Revamp your mindset about charities

By Logeetha Balakrishnan

I recently watched two TED Talks, one by Dan Pallotta and the other by Melinda Gates, which landed me in the proverbial chicken and egg conundrum.

Melinda wants nonprofits to follow Coca Cola’s innovative model and methods in order to reach those most in need while Dan points out the double standards of society which wouldn’t approve of nonprofits to operate as such because it would be considered ‘immoral’ of nonprofits to invest in marketing or scaling their operations.

Melinda was extremely intrigued when she realized communities which had no access to running water or electricity had one thing; Coca Cola. It was baffling how Coca Cola had somehow managed to gain access into communities where government agencies and nonprofit organizations were struggling to reach. And then she figured out what made Coca Cola as ubiquitous as it was. They take real-time data and immediately feed it back into the product. They tap into local entrepreneurial talent. They do phenomenal marketing.  

Those things mentioned above in accounting terms would be called overheads.  The beast, the head of the devil, the root of all things evil in the nonprofit world. But if it is acceptable for Coca Cola to operate as such and pass the costs to the consumers, why does it bring out such negative reactions when nonprofits try to get funding for operational costs? Dan points out it’s actually rooted in the way we look at charities. It’s our double standards. 

Just like the corporate giants, without investing in people and operations, there is no way a nonprofit will be able to grow and impact more lives. More and more talent will continue to be lost to the for-profit sector if nonprofits are not encouraged to pay market level salaries for qualified talent.

Most people would never sacrifice the economic well-being of themselves and their families to take a job that pays way below what they could be earning elsewhere. As Dan said, it would be cheaper for a CEO of a large corporation to donate $100 000 a year and still take home more money, than to be a CEO of a nonprofit organization. This clearly shows something is not right with our society where you can get paid more to create violent video games than you would working to get someone access to education.

This double standard mindset is definitely slowing down progress. Melinda said we are actually 99% of the way to completely curing polio but funders are backing out due to ‘polio fatigue’; essentially being bored with the cause and Dan’s company went bust because they spent too much on ‘overheads’ which although allowed the company to scale and raise hundreds of million of dollars to help other people, the ‘high’ overheads did not go down well with the funders.

Who cares if you used 40% of your budget for operations and paying fair wages if you managed to help find a cure for AIDS or prevented thousands of children from dying of extreme hunger? Our society apparently does. The same society that has no qualms paying for an exorbitantly priced cup of coffee.