Rethinking Nonprofit Organizations

What’s the first question that comes to mind when you want to assess how effective a nonprofit is?  For most people, it is “What percentage of your donations go to the cause?”  However, I am learning this is not the best method for assessing a nonprofit’s success.

Consider two soup kitchens.  One advertises that 90% of its donations go to its cause.  While this is true, it only serves 25 people, its staff is disrespectful to the kitchen patrons, and its soup is thin and not nutritious.  A second soup kitchen directs 50% of its donations to its cause.  However, it serves 200 people, employs well-trained staff that is courteous to its patrons, and serves soups that are hardy and healthy.  If you rely on the statistic of how much donations go to the cause, you will not be able to accurately assess which nonprofit organization is more effective.

Dan Pallotta, a social entrepreneur who created AIDSRides and Breast Cancer 3-day walk, events that netted $305 million for charities over nine years, addresses the above misconception about charity assessment in his book, Uncharitable.  Additionally, he argues that society’s conception of how nonprofits should run – that they should not use the same strategies as for-profit businesses – prevents nonprofits from reaching their full potential and restricts their ability to good.  For instance, Pallotta asserts that nonprofits should be able to offer competitive compensation to executives so that nonprofits can recruit talented leaders who can effectively grow their organizations.

Dan Pallotta made the time to meet with the Flying Kites team, for which we were very grateful.  Meeting with someone who has so much experience in the charitable world and has effected so much change was a very inspirational experience for us.  Reading his book and talking with him reinforced our commitment to pursue creative fundraising strategies for Flying Kites (more on these later!) and to stay true to our unique vision of providing exemplary care to Kenya’s orphans.

I highly recommend reading Uncharitable.  Whether you work in the nonprofit world or are a supporter of charities, the book will prompt you to question some long held societal conceptions about charities – conceptions that are in need of an update.