Interview: Dan Pallotta

The American consultant and star of this year's International Fundraising Congress tells Sophie Hudson that charities need to persuade the public to let them use "the tools of capitalism"

Dan Pallotta
Dan Pallotta

Dan Pallotta's closing plenary speech at this year's International Fundraising Congress, which took place in the Netherlands last month, caused such a stir that fundraisers leaving the auditorium stuck sheets of paper on themselves announcing proudly that they were an "overhead".

There was a buzz of excitement about the presentation because here at last was someone raising one of the most contentious issues in the sector - the running costs of charities - and arguing that it was possible to persuade the public to accept that such costs are realistic and necessary.

Pallotta, president of the US consultancy Advertising for Humanity, used his speech to develop the main ideas in his provocative 2008 book Uncharitable, which challenges society's unwritten rules for the third sector. It argues that public disapproval of the sector's use of the tools of capitalism, including high salaries, risk-taking and the acceptance of overheads such as advertising, undermines its ability to confront the great problems it is trying to solve.

Pallotta, who raised millions by bike rides and walks for causes such as Aids and breast cancer, says he has been moved by people's reaction to the book and his IFC session.

"I think a lot of people have been thinking these things and have been hungry to hear somebody say 'the emperor has no clothes and we're doing this all wrong','" he says. "I've been moved to see the return of a kind of excitement that I think has been lost. People are working on these important issues, but the context for their work is they can never have enough resources to actually affect the problem. And that's debilitating."

But while these new ways of thinking have started to develop in the sector, says Pallotta, the public is unaware of the conversation. "The public holds all the sway," he says. "The public demands low overheads and elected officials respond to what the public wants. The media is interested in sensationalising issues based on what the public wants. Charities are afraid to do anything other than what the public wants. So that's where we need a mind-shift."

But the public is often relied upon for donations, so should people not be given what they want by charities? "Donors don't know what they want until you show it to them," Pallotta says. "They want to make a difference. They want to see children fed on a mass scale, cures for diseases - they want to see the world improved."

And because charities know best how to reach these goals, says Pallotta, they need to do a better job of educating donors about how these goals can be reached. "We're withholding all of this important information out of fear, or because we want to give the people what we think they want," he says. "We have to stop being so wimpy and oppressed, just following the general public - we have to start to lead them."

This is where the next phase of Pallotta's work comes in. He has just sent his publisher the copy for his latest book, which will give details of a new organisation he has set up, the Charity Defence Council, to promote five solutions to the problems set out in Uncharitable.

These include: an advertising campaign to educate the public on subjects such as charity overheads; an anti-defamation league to deal with erroneous and damaging reporting about charities; and the creation of a national civil rights law for charity and social enterprise.

The council, which has an advisory board of heavyweights - including attorneys and directors of major foundations - will focus its work on the US, but Pallotta would like to find partners in other countries, including the UK.

"The non-profit sector has not organised itself around the issues that are fundamental to the sector itself," he says. "We need to start a new conversation and acknowledge that we are not making progress on these massive social problems. So let's get started. Then we'll adjust and tweak.

"But give the sector a chance: stop preventing it from doing any of the things that on any day you give the for-profit sector total freedom to do."

Pallotta has started to apply this thinking to the charities he works with. For example, he was recently contacted by the National Breast Cancer Coalition about rebranding, and his consultancy and the charity decided to set the goal of 2020 for an end to breast cancer.

Pallotta says deadlines should be set for solving more of the problems that charities tackle, because they ignite conversations and force people to talk about whether something can be achieved - and if not, why not.

"It's a synonym for accountability," he says. "Let's make ourselves accountable for something more compelling than 'we will spend the money on what you told us to spend it on'. That's basically what our accountability amounts to now."

CV 

2011: Springboard rebranded as Advertising for Humanity

2003: Founder and president, Springboard

1993: Founder and chief executive, Pallotta Teamworks

1991: Founder and president, the Daniel Pallotta Company, Pallotta & Associates

1984: Special events assistant, Oxfam America

1983: Legislative aide, Massachusetts State Senate

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