Wise Counsel?
Wise Counsel?

Wise Counsel?

Sadly, Pallotta's insight and experience in the humanitarian sector has produced little more than a book-length brochure for funding and promoting his next venture.

November 5 th 2012

Charity Case by Dan Pallotta. Jossey-Bass, 2012. 256pp.

My father told me years ago that understanding the base of a person's logic makes a difference. For instance, if someone believes that two plus two equals five, then it is perfectly logical for them to believe that two plus three equals six. It's not their logic that is wrong, but their starting point. I might say the same about Dan Pallotta's book, Charity Case. The author's logic makes sense but his basic assumptions are flawed. Charity Case is a valuable contribution in many ways but begins with a creed that is not only inaccurate but unnecessary and will alienate a constituency Pallotta will later need.

The book begins with a few punches at the Puritans with claims that they are most responsible for the inequities he wants to correct.

The Puritans believed that problems like poverty were ordained by God and that they would and should be with us forever. . . . The Puritans came to the New World for religious reasons, but they also came because they wanted to make a lot of money. They were aggressive capitalists. But at the same time, they were Calvinists, so they were taught, literally, to hate themselves. They were taught that self-interest was a raging sea that was a sure path to eternal damnation. Charity became an economic sanctuary where they could do penance for their profit-making tendencies. So how could they make money in charity if charity was their penance for making money? The Puritans created two economic worlds where there was only ever one. The merchants, farmers, and carpenters of the world got free market practice, and the needy (and all who served them) got this religion we call charity, whereby pretty much everything that worked in the market was banished. We are still stuck with this system today. Self-deprivation is still the prescribed path to social change.

This is a seriously skewed understanding of Puritan theology and practice but it will rouse the anger of those who do not know better—and anger is at the heart of the book. Throughout I kept hearing the voice of Howard Beasley in Network telling his viewers to get up, go to their windows and yell, "I am mad as hell, and I'm not going to take this anymore!"

But what is Pallotta so angry about and why does he want others to feel the same way? More importantly, what does he want people to do about it other than yell?

Well, the first cause of his anger is the over-emphasis of the those outside the non-profits themselves on the allocation of finances. "These Puritan ideas are held in place today by this one simplistic question: 'What percentage of my donation goes to the cause versus overhead?'" While I find blaming the Puritans unnecessary, I certainly agree with his conclusion. The non-profit world has been shaped by some assumptions on the part of donors that are hampering the work because we have oversimplified a useful tool. He quotes a letter he received: "The sector has fallen into a trap we created. By focusing on what we DON'T spend, and not on what has been accomplished, we have completely missed the mark in our messaging. We are part of this problem and it's up to us to educate our way out of it." While overhead is a useful measure, it is not the only measure and, in some cases, it can actually be misleading. What matters are results, and focusing completely on overhead as an end in itself is short-sighted and harmful.

Unfortunately, many donors have been taught by "watchdog" organizations to look at overhead and executive compensation as something that jeopardizes the cause instead of supporting it. While there obviously are examples of inflated expenses and little money going toward the mission of the organization—and those get the attention of the press—they are not representative of the majority of non-profits.

Secondly, Pallotta is upset that the non-profit community has allowed outside forces and misinformed people with agendas to shape the conversation and the public's overall view of non-profits as ineffective and defenseless do-gooders. "We despair that the general public will never understand the realities of our work, and yet we have never once spoken to them, as a whole, as a sector, in the medium of paid advertising in that way that business does about those realities." In other words, we don't just sanction the public's misguided prejudices, we nurture them. This is the heart of the book. His mission is to turn around the public's perception of the work of non-profits, which address the most serious issues of society and yet have somehow managed to put themselves in the position of having to apologize and beg for money instead of making the case for their invaluable contribution to the world.

What is his proposal for change? As I read further, I could hear John L. Lewis, the driving force of union organizing in the last century: "Let the workers organize. Let the toilers assemble. Let their crystallized voice proclaim their injustices and demand their privileges. Let all thoughtful citizens sustain them, for the future of Labor is the future of America."

The first step in solving the problem is to create a national leadership movement. Modelled after what Pallotta learned through his experience in creating other movements, he has created the Charity Defense Council that will fight for the right to do good. "Our goal is singular and bold: to change the way people think about changing the world. To let them know that low overhead is not the way the world gets changed. That poor executive compensation is not a strategic plan for ending hunger and poverty or curing disease. That inadequate, donated resources are not the path to global transformation." As he puts it several times in various ways throughout the book, it is time for an independent, well-funded, influential, national voice to "express outrage" and fight back against the media attacks, crippling legislation, and public misperceptions of the important work non-profits do. It is time to organize and fund the CDC to take on the task of representing non-profits and speaking with a unified voice that will force the public, the politicians, and the donors to change the way they think about and treat them. It is time to change the game because "public policymakers don't know what they are doing because the humanitarian sector has cowered before them instead of educated them." The CDC will correct that and be that powerful, well-funded—and that term is used several times—full-time organization dedicated to addressing these issues for the humanitarian sector.

The Charity Defense Council serves as an Anti-Defamation league to "rectify inaccurate and sensational reporting on the sector and on individual charities," and to "pro-actively educate the media." It will produce "brave and daring public ad campaigns" that will change the way people think about charity and will turn around the skewed and harmful perception of the humanitarian sector. It will create a legal defense fund that "will change counterproductive regulations and laws that violate our First Amendment rights" that are violated. It will change "oppressive laws and regulations that fundamentally work against us and that were designed for another age by people who are no longer living." Finally, it will "organize the sector on a town-by-town, state-by-state basis" to proactively change the way the public thinks about charity and how charities think about themselves. Sadly, his insight and experience in the humanitarian sector has produced little more than a book-length brochure for funding and promoting his next venture.

It's a long way from Mother Teresa's "Let us more and more insist on raising funds of love, of kindness, of understanding, of peace. Money will come if we seek first the Kingdom of God—the rest will be given." It really is, as Pallotta says, about responding to a world that has changed and a "humanitarian sector" that is no longer anchored in the values of the church. Not the church that Dan describes as self-loathing, hypocritical, and greedy bigots but the church that changed the world with hospitals, poverty alleviation, justice, individual dignity, and sacrificial compassion. Do we really need a Charity Defense Council? Perhaps we, at least as Christians, would be better served by following the counsel of Peter when he said, "For it is God's will that by doing good you should silence the ignorant talk of foolish men." I know that will not include being powerful, well-funded, influential, and feared, but it is really our best and most difficult option.

Fred Smith
Fred Smith

Fred Smith is the President of The Gathering, an international association of individuals, families, and foundations giving to Christian ministries. As well, Fred is the Chairman of Fourth Partner, a non-profit organization focused on philanthropy and community development within the East Texas area. Fred and his wife, Carol, reside in Tyler, Texas.


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