HN Theater @HNTheaterMonth

This is not really true. Charity Navigator incentivize that charities operate on a shoestring which is not very effective: https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

⬐ googlryas

I haven't watched the video (yet), but for example wikipedia has a stellar near-perfect rating, but still devote 15%/$12M of their budget to salaries which surely could be cut drastically if they wanted to really be on a shoestring.

In some ways Charity Navigator is like the BBB, and people need to take those ratings with a grain of salt.

What is not said here, but I think it was started this article there was a break-down on Twitter [2] recently where someone broke down the grants Wikimedia Foundation gives to other charities, A lot of Wikimedia has become advocacy for social issues not the spread of free information. Some of those Social issues many of the donors to Wikimedia may not agree with, and it being redistributed to some pretty controversial organizations. People donating to Wikimedia thinking they are advancing Wikipedia but in reality the bulk of the foundation spending is issuing grants to other charities.

>>Meanwhile eg the American Cancer Society gets 73/100 and spends more on fundraising than WMF's entire budget

I am reminded of this TED talk[1] from several years ago that talks about fundraising and charity

[1] https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

[2] https://threadreaderapp.com/thread/1579778161889652736.html

⬐ bawolff

> What is not said here, but I think it was started this article there was a break-down on Twitter [2] recently where someone broke down the grants Wikimedia Foundation gives to other charities, A lot of Wikimedia has become advocacy for social issues not the spread of free information

I dont like the knowledge equity grants either, but it was still a tiny portion of Wikimedia foundation's budget. Describing it as "a lot" is outright misleading.

⬐ navaati

Hey, what is "the BBB" here ?

⬐ loloquwowndueo

Better business bureau

https://en.m.wikipedia.org/wiki/Better_Business_Bureau

⬐ None

None

⬐ jeremyjh

Better Business Bureau

⬐ phpisthebest

BBB == Better Business Bureau a private organization in the US that "rates" business based on certain factors and customer complaints. It is often confused with having some kind of governmental authority, approval, or validity when in reality they just a non-profit trade organization.

Very similar to charity navigator but rating for-profit businesses

⬐ bombcar

And it can become a bit of a scam where if you’re a “paying member” of the BBB you can “respond” to complaints and they disappear.

⬐ greyhair

After fighting with Ford over a recall issue for over a year, I opened a claim with the BBB. Two months later they closed it with a note that Ford explained that my car had been determined to be outside the claim (even though it experienced the recall related failure). Four months later, Ford issued be a check for the full cost of the repair, with an apology note. Even though at that point, I had given up.

I have to believe that the BBB claim had some effect on that. The BBB may have accepted Ford's word, and closed the claim, but it resulted in some messaging up the consumer complaint chain.

⬐ stjohnswarts

Ford and most corps have a deny-deny-deny culpability policy until the complaint hits someone who can make a decision on the matter (they actually have queues/emails). There is a hard money limit for the peons to be able to admit that it's the company's fault, above that amount it is a blanket deny and delay policy. We had a recent President who also lived by the same policies; lawyers have ingrained into the DNA of business.

⬐ bombcar

Yeah it can work sometimes, especially if you get into the “marketing” budget of someone big - they often have some leeway.

⬐ phpisthebest

That is one of things people do not understand why "Twitter" Customer service is different than regular customer service

Twitter "Customer Service" is marketing budget

⬐ commandlinefan

> for social issues not the spread of free information

In most cases, openly opposed to the spread of free information.

⬐ KennyBlanken

That twitter thread is garbage start to finish. It starts with 'wikipedia started out in a basement on a shoestring, so clearly all the millions spent two decades later is being pissed into the wind', which is absurd.

...then attacks SERCH claiming they've done nothing but release 'youtube videos with 50 views', attacks them for not having produced any within the last year (maybe their grant ended?) when if one google "SERCH foundation" they'd quickly see "Our signature program is Vanguard: Conversations with Women of Color in STEM, an online platform and monthly web series focused on women of color in STEM." and further:

> WHAT WE DO

> Produce a live web-series with timely and relevant content

> Celebrate women of color with weekly #WCWinSTEM features

> Publish original content written by and for women of color in STEM

> Foster support and networking via our online platform

> Convene as a community virtually and at in-person events

> Advocate for ourselves + our STEM interests

....and then the big bad boogeymonster really blows its dog whistle when the author associates a foundation distributing grants to journalists who are people of color with "bankrolling the inescapable American culture war." You hear that sound? That's the sound of my eyes rolling, hard. Grants to people of color who work in journalism is furthering a "American culture war." Gosh, those pesky people of color, spreading their "culture war."

