I hope you had a chance to view Dan Pallotta’s TED talk. This was center stage with an introduction from Chris Anderson, TED Founder and Chief Aggregator.
I got some great feedback on this talk. Almost all said, “THANKS FOR SHARING.” Many people weighed in on Pallotta’s message, which came across (to the For Impact Tribe) in many different ways
- Contrast between the business world and the not-for-profit world.
- Need to spend money to make money.
- If you really want to scale and grow, you need to be willing to spend large dollars.
- 40% on fundraising or admin is okay … as long as it’s a function of how much more money you can raise.
- ‘Overhead’ is a bad word.
Here is my take. Dan Pallotta is a really good presenter! Captured audience’s attention. Great visuals. Contrarian. Provocative. Causes you to think. In other words, everything a TED talk should be.
As all of you (who have been involved in this For Impact movement and thinking) know, however, my thinking on this is different in many ways:
- IMPACT drives INCOME. (If you really get this, all of the above is not as important.)
- To SCALE and GROW your IMPACT … you need to be able to ARTICULATE your message, purpose, etc. really well!
- We don’t even use the word ‘overhead’. As I’ve said to so many organizations and audiences over the years, “Of course, your investor’s money goes to ‘salaries’! It’s your ‘people’ that deliver your service and provide the impact. There’s not a philanthropist or entrepreneur or business person in the world who thinks that you can HAVE a huge IMPACT … or SCALE and GROW your IMPACT … without PEOPLE. Those PEOPLE require INVESTMENT.”
- Whatever ‘percent’ of your operating budget is labeled under ‘general administration’ or ‘fundraising’ should be driven as if you were a true entrepreneurial organization. You would not want money to go to ‘layers’, ‘middle management’ or roles or responsibilities.
- As an entrepreneurial organization, you should be asking how much of your money goes to products and services? To sales and marketing? To delivery and distribution?
- ***The smaller the organization … the more likely it is that everyone in the organization is involved with delivering impact.
Special Note: In our world, cost of fundraising is a legitimate issue. Too many orgs are spending 50¢ or 75¢ or $1.10 to raise $1.00!!! ‘Special events’ that aren’t special nor events. ‘Donor acquisition’ as a rationale for spending tons of money with little or no return. No major gifts program. No legacy program. No presentations. No asks.
A Nickel. A really strong major gifts program can raise money at 5¢ on the $1. That statement alone ought to cause some conversation!
Thanks to Dan P. for just keeping this Third Sector in front of TED audiences and their viral community!