This year’s Giving Tuesday comes at a critical time. Society stands on the brink of catastrophic, irreversible climate change. Meanwhile, decades of progress in the fight to end extreme poverty is being undone and reversed. Although these issues can appear insurmountable, solutions already exist that can drive measurable impact for millions of people around the world. To successfully scale them requires changing the way we think about charity.
Given the short attention span of today’s political elites, charities – and those focused on movement building and advocacy specifically – fill a critical void in ensuring the policymaking process is responsive to the needs of poorer nations and marginalized communities. Yet, a perverse myth continues to hamper their ability to invest in the kinds of campaigns necessary to cut through.
In his book, Uncharitable, Dan Pallotta outlines how the media and traditional philanthropy alike have unfairly and systematically demonized “charity overhead”, effectively poisoning public perception. In so doing, Pallotta argues, they have deployed a prolific narrative that has crippled the capacity of charities to achieve the large-scale change we desperately need. In reality, what is often dismissed as “overhead” (I.e. salaries, administrative costs) is in fact not only legitimate activities but arguably the core ingredients – including smart, hard working, dedicated staff – necessary for charities to pursue the kinds of scaled and systemic solutions needed to address climate change, extreme poverty and hunger.
Through a number of case studies, Uncharitable demonstrates how investing in so-called “overhead” actually allows charities to achieve far greater impact than they would have done without this spend. Why criticize a charity for spending 25 percent of its budget on advertising and social media, for instance, if it is able to achieve tenfold the impact it otherwise would? Or would we rather a charity achieve far less impact for humanity for the sake of keeping “overhead” below an artificial level?
For charities established for the purpose of advocacy, Pallotta’s argument strikes home. An advocacy organization is concerned first and foremost with influencing policymakers and shaping policy in the interests of the world’s marginalized and most vulnerable. Advocacy organizations recognize that solutions to the world’s problems – like climate change and extreme poverty – are systemic and therefore require systemic solutions that can not be solved without proper investment.
For example, extreme poverty is estimated to be a $350-400 billion a year problem. Evidently, no number of charity gala night dinners, or fundraising drives– no matter how efficiently run – will be able to raise this amount of capital annually. Nelson Mandela was right, when almost two decades ago, he said ending poverty was not an act of charity, but an act of justice. If ending poverty is in fact a multi-hundred billion dollar problem, then surely it demands multi-hundred billion dollar solutions? That’s why advocacy organizations concern themselves with campaigning towards governments and businesses that can shift capital at scale towards the end of extreme poverty. As Hugh Evans, Global Citizen CEO, has previously outlined, “a campaign, well designed, with a really clear outcome, can captivate people from all sides of the globe to achieve something bigger than all of us.”
If ending poverty is in fact a multi-hundred billion dollar problem, then surely it demands multi-hundred billion dollar solutions?
Philanthropists and donors can multiply their impact many times over by supporting advocacy organizations that run such well focused campaigns. I’ve seen this in our own experience at Global Citizen. For example, in 2020, three foundations each agreed to put $1 million into a campaign to help mobilize the hundreds of millions needed to ensure COVID-19 tests, treatments, and vaccines could reach everyone everywhere. These foundations understood it takes money to reach people. The campaign mobilized $430 million in cash commitments for the WHO’s Access to Covid 19 Tools (ACT) Accelerator, and those foundations who supported the campaign had a return on impact of 430:1. In other words, for each dollar that they contributed in support of this effort, the campaign helped mobilize almost $430 in cash funding directly to the ACT-Accelerator partners to ensure COVID-19 tests, treatments, and vaccines would be available to everyone, everywhere, as quickly as possible.
The case for investing in charities that focus on advocacy speaks for itself. And yet, the need to fund the basic structure and ecosystems of advocacy remains misunderstood. Accordingly, risk aversion and long drawn out grant application processes starve the advocacy sector. Funders shy away from investing in the capacity of advocates and campaigners that engage and inspire action takers because hard working staff, social media capacity, impact assessment, advertising, and all the things needed to run a successful campaign just do not fit into traditional stereotypes of charitable giving. Some countries still do not even recognize donating towards advocacy activities as a legitimate charitable contribution, deriving many NGOs of much needed funds for the large-scale policy impact they would otherwise be capable of achieving. As Darren Walker, President of the Ford Foundation states in Uncharitable, “this narrative has existed far too long… and in the end [it] hurts the very people [NGOs] were meant to help.”
“this narrative has existed far too long… and in the end [it] hurts the very people [NGOs] were meant to help.”
Impeded by this out of date view of what is and is not considered a legitimate and acceptable charitable activity, campaigners and advocates are left struggling to gain the attention of the world’s most powerful institutions to get meaningful policies implemented that could positively impact millions of people. And who are they up against as they compete for policymakers’ time and attention? Highly paid corporate and partisan lobbyists representing big brands with seemingly unlimited budgets, able to pour in resources over the long term to shape agendas in their self-interest. Charities that pursue advocacy efforts, however, are told they should not raise and spend funds on such activities, as though a 4:00am donated TV advertising slot is going to move as many hearts and minds as an advert shown in prime time. Yet, as traditional philanthropy goes, so long as overhead is maintained under an artificial benchmark, who cares if the impact is less than optimal? Who cares if poorly paid advocates struggle with burn out so long as “overhead” remains under an arbitrary benchmark? Pallotta answers these questions by pointing out that we are happy to have one set of rules for the private sector’s corporate interests, and another entirely for the charitable sector.
And who are they up against as they compete for policymakers’ time and attention? Highly paid corporate and partisan lobbyists representing big brands with seemingly unlimited budgets, able to pour in resources over the long term to shape agendas in their self-interest.
The negative impact of this outdated mindset is so apparent when it comes to climate change. Philanthropic giving toward climate change accounts for less than 2 percent of overall philanthropic giving; giving toward climate advocacy is even less. In stark contrast, arguably what has made fossil fuel interests so successful and entrenched comes down to two factors: 1) donors recognized the power of investing in communications and advocacy to pursue their economic and ideological agenda, and 2) they recognized that investment – in think tanks, research institutes, and lobbyists – had to be sustained over the long-term and maintained with a high degree of trust unhindered by a bureaucratic obsession with “overhead.”
However, when it comes to investing in the capacity of campaigners and advocates working to secure a just energy transition for small and poor nations, and the billions needed to phase out fossil fuel and unlock a clean energy future for everyone, a similar level of commitment