The author of the thread then mentions Guy Macon, who, from a quick google, appears to be a transphobic bigot and a troll who made a point of purposefully misgendering a trans wikipedian just to get a rise out of them, and then made a huge scene when he wasn't allowed to erase history and pretend the whole thing didn't happen, and demanded that the person unblock him. Good lord, what a fucking child. https://www.reddit.com/r/RealWikiInAction/comments/rv9x94/gu...

https://wikipediocracy.com/forum/viewtopic.php?p=292896

....and then it ends somehow vaguely tying wikipedia to an experiment involving octopii hatchlings getting killed, or something.

It's a gish-gallop mess, and what a giant surprise it was to find that the author has a long, rambling thread about police killings in the UK that seems to say "that, really, if those black people just stopped committing crimes, they wouldn't get arrested and shot and stuff": https://threadreaderapp.com/thread/1574101120347168770.html

...and their response to "uh, who exactly is this person" is to troll people by giving them the name of an anime: https://pbs.twimg.com/media/FeKtlilX0AAqnKA?format=png&name=...

⬐ shkkmo

Yet the point overall of that twitter thread seems valid to me.

If widipedia is asking me to donate to support it, but most of the money isn't going to support wikipedia, then that is a bit deceptive. It's especially deceptive when that money isn't just going to the wikimedia foundation's other projects, but as grants to a variety of other organizations that have very different missions.

I think much of the criticism of SeRCH is valid. Their "signature program" hasn't released a video in over 5 years and none ever got over a thousand views. The unclearly related "Vanguard Stem" (I think it is a parent or partner organization) hasn't put out video in over a year. To be clear, a quick google isn't enough to write this organization off, but it did fail to find any information that made SeRCH seem like a legit organization to fund.

⬐ ChrisMarshallNY

> Guy Macon

I have no idea about the other stuff, but I knew the name from The Insult File: https://micans.org/stijn/haphazard/flame.txt

I think he's since removed it from his personal site, but there's plenty of copies, floating around.

⬐ origin_path

The problem with the highlighted organizations is not (only) that they are irrelevant to Wikipedia's mission and the intent of the funders, it's that they don't seem to be doing anything which raises the question of why this specific group is being given free money. The answer can well be corruption or nepotism. Whatever it is, it doesn't look good.

⬐ phpisthebest

>>>really blows its dog whistle

if you want to know where you lost me, this is where....

Anyone talking about "dog whistle" gets an instant ignore from me.

At the end of the day, my problem with wikimedia is the same problem I have with United Way, and other such "charities". I do not support charities of charities. I want to give directly to a cause I support, The fact that wikimedia is soliciting donations for one thing, then using that money for another is very misleading and IMO unethical, People do not donate to Wikipedia to support SERCH or any of the other organizations, they do so to support wikipedia, that is where the money should be spent.

⬐ denton-scratch

> Anyone talking about "dog whistle" gets an instant ignore from me.

I take it you think a "dog-whistle" is something the left criticizes the right for doing; and I suppose you are of the right. In fact a dog-whistle could be uttered by a politician of any colour; it's simply a message that is more likely to be heard by one particular political group than others.

There are evidently what you might call "anti-dog-whistles": messages that are not likely to be heard by some group. Apparently you belong to the group that can't hear messages containing the term "dog-whistle".

⬐ phpisthebest

No, "dog-whistle" has become the same thing as "conspiracy theorist" but for the charge of racism. It is fraught with overuse to the point of dilution and misuse.

In the same way that anyone that dared suggest that COVID could have been a lab leak before "authority" validated the possibility was marked as being a "conspiracy theorist", anyone that dare challenge the current trends in the arena of ESG, DEI, CRT, and anti-racism must clearly be a racist, and "dog-whistle" to their racist friends because no one could possibly object to these things for any other reason.

In this usage of the term dog-whistle it is likely a Left political cause, however that this not my opposition to the use. dog-whistle is often used in an effort to side-step having to confront the actual issue, and instead lay a charge upon the individual instead of the idea being presented. It is almost like saying "when did you stop beating your wife", any response to the charge will be seen as an admission of guilt.

