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"Why Can't We Sell Charity Like We Sell Perfume?" Because the Product Affects the Process

09/28/2012 03:25 pm ET | Updated Nov 28, 2012

In his article, "Why Can't We Sell Charity Like We Sell Perfume?" Dan Pallotta argues that Americans and the funding community should stop holding charities to different standards from the rest of the economic world. Non-profits are not supposed to remunerate their executives or invest in marketing and branding strategies. Instead, they are supposed to deliver success on every project in absurdly short time frames.

Let capitalism guide non-profit behavior, he asserts, and "we could bring private ingenuity to bear on those problems and would not need to look to government to fill the gaps." Although Pallotta makes a number of both thought-provoking and innovative arguments, particularly the double standard that the funding community holds business and charities to, his proposed solutions fail to address the fundamental differences between businesses and philanthropies.

In fact, a corporation's purpose is to safeguard its own existence, while a charity's most basic goal is to put itself out of business--to create the physical and human infrastructure that a community needs to solve its own future problems.

The rules by which non-profits operate and the ways by which we measure success differ significantly from those of the business world. Philanthropies do not exist to make a profit by selling goods and services in a competitive market; instead, our mission is to drive positive change, fundamentally altering the lives of individuals, communities, and countries. Our end goal is not to make a financial profit but, rather, a human one.

Moreover, although philanthropies may vie for donors' support, competition on the ground often results in service overlaps and wasted spending. Nonprofits that build wells to provide clean water should work with nongovernmental organizations that offer courses on sanitation and hygiene. Charities that give nutritional counseling should partner with agricultural-focused philanthropies that help disadvantaged farmers. Because developmental challenges are multifaceted and complex, collaboration is absolutely essential. Too often, organizations provide the same services to the same community, resulting in too many mosquito nets but not enough educational services.

Competition, on the other hand, drives the corporate world, where companies go to great lengths to cloak their products in secrecy to gain a larger market share, forever focusing on earning higher profit margins.

Such differences in structure indicate the need for more nuanced solutions than building a stock market or simply incorporating charities into a more capitalist sector. Pallotta usefully highlights a number of issues that charities have struggled to articulate--our inability to invest in staff development and marketing strategies as well as the pressure that stems from high donor expectations. But if we, as charities, want to change this double standard, we need to take a more active role in shaping the discussion and funding environment.

Corporations profit from goods and services that people want or need to live happier, healthier, more fulfilling lives. If nonprofits want to increase their funding, then we should find a way to show people that donating to our causes will make their lives more meaningful--that there is a profound benefit in helping another human being. To do this, nonprofits must focus on humanizing our work. Too often charities' fundraising campaigns present a stark, distant, and unrelatable 'problem' instead of real people and tangible solutions.

In America, we are surrounded by messages saying that we can save a child for a dollar a day, and so we believe that, to raise these children and to help them break the cycle of poverty, they need a cup of soup or a mosquito net. Yet, we try our hardest give our children absolutely everything that we can--Halloween costumes, check-ups at the doctor, quality education, positive self-esteem, and a sense of belonging.

To fundamentally change these norms, nonprofits need to be bolder. Believe in your mission. Find your niche in the market and develop a network of donors that believe in your strategy. Then stick to it. Let your success speak for itself.

That's what we've done at Ubuntu. We realized that a traditional developmental model would not have the capacity to address the complex challenges that our community faces. We built a context-driven community institution, focusing on the depth rather than the breadth of our impact, working within a community of 300,000 people. We invested heavily in our staff, created a marketing and communications department, developed a loyal support network, and continue to take the time to listen to the community we serve.

We can go head-to-head with the world's most successful corporations in quantifying our "profits" - Ubuntu scholars will earn $8.70 over the course of their lives for every dollar invested in them. We have achieved our success by balancing--employing business best practices, while always remembering that we work to address complex, social, and profoundly human issues.