Over Overhead

A reporter was interviewing me yesterday and asked me to name some charities I think are doing a lot of good and some that are wasting people's money; i.e. "paying these honchos big salaries" when the money is supposed to be going to the needy. There again the zero-sum game rears its head, where money spent on a CEO is necessarily seen as money taken away from the cause, instead of being properly seen as money invested to bring more money to the cause - and this without even knowing if the "honchos" are or are not bringing in a lot more money. And what is a "honcho" anyway, and why do we start from that premise? I responded to him that there was a 2008 NYU study, done by Paul C. Light, that found 70% of respondents think charities waste a great deal or a fair amount of money. But there have been no studies done that show that charities actually do waste money. 

On the contrary, I think charities deserve enormous credit - way more than they get - for the amazing things they do with the limited resources they have and the huge constraints they're under. The prevailing cultural prejudice that they waste money comes from this incessant focus on "overhead," without the public really even knowing what overhead is or isn't; what value it has or does not have. It's like the preverbial idea of what happens when I tell you not to think of a polka-dotted elephant. When all anyone asks about is overhead, and when all anyone talks about is overhead, what image do we think the public is going to come away with with respect to charity? Overhead. And thus this unsubstantiated notion that charities waste a lot of money. This is yet another reason that the overhead measure has to go. Overhead has become the be-all and end-all measurement of charity, when in fact, the word has no meaning, and the measurement of it, even if it did, has nothing to do with results. Smart people, from Steven Smallwood to Richard Steinberg to the U.S. Supreme Court have recognized this and been saying it since the seventies. It's time we all caught up to them. 
Dan Pallotta Uncharitable

No TrackBacks

TrackBack URL:

Leave a comment