Let Charities Change the World

It’s time we let charities reach the same scale as McDonald’s and Nintendo.

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Nonprofits are also held back by a public aversion to charities spending money on advertising and marketing; an inability to attract venture capital which is starving nonprofits of investment and hurting growth; an obsession over reducing "overhead" often to unsustainable levels; and a lack of patience while charities make investments in long-term goals. Pallotta points out that Amazon took six years to return a profit to investors while it built market dominance; if a nonprofit did something similar, "we'd expect a crucifixion."

No wonder Pallotta's talk has already been viewed by over a million people. He's right that we need a more entrepreneurial approach to nonprofits.

[See a collection of political cartoons on the budget and deficit.]

Some will disagree with his views about higher overhead for charities because he doesn't acknowledge that there are crooked fundraisers in the world. Sure, criminal law takes care of embezzlers, but what about the ones who stay below the line and throw lavish fundraisers in the name of charity? Relaxing our attitudes about overhead may give a green light to the good people leading organizations that need to invest in growth, but it may also give a green light to those looking to live the good life on someone else's donation to charity.

We live in a time of big government, big media, big corporations and big banks. Why not big nonprofits? It's time we let hunger charities and medical research organizations and homeless groups reach the same scale as McDonald's and Nintendo. We know that good nonprofits can change lives and change the world better and faster than the government can. It's time to give them the space to do so. Government can't do it all, and we don't want it to.

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