⬐ the_only_law

> Anyone talking about "dog whistle" gets an instant ignore from me.

Yet you continue to engage

⬐ weberer

>In the videos they discuss issues in science like objectivity (they're against it) and bias (they're in favour).

Its a shame so much money is being funneled to these groups since that's exactly the opposite goal of most donators to Wikipedia.

⬐ KennyBlanken

I'm going to go out on a limb and guess that you didn't verify, even slightly, anything that tweet-thread author said.

Either that, or like the author, you agree with their claim that grant money going to journalists who are people of color is 'furthering the inescapable American culture war.'

Jeez, how dare those black people engage in journalism that isn't about white culture. They're declaring war on American (white) culture!" /s

⬐ akolbe

I agree, in part. That Twitter thread starts of really well but jumps the shark right towards the end.

⬐ phpisthebest

Only if you read it in the most uncharitable way, and ignore the very real aspects of the "Culture War" around things like CRT, Anti-Racism, DEI, ESG, etc that have very real political and partisan aspects to them. Often intersecting with the very concept of what role government should play in people's life, what authority government should have, and how government should regulate both behavior and economies

⬐ akolbe

I am uncomfortable with the video stills at the end that do seem to be picking on black people. Maybe I am doing the Twitter user an injustice, but there were four other grant recipients they could have been picking on as well:

https://meta.wikimedia.org/wiki/Knowledge_Equity_Fund#Grant_...

This said, I agree with the premise that the Wikimedia Foundation is partisan. Its General Counsel came from the Tides Foundation, which is as partisan as any of its equivalents on the right, and its Chief Advancement Officer, responsible for fundraising and strategic partnerships, had a long career in political philanthropy before joining Wikimedia:

https://sfgov.org/civilservice/sites/default/files/Documents...

https://www.sfweekly.com/news/greening-the-left/

https://www.sfgate.com/politics/article/COMMUNITY-Growing-ch...

⬐ origin_path

The videos are what they are claimed to be. The last one features the black lady talking about how get experiments killed octopuses (weird!). You sound like you didn't watch them and are just reacting to the fact that black women are being criticized?

⬐ LudwigNagasena

> I am uncomfortable with the video stills at the end that do seem to be picking on black people.

Ugh, what?

This TED talk on the subject of how we value charities is worth watching:

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

While I don't necessarily agree with everything he says, I think the primary point that we should value charities by their overall community impact, not just by their ratio of program expenditures to overhead, is absolutely correct.

There is a famous Ted Talk arguing that non profits should pay competitive salaries with the market to get the best employees.

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

And here is an article about the same thing for those who want to skim through it.

https://www.idealist.org/en/careers/rethinking-salaries-and-...

⬐ monadic2

As if non profits are limited by talent and not capital.

⬐ scarface74

How much more capital could they get if they had really talented fundraisers? Both for profit and non profit companies have the same goals - to make money. What they do with their money is different. Could Mozilla save money and be just as effective if they got a bunch of a boot camp grads?

I hold the position represented by Dan Palotta in this Ted Talk: https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

There is nothing distasteful about non-profit CEOs wanting high pay. We're speaking about the founder of something that has and is helping millions of people around the world with arguably one of the most difficult and important educational needs. Khan Academy wouldn't be here without Khan himself and the world would be lesser for it. I see absolutely no reason why the CEO of such an organizations shouldn't paid in the same manner as for-profits.

I'm snarky, because the implied notion of "people doing good instead of chasing profits don't deserve the same pay/good life" is nothing short of crazy to me.

⬐ dirtydroog

There is something distasteful about them wanting high pay and extra donations to cover an unseen expense.

⬐ lern_too_spel

$800k is an experienced engineer's salary where Khan Academy is based.

⬐ dirtydroog

Lol, what

⬐ lern_too_spel

Khan Academy is based in Mountain View. There are plenty of engineers getting that annual compensation at Facebook/Google/Netflix.

⬐ kharak

And you know already that Khan is going to take the same salary this year? This is just rationalization, be honest with yourself, you simply dislike the idea of Khan getting this much for himself, no matter what.

I think the question is - would you have donated, to any cause, without your Uncle?

I'm not asking to be combative - it's a legitimate question millions have to ask themselves. My friends and I participated in the ice-bucket challenge. We would not have done what we did w/o such a ridiculous, yet fun, method of virality.

