Now forget everything you think you know about how nonprofits should work

Dan Pallotta

Call me a gal with a dream. When I think about the trends I’d like to see in the future—what I really want to see changed—well, I want us to change the way we think nonprofits are supposed to work. No biggie…pretty sure we can have it wrapped up by next Friday. Slurp another cuppa coffee or glass of wine. We’ve got plenty of time.

You might wonder why I would choose such a lofty aspiration for us as a community of people doing good. You have your hands full already, right? “Erica” you might say, “you already asked us to stop thinking of ourselves as mission-driven organizations. Now you want us to change how we work?” What I am suggesting is that we eliminate the double standards that Dan Pallotta talks about in his great, recent TED talk:


Dan points out that there is something seriously messed up with the belief system around how nonprofits *should* operate—the belief that overhead is bad, that people have to choose between making money and serving social causes, that risk in the name of growth and innovation are unacceptable. What I’m hoping is that nonprofits are given “permission” to level the playing field with the for-profit sector and that our attention is focused on investing for optimal outcomes.

And by “permission”, I mean lead the charge on shifting this paradigm. So really I don’t mean permission at all—I mean boldly venturing forth. I mean taking the bull by the horns. I mean stopping this antiquated nonsense. It’s time. Really, truly time.



Is overhead hijacking your impact?

Dan Pallotta
Man on a mission to get us over overhead.

Phil Buchanan, President of the Center for Effective Philanthropy, issued a rather scathing review of Dan Pallotta’s new book, Charity Case.

This is the latest in what is an ongoing debate about overhead.

What is overhead anyway? We throw this term around but are we clear on what it means?

According to Wikipedia, the “term overhead is usually used when grouping expenses that are necessary to the continued functioning of the business but cannot be immediately associated with the products or services being offered (e.g., do not directly generate profits)…Overhead expenses include accounting fees, advertisingdepreciation,insuranceinterest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel expenditures, and utilities.”

You can see why donors really want you to make the case for contributing to boring stuff like insurance and supplies. Who wants their donation going to yawners like that?

We can educate donors until we’re blue in the face about why the lights, staples and post-it notes are all necessary parts of meeting our mission. But why not spend that time talking about impact instead of expenses? Tell a story of impact and then connect that impact back to the light switches, hosting fees, and telephones. Not the other way around.

Overhead is important. It’s necessary. We can’t operate without it. But don’t let it hijack your story. 

Your story is about impact. Not your income statement.



“I work for a non profit.”

overhead, Dan Pallotta, Charity Defense Council
Dan Pallotta's ad campaign to get people "over" overhead.

The topic of renaming the non profit sector came up a lot at the Washington State Nonprofit Conference last Friday. That’s because Dan Pallotta, author of Uncharitable and shaker-upper-of-all-things-traditionally-nonprofit, gave the keynote. He’s the guy who pointed out that, in Latin, non profit means “non progress” and that that’s a pretty lame name for a group of people hell bent on making progress on a better world.

While we continue the hunt for a better name for the non profit sector–one that might actually stick so people would actually change behavior and stop saying it–I’ve got a suggestion.

People who work in the for profit space don’t say, “I work for an S-Corp/C-Corp/LLC/etc.” They say, “I work for a bank.” or “I’m in IT project management.” or “I build websites.”

Why do those in the ‘for purpose’ space, as Pencils for Purpose Founder Adam Braun would say, start with, “I work for a nonprofit. We [insert blurb about what you do]”? Why do we feel compelled to preface our answer by clarifying our tax status?

Taking out the tax status reference would be a giant step toward being known for what we do and why we do it, rather than how the IRS refers to us.

That can only be good, right?

Top Three 2010 Nonprofit Must-Reads

2010 has been a mighty good year for books packed with ideas for people wanting to make the world a better place. Below are three of our favorites. They had us nodding our heads, posting snippets on Facebook, and saying things like “Exactly!” and “Right on!”over and over again.

As you cozy up for some autumn reading, we urge you to add these to your stack. And, if you buy them off Amazon today, you’ll get 34% off the list price. Nice! Buy them. Read them. Take notes. Share them. You won’t regret it.

Three 2010 Nonprofit Must-Reads:

1. The Networked Nonprofit: Connecting with Social Media to Drive Change, Beth Kantor and Allison H. Fine

Our Favorite Quote: “Tools will come and go, but strategy sustains organizations.”

2. The Nonprofit Marketing Guide, Kivi Leroux Miller

Our Favorite Quote:  “Focus on the basics first, and do them well.”

3. Uncharitable, Dan Pallotta

Our Favorite Line:  “If we have the courage to be true to our most daring ideas, the ideology will have to surrender to their magnificence and our determination to make them real.”

Are we missing any good ones?  Please share your suggestions below.

Do you communicate as effectively as you think?


Do you communicate as effectively as you think?