This Morning's KQED Interview

I did an hour-long show on NPR San Francisco with Dave Iverson this morning. The show is called "Forum." Dave is a great interviewer and was genuinely into the subject matter. Good call-ins too.  Click here to listen.
Dan Pallotta Uncharitable

No TrackBacks

TrackBack URL:

1 Comment

| Leave a comment

Unfortunately, I listened to the show via podcast, so I could not present comments in a timely fashion.

I agree with the basic premise that nonprofits should be allowed more of a performance-based "profit" incentive.

However, the MAJOR issue that I was disappointed was not asked was regarding market feedback mechanisms. Presumedly in the for-profit sector, a company has a product that is valued or not valued, and a CEO justifies his salary on the basis of the value of his product. If the product stops selling or declines in value, the CEO's salary is no longer justified, and the CEO either takes a salary cut or a golden parachute.

In the nonprofit world, there are two kinds of problems -- the problems that CAN be solved, and the problems that will NEVER be solved. Specific diseases can fall into the former, social inequity falls into the latter. There will always be social inequity, it's largely an issue of what degree of inequity or suffering is tolerable in a civil society.

In the for-profit world, a thriving company will continually improve their product or make an innovative new product, or another company will take their business. On the other hand, the profit motive in the nonprofit world is that the disease or inequity must NEVER be solved, because the "company" will be out of business. You could argue that the incentives must be carefully induced so that "solutions" are the goal, but that's not what you're arguing, or at least, that's not what I heard on KQED. What I heard on KQED is that higher salaries and more cash throughput is the goal, towards the end of more efficient discovery of solutions.

For solvable problems, the goal of a nonprofit should be to put themselves out of business, once the cure is discovered. The goal is not to create ever-higher salaries and job incentives for keeping the disease alive.

For non-solvable problems there are different issues. The goal is to arrive at a socially agreeable balance point, and maintain that balance point in a means that is least expensive to the general public. You may employ high-cost methods to research and find the balance point, but part of the goal is to find the low-cost, low-salary means of maintaining that balance point. The goal is not to maintain the highest salaries or have ever-increasing salaries to maintain a social balance point (regarding inequity that will never be eliminated). Individuals employed in those sectors have to see their jobs as stepping-stones to something else, not as a career where their salary will continually rise.

Leave a comment