To me, it is about 'effective' money. With your uncle + the organization, was the money more effective with or without?

There is an interesting TED talk from 2013 that highlights a semi-counterintuitive problem - if you can't pay top dollar, you can't get top dollar talent except in extremely narrow cases[0].

My interpretation is, we would love 100% of our charitable donations to reach the village who needs water or a toilet, but the reality is, people who run the org need to get paid as well.

Measuring a charity by how stingy it is might actually be less effective overall.

Anecdote: Bill and Melinda Gates foundation absolutely pays top dollar (of charities) to gain some of the smartest former execs in the industry. They're wildly effective.

[0] https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

⬐ fooblat

I certainly would not have known about this particular charity without my uncle. However, had he told me it was an important cause to him and simply asked me to join him in donating, I would have.

I guess another question is whether my uncle would have made that effort without the marathon.

Non-profits can draw large salaries:

https://www.erieri.com/blog/post/top-10-highest-paid-ceos-at...

These are all medical, so that is the right comparison, but charities can also have high salaries:

https://www.charitywatch.org/top-charity-salaries

And, I am not taking a position here, but if you feel strongly that this should not be the case, there is this video for the counter-argument:

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

⬐ pseingatl

Such as the Susan Kamen Foundation. Huge salaries, no funding of research, events to promote "awareness." A scam.

I mostly agree with you, but I wouldn't entirely blame nonprofits. There's a lot of public pressure on nonprofits to reduce costs as much as possible because everyone is obsessed with "overhead". This TED talk explains the problems with this situation really well:

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

Choice quote: "so in the for-profit sector, the more value you produce the more money you can make, but we don't like non-profits to use money to incentive people to produce more in social service. We have a visceral reaction to the idea that anyone would make much money helping other people; interesting that we don't have a visceral reaction to the notion that people would make a lot of money not helping other people."

⬐ taphangum

"Interesting that we don't have a visceral reaction to the notion that people would make a lot of money not helping other people."

If for-profits didn't help people, they literally would not exist.

⬐ NickM

I think you're misinterpreting what he's saying (which might be my fault for expecting the quote to make sense outside the context of the talk). The quote is referring to the fact that we frown on people making money from running charitable organizations that help people, but making money from running a for-profit business that helps nobody is considered fine and admirable.

⬐ tvanantwerp

Strongly agree. The external pressure from well-meaning but uninformed donors to "cut costs" isn't helping the situation.

For you - https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

Cites?

I mean, at heart this is easy to agree with. We all want to think that there is waste. And there probably is a ton of it. The problem I have is the cost of fighting some waste is more expensive than it is worth. I realize this is about charity, but https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou... is one of the few TED talks I actually still like. I'd be very interested in seeing rebuttals.

There is also the argument that corruption follows money. And that is certainly true. Doesn't do a lot to help the many people in underfunded locations of our nation.

I think this is a healthy and needed swing towards holding charities accountable for what they actually do. Sure I do feel a little bad for the Red Cross but come on.

We also need to take care on looking too much at a nonprofit's overhead spending. This is a great TED talk on that subject and will really make you think about the whole sector. https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

EDIT - Oops just noticed iamapipebomb had linked to this too.

It'd be nice if there were also a metric for number of lives improved. Like meals consumed, beds slept in, etc

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

We don't charge any management fees, you can donate through EA funds, and we'll pass on 100% of the money we receive to the charities.

We don't consider a charities' overhead when evaluating effectiveness, in the same way that you don't consider how much Tim Cook gets paid when you decide whether to buy an iPhone. Historically, groups like Charity Navigator have looked at overhead ratios for one simple reason - they're much easier to measure. Unfortunately, overhead ratios are simply not a useful measure for evaluating charity effectiveness, and they are easily gamed by unscrupulous charities trying to raise funding. Instead, we look at the total costs a charity incurs, and add in any costs that they don't include in their budget, but are necessary to deliver their program. Then we look at the outcomes the charity achieves for that funding as a whole. I'd check out Dan Pallotta's TED talk if you want to know more the overhead myth. https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

Dan Pallotta's Ted Talk on charity - "The Way We Think About Charity is Dead Wrong"

https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

Wildly changed my worldview with regard to charities.

