Dan Pallota of the consultancy Advertising for Humanity says the sector must show the public the importance of donated money being used for overheads
Charities must educate the public about the value of spending donated money on overheads such as advertising, delegates to the International Fundraising Congress have been told.
Speaking at the closing plenary of the conference in the Netherlands, Dan Pallota, the president of the US consultancy Advertising for Humanity, said the sector was at a "complete disadvantage" because society viewed it differently from the private sector.
"We blame capitalism for creating huge inequalities in our society," he said. "But then we refuse to allow the not-for-profit sector to use the tools of capitalism to rectify those inequalities."
He said people did not like to see their donations being spent on advertising by charities. But this lack of marketing was part of the reason why the percentage of many countries’ GDP that went to charitable giving had stayed stagnant over many years, he said.
Pallotta said that, with other members of the sector, he was launching a "charity defence council" in the US, which he hoped would eventually become an international campaign.
He said the scheme was intended to defend charities against defamation and would launch a big advertising campaign to educate the public about the value of overheads.
"We have to start to engage with the public about these things on a massive scale," he said. "The public don’t know any better because we don’t speak to them."
Pallotta said it could be damaging to the sector when charities told people that only a certain percentage of their donations was spent on overheads.
"This makes us think overhead is not part of the cause," he said. "It absolutely is."