Originally posted on TED Blog:
In 1994, Dan Pallotta created the AIDS Rides — a series of long-distance fundraising cycling journeys that netted $108 million for HIV/AIDS research and services within the space of eight years. Later, his Breast Cancer 3-Day walks netted $194 million in an even shorter period of time. Both had their best years ever in 2002. But then, after a spate of bad press criticizing the management of the organization, both were shuttered.
[ted_talkteaser id=1688]“350 employees lost their jobs because they were labeled overhead,” says Palotta in today’s talk, given at TED2013. “This is what happens when we confuse morality with frugality.”
This wasn’t just a problem for the newly unemployed or Pallotta’s wounded sense of pride. As he explains in this talk, the real issue is that everything we have been taught to think about charity is wrong. In particular, the single yardstick generally used to measure the worthiness of a charity – how much money goes directly toward the people it seeks to help and how much is used to cover overhead — is dangerously unhelpful. According to this thinking, the “best” charities are the ones with the lowest overhead. In fact, that focus may actually be preventing charities from making a real impact.