I actually think it's a good thing for charities to spend more on fundraising than they do - it's a harmful metric to judge them by. Here's a discussion of that: https://www.ted.com/talks/dan_pallotta_the_way_we_think_abou...

However, IIRC all the fundraising and admin costs are covered by separate donors so that any additional donations go to nets. AMF doesn't have much of a fundraising operation as it gets its funding through GiveWell and Good Ventures primarily.

⬐ DrScump

  it's a good thing for charities to spend more on fundraising than they do

Well, sure, if a little money spent fundraising yields far more in donations and/or broadens your audience to your cause.

What raises concern for me is when the percentage of receipts spent on fundraising is disproportionately high and/or spent on overpaid insider salaries.

There's nothing wrong on making money even in this space: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

⬐ nipponese

Maybe it's just scruples or a mis-understanding of charities, but earning financial gain in the name of altruism seems morally bankrupt.

Related TED Talk: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

It's amazing to me that you would accuse DFW of myopia and hypocrisy when your argument here is, well, hypocritically myopic (not to mention one might say that DFW's overarching thesis in all of his work was encouraging his readers to be less myopic e.g. [1][2])

To tackle a problem like world hunger and homelessness takes an incredible amount of effort across a huge number of domains by an enormous amount of people. DFW was obviously not someone best suited to go e.g. repair "pissing corners and walls", and we should not expect him to be. Instead, he did many things to inspire many people to lead more altruistic and less self-centered lives. This was his talent, and it's probably done more good for the world than any amount manual labor he could have done in his lifetime. Ignoring this aspect of helping the afflicted is the same strain of myopia that thinks charities should give 100% of their fundraising to researchers/etc, as if raising awareness and paying competitive salaries were not the lifeblood of said charities[3].

I'll leave your rant about how "power giants stealing money have never helped the poor" alone, as your rhetoric and ignorance of evidence to the contrary clearly imply you're not about to have a rational discussion about it.

[1] http://web.ics.purdue.edu/~drkelly/DFWKenyonAddress2005.pdf

[2] http://observer.com/1997/10/john-updike-champion-literary-ph...

[3] http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

Well, this does sidestep the argument of whether certain forms of philanthropy should be encouraged over others. I do think this is more of a cultural problem than otherwise.

I'm not overly fond of TED talks nowdays, but this one still sticks out as awesome. http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

Basically, I think the argument is more that we might be better off if philanthropy was viewed as just another form of consumption.

⬐ bicubic

I agree with the sentiment, but at the same time I think some widely metric for a nonprofit's efficiency must exist. Overheads is not a suitable metric, but neither is the 'size of their dreams' which is basically what he's advocating.

I want to know that my donation is being used to further the cause as effectively as possible. Find a way to communicate that to me, and I will donate regardless of overheads.

Reminds me of this: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

College presidents act as a face of an institution, paying someone extra 100,000 could mean bringing in millions extra in donations/tuitions/fees etc. Big money attracts talent.

That's not usually the best way to think about charity overhead. Check out this TED talk: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

Also relevant: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

This is a great move for YC. They've never been about making ludicrous amounts of money which is one reason they've been able to be so successful. I loved that they funded Watsi and agree wholeheartedly that non-profits can benefit from YC/startup advice in general.

As a side note, I think that we've as a culture have been approaching non-profits entirely wrong [0]. Instead of letting them build structure to actually maximise the help they can give, we require them to be stripped-down organizations so their metrics can show they're giving as much money away as possible. This is why we've seen such a surge in for-profit-but-that's-not-the-main-point companies like Tom's Shoes lately. It's simply the best way to do the most good.

[0] http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

⬐ icebraining

He was also in an hour-long episode of Econtalk: http://www.econtalk.org/archives/2013/06/pallotta_on_cha.htm...

⬐ notahacker

With donor funded nonprofits the "product" is fulfilling the donors' wish to see money spent on X, so the litmus test for spending the money for donor-funded organizations should be if donors knew we were spending on this, would they change their mind about the donation. Rational, reasonable people won't mind some of their donation being spent soliciting further donations, but they will mind nearly all the money being spent on fundraising activity, to the point where it's essentially a marketing matrix giving little more than an "image rights" fee to the good causes.

Profit making companies like Tom's Shoes that see philanthropy as a core brand value, are a different matter. There's room for more of them irrespective of how the charitable sector organizes itself.

⬐ dragonwriter

> With donor funded nonprofits the "product" is fulfilling the donors' wish to see money spent on X

I disagree. With donor funded nonprofits, the product can be to fulfill the donors wish to see their money achieving outcome X, not seeing their money spent on outcome X (it can also be as you present; different donors have different motives.)

I don't think that necessary challenges your conclusions, but I think it is an important distinction.

There was a great TED talk a while back about this. [1]

People talk about nonprofits being "irresponsible" when they behave like for-profit corporations: advertising, perks for engineers, whatever. And yet the for-profits do these things because they work; advertising gets sales, perks get you better engineers (and it's usually cheaper than just bumping up salaries, because macbooks are shiny). If these things don't work successful corporations will stop doing them, and if they DO work we should stop giving nonprofits shit for doing them too.

That said, your point about Mozilla in particular coming crumbling down is interesting--I'm not sure I disagree. However, if they need smart people to pull them out of the hole, offering free macbooks isn't a bad way to do it.

[1] http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

I would be interested in your take on Dan Pallota's perspective (below, several times); he seems to have a lot of exposure with his claim that nonprofit isn't working as well as it could, primarily because of the focus on "overhead".

--

Dan Pallotta: The way we think about charity is dead wrong

http://www.ted.com/talks/dan_pallotta_the_way_we_think_about... (20 min video)

  > nonprofits [...] are rewarded for how little they spend 
  > -- not for what they get done

Pallotta on Charity and the Culture of the Non-Profit Sector

http://www.econtalk.org/archives/_featuring/dan_pallotta/ (1 hr EconTalk podcast)

  > The use of overhead as a measure of effectiveness makes it difficult for 
  > charities to attract the best talent, advertise, and invest for the future

Uncharitable: How Restraints on Nonprofits Undermine Their Potential

http://amzn.com/B003BLY740 ($15 340 pg. Kindle book)

  > double-standards place the nonprofit sector at extreme disadvantage to
  > the for profit sector on every level

⬐ glaugh

There's been some rejoicing in my nonprofit nerd circles about a recent acknowledgement by a few important nonprofit rating orgs that overhead is a bad measure of effectiveness: http://www.guidestar.org/rxa/news/news-releases/2013/2013-06...

⬐ dnautics

it's not universally bad, it's just important to acknowledge corner cases. It's important to remember that a 'high overhead' though, does correlate to bad performance.

⬐ j_s

  > It's important to remember that a 'high overhead' though,
  > does correlate to bad performance.

Dan Pallota's entire point is that this line of thinking is wrong.

⬐ dnautics

I don't think either of us have real statistics on this. I do know within certain nonprofit (mostly research, but not exculsively) organizations I've been in/worked with, increasing overhead has correlated with my personal dissatisfaction. The place where I volunteer, for example, spent a lot of money on a posh warehouse to prepare food, which was very different from the church that it operated out of - meals then were only delivered MWF instead of daily, and the client base shrunk, there may be a bit of mission creep too (but I'm not quitting volunteering for them quite yet). When I lived in DC, I was dismayed at that location's "parallel" (i.e. does the same thing, but unrelated) organization for similar reasons, except it had gone down the other side and was no longer delivering hot meals even, so I chose a different place to volunteer.

In the sciences, high overhead (as charged on top of grants given by taxpayer-funded organizations such as NIH, NSF, DOE) inevitably means questionably high payouts to the executive-level presidents, and what not. Now that I know how to read 990s, I am looking through the history of a particular nonprofit science research org; 10 years ago it was entirely run off of its endowment and had a promise to the researchers of independence from the tyrrany of grants. Over the course of the decade, the active scientist corpus has shrunk by 3/4, the president gets paid 3x more, the endowment is < 20% of what it used to be, and PIs are being pushed to apply for soft money, and they are negotiating overheads of 60% or more.

Then there are spectacularly bad organizations such as the Harlem Boy's Choir, which I have no personal experience with, but certainly serve as cautionary tales.

⬐ jseliger

I heard the Econtalk, and he's correct. The problem is that a relatively small number of nonprofits will abuse overhead, which is how you end up with the perennial exposé of some nonprofit where the senior managers drive Ferraris and expense $500 lunches, and then everyone thinks administrative costs get a bad name and wants to restrict them; this is similar to the "every check has a cost" idea Paul Graham writes about here: http://www.paulgraham.com/artistsship.html. Since charities' real clients are funders, charities artificially hold back "administrative" costs, at the cost of effectiveness. Often some form of creative accounting gets used.

In addition, it's prestigious / sexy to see a staff person handing food over to someone, or providing an ear exam to a kid, or whatever. It's not sexy to get a functional CRM or logistics manager or whatever.

   > building itself less like a university and more like a for-profit corporation

This concept was discussed recently on the EconTalk podcast http://www.econtalk.org/archives/2013/06/pallotta_on_cha.htm...

"The way we think about charity is dead wrong" http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

Uncharitable: How Restraints on Nonprofits Undermine Their Potential http://www.amazon.com/dp/1584659556/

⬐ nijk

Palotta is just providing cover for the parasitic fundraising class.

He has zero connection to actual work in the field of charity accountability and measuring effectiveness. Contrast against GiveDirectly, Against Malaria Foundation, GiveWell, and J-PAL.

⬐ joonix

Charity is very profitable for many elites especially in places like NYC and DC. Just because they don't distribute dividends doesn't mean they don't distribute salaries. Most "connected" people here come out of school and get hired by their friends at non-profits. They sit around, raise money, and don't do much with it other than pay themselves.

⬐ rossjudson

Sadly, I have seen this myself. Expensive "gifts" for doing odd jobs for charities (that far exceed the value of the task), first-class travel plans and ludicrously expensive hotels...it's sad, really.

Of course this was a while ago. I don't know if the tax laws have changed to make these sorts of things more difficult to do.

What matters is how much money is eventually spent for the cause. See http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

This will seem a bit OT, but it is relevant: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

I'm bothered that we as a society have trouble recognizing the point and purpose of overhead.

Your writing made me think a lot about the crazies/true innovators, and I agree with how you see those people adding value to our world. But I also think that there are not enough people who seek to shift paradigms, not just through the products and services that exist in them, but through inviting everyone into a discourse of change. I'd be curious to hear from you how (and if) this TED Talk relates to your writing:

http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

Cheers

I can't help but think some of this relates to this: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about...

The pressures that we put researchers under to deliver nothing but positive results is terrible. There is an overhead to research. There is an overhead to progress. Why do we try to eliminate it with such prejudice, when the consequences seem so obviously dire?

⬐ frozenport

I have a theory that the change is due to the communication revolution. It is significantly easier to submit a proposal, and many proposals are now unsolicited, before you needed an 'in' and now you only need to submit the document through a website.

⬐ HarryHirsch

NIH proposals are, as always, solicited three times a year, and the paperwork is also the mostly the same as always, except that some extra forms were added a few years back.

What has changed is the fact that research is getting more expensive, and that the financing model of state universities changed in the last decade - state funds have declined, and there is a greater pressure on professors to bring in external funding. The NIH budget, on the contrary, has not grown.

This is getting off-topic, but universities are in for an interesting time. A greater financial burden is placed on students, who then cannot find jobs thanks to the recession, the scramble for grant funding is increasing, there will be greater emphasis on teaching faculty, which at some point you cannot pay peanuts any longer. Altogether a perfect storm for deans.

⬐ anigbrowl

I strongly agree. I was struck by the mention that in the 60s 2/3rds of research projects were funded, whereas nowadays only 1/5th are. This is not just due to stinginess; there are more research labs chasing funding and grant applications have become professionalized, if not commercialized. Maybe this is also a function of more people pursuing academic success as a career path, because the rise of IT has resulted in a significant devaluation of labor-intensive work and thus the earning power of people engaged in it.

⬐ marcelsalathe

1/5? That would be nice... NIH funding levels are at 1/10 nowadays.

⬐ plg

Paylines at many institutes are even lower, around 8% It's only going to get worse with the sequester

⬐ qxf2

Well expressed idea and worth watching. Key point is that we think of 'overhead' and 'cause' as separate things in a charity, like overhead does not count towards the cause and hence has to be minimized. This kind of thinking has led to a world where smart, talented and willing people need to make a choice between 'doing good' an having a career.

⬐ opminion

Interesting talk about how the role of growth and non-profits. But I was put off by the very weak argumentation and the reactions by the sympathetic audience to unwarranted claims.

This case is suitable for a debate, rather than a monologue.

⬐ gailees

soooo good