Uncharitable: How Restraints on Nonprofits Undermine Their Potential

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Pallotta TUFTS UNCHARITABLE HOW RESTRAINTS ON NONPROFITS UNDERMINE THEIR POTENTIAL DAN PALLOTTA “Dan Pallotta has written the clearest and most articulate critique I have read of the system of values that our charities and other nonprofit organizations are supposed to follow. He explains in graphic detail how these values undercut what charities are trying to do and prevent them from accomplishing all that they might.Not everyone may agree with his position,but the nonprofit world will surely benefit from a vigorous discussion of his arguments .” —Derek Bok,Former President of Harvard University “This is nothing less than a revolutionary work.” —Gary Hart,former United States Senator,and Scholar in Residence,University of Colorado “Dan Pallotta has elevated the questions we need to be asking.His book provocatively challenges traditional views of how charities should operate and provides a thought-provoking alternative.” —Dr.David Ho,Time Magazine Man of theYear,1997, and Director, Aaron DiamondAIDS Research Center “Uncharitable poses a bold challenge to the orthodoxy that drives American non-profit business practice....If this is heresy,we need more of it.” —Raymond C.Offenheiser,President,OxfamAmerica “Dan Pallotta voices what nonprofits don’t dare mention, for fear of losing their donor support. . . . Pallotta’s testy and spirited review of the public’s weird misconceptions about how nonprofits ought to run should be required reading for all nonprofits,board members, donors and foundations.” —Renée Irvin,Ph.D., Associate Professor and Director,Graduate Certificate in Nonprofit Management Program,University of Oregon “For the first time someone has codified all of the irrational ways we have forced charities to operate.The picture that emerges tells us we have everything backwards....Dan has put the pieces together in a way no one has before him, and proposes a breathtaking path to change that has never before been articulated.” —Peter Diamandis,M.D.,Chairman and Founder,X PRIZE Foundation Civil Society:Historical and Contemporary Perspectives TUFTS UNIVERSITY PRESS Medford,Massachusetts Co-sponsored by Jonathan M.Tisch College of Citizenship and Public Service Published by University Press of New England Hanover and London www.upne.com “Uncharitable is the most courageous and necessary of all of the recent books that have been written about philanthropy and the nonprofit sector.” —Bill Shore, Founder & Executive Director, Share Our Strength A courageous call to free charity from its ideological and economic constraints Uncharitable goes where no other book on the nonprofit sector has dared to tread. Where other texts suggest ways to optimize performance inside the existing paradigm, Uncharitable suggests that the paradigm itself is the problem and calls into question our fundamental canons about charity. Author Dan Pallotta argues that society’s nonprofit ethic acts as a strict regulatory mechanism on the natural economic law. It creates an economic apartheid that denies the nonprofit sector critical tools and permissions that the for-profit sector is allowed to use without restraint (e.g., no risk-reward incentives, no profit, counterproductive limits on compensation , and moral objections to the use of donated dollars for anything other than program expenditures). These double-standards place the nonprofit sector at extreme disadvantage to the forprofit sector on every level.While the forprofit sector is permitted to use all the tools of capitalism to advance the sale of consumer goods, the nonprofit sector is prohibited from using any of them to fight hunger or disease. Capitalism is blamed for creating the inequities in our society, but charity is prohibited from using the tools of capitalism to rectify them. Ironically, this is all done in the name of charity , but it is a charity whose principal benefit flows to the for-profit sector and one that denies the nonprofit sector the tools and incentives that have built virtually everything of value in society.The very ethic we have cherished as the hallmark of our compassion is in fact what undermines it. This irrational system, Pallotta explains, has its roots in 400-year-old Puritan ethics that banished self-interest from the realm of charity . The ideology is policed today by watchdog agencies and the use of“efficiency” measures, which Pallotta argues are flawed, unjust, and should be abandoned. By declaring our independence from these obsolete ideas, Pallotta theorizes, we can dramatically accelerate progress on the most urgent social issues of our time. Pallotta has written an important, provocative, timely, and accessible book—a manifesto about equal economic rights for charity. Its greatest contribution may be to awaken society to the fact that they were...