Click here to read an original op-ed from the TED speaker who inspired this post and watch the TEDTalk below.
In his TEDTalk, "The Way We Think About Charity is Dead Wrong," Dan Pallotta discusses the different rulebooks by which for-profit companies and non-profit organizations operate. He highlights the disparities between these guidelines, arguing that our conceptions and expectations of philanthropies undermine their ability to affect lasting social change. Pallota's thoughts on donors' aversion to charities' ability to take risks, in particular, have become increasingly relevant in today's funding environment.
The industry's latest buzzword, "impact investing," forces nonprofits to minimize spending per unit while maximizing returns on investment, even when that unit is a human being. Fundraising initiatives have become tied not to outcomes but to outputs -- how many mosquito nets, cups of soup, or vaccinations did an organization distribute?
Consequently, charities' missions and programs are constrained by a simple equation of how to reach x amount of people in y number of regions over the course of z months. Deviating from this formula can hinder organizations' marketability, and so many decide to limit the scope of their projects to appease their funders.
Philanthropies avoid not only "any brave, daring, giant, new fundraising endeavors," but they also shy away from investing in strategies that challenge traditional development norms. But, as Dan Pallotta argues, when "you prohibit failure, you kill innovation."
At Ubuntu Education Fund, we have struggled to market our model, because it redefines the theory of "going to scale" by focusing on the depth rather than breadth of our impact. We have spent over a decade convincing donors, corporations, and foundations to believe in our mission -- to help children living in the townships of South Africa grow into healthy adults with stable incomes. Much like the desire of any parent throughout the world, we try to give our students everything that they need from cradle to career.
You cannot raise a healthy, stable child in a 12-month grant cycle, and you can't drive lasting, community-focused change by conforming to status quo ideas. -- Jacob Lief
Although our strategy complicates our fundraising efforts by deviating from traditional development formulas, we believe that its impact justifies its challenges. We have learned that alleviating singular factors of poverty does not generate long-term success. Providing school supplies to a student who regularly misses class to earn her family's income is ineffective. Sending food packages home to a child who suffers from HIV-related complications is not enough. And counseling a rape survivor who must go home to the same, unstable house is unsuccessful. Instead, Ubuntu offers comprehensive household stability, health, and education services to our children, placing them on the pathway out of poverty.
Our strategy, albeit more time-intensive, yields incredibly high social returns. Ubuntu's scholars are twice as likely to graduate high school than their peers. Our clients' HIV treatment regimen adherence rate is 96 percent compared to Port Elizabeth's 57 percent. Long-term, our children will earn $8.70 for every $1 that we invest in them. Their peers will ultimately cost society approximately $9,000 while our clients will contribute, on average, $195,000 to society over the course of their lifetimes.
You cannot raise a healthy, stable child in a 12-month grant cycle, and you can't drive lasting, community-focused change by conforming to status quo ideas. Addressing massive social problems takes time, creativity, and commitment. By promoting aversion to risk and stifling innovation, the industry truly is crippling itself.
Ubuntu has been lucky. We have found funders that believe in our strategy and are dedicated to sustaining it. But we, alone, cannot address all of the challenges faced by those living in poverty. We must work together with organizations around the globe to catalyze change and, if nonprofits continue to abide by this separate rulebook, we stand little chance at actually addressing many of the social problems that plague our world.
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