needs to be a yardstick.  A way to assess whether a company is profitable, and a charity is producing social value.  So the organisations in India which can help companies spent their 2% CSR advise the businesses how to donate their money, in the language the business leaders understand.

That language is one that takes into accounts costs – sure, it must do – but but the most important factor is how big the charities are thinking and how successful they will be at solving the most pressing social issues of our time.

We should think about charity in a way that looks at the end result, rather than the inputs.

Dan Pallota said our generation should not want its epitaph to read, “We kept charity overhead low.”  So the next time you’re looking at a charity, don’t ask about the rate of their overhead. Don’t ask about whether they are entirely volunteer-run. Don’t judge their success by how much they struggle.

Instead ask about the scale of their dreams. Think about how they measure progress towards those dreams. And how our generation’s enduring legacy to our children could be to reinvent the whole way humanity thinks about changing things for the better.

 

 

The author is founder of Asian Charity Clarity. 

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