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Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Civil Society: Historical and Contemporary Perspectives)

by Dan Pallotta

ISBN-10: 9781584657231
ISBN-10: 1-58465-723-5
ISBN-13: 9781584657231
ISBN-13: 978-1-58465-723-1
Hardcover
2008-12-01
Tufts


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Editorials


Product Description
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 for profit sector on every level. While the for profit 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 so unequal in the first place.

Reviews


valuable challenge to the status quo
Excellent ideas, straight-forward read. Having worked in for-profit and not-for-profit organizations, I agree with the author's call for a radical rethinking of the social sector. I think his arguments are dead on.

Fails to address the obvious
This book reads like one long screed....one long series of complaints about how society treats nonprofits: Nonprofits "should" be able to compensate their employees just like profit making companies [They can, of course, it's just dangerous to their image]. Nonprofits "should" be able to advertise [Again, they can, it just may not "sit" right with some contributors]. Nonprofits "should" be able to invest in capacity building. And, most controversially, nonprofits "should" be able to take investments, make profits, and return those profits to investors.

Pallotta fails to address the "elephant in the room" and the more interesting questions. First, if "nonprofits" behave as he recommends, what is it that separates them from other profit-making institutions? Why should any organization that intends that model constrain itself by organizing as a nonprofit? This could be an interesting discussion, but it is entirely ignored. Second, why should any organization that takes investor money, intends to make profits to enable it to pay the investors a return on their investments (as Pallotta recommends), why should any such organization be tax free? Again, this could be an intersting discussion but it's entirely ignored.

I fear this book reads to me just as sour grapes....Pallotta had a profitable company that lost its business since its customers were pressured not do engage in the activities the company provided (marketing, fundraising). The book does little more than list out all the reasons why this "should" be ok. I agree. But now what.

Where Boards Need to Focus
Dan makes a cogent case for why non profits generally fail in their missions and what can change that--starting with a negative concept of why we have non profits to how we underfund their infrastructure. This book should be required reading for every Board member and especially every foundation leader. Robert B. Sharp, Founder/President RBSCo.

An answer to those frustrated with government and traditional charity
"Uncharitable" is a significant contribution to social welfare policy, particularly for those of us who know how inept the government can be at efficiently helping the disadvantaged (see healthcare reform), but also acknowledge how traditional charity lacks the tools for bringing about major change. My only gripe is that Pallotta's anti-religion overtones were misplaced. Perhaps because I studied philosophy I paid more attention to this part of the book than I should've, but his views about how all charity really is self-interested reveal an understanding of philosophy and theology that seriously trails his business acumen. I can desire more robust social enterprise without adopting the pseudo-morality of Ayn Rand. The book probably would've been half as long and just as useful if he'd kept his preachiness to a minimum.

Putting that aside, I hope that Pallotta's pragmatic ideas will reverberate up to the policy-making level, so that we can see the marriage of capitalism and non-profits produce serious results. Any system for alleviating suffering, Pallotta's included, will rely on caring, loving people motivated by something other than their own self-interest. But that doesn't mean that we should completely exclude the tools of capitalism, when it will clearly magnify the amount of suffering that we are able to reduce. That is, after all, the goal.

A must read for givers
This book has opened my eyes to new ways of thinking about charity and what needs to be done to make it more effective. This is a must read for anyone giving to charity or churches and for anyone involved in charitable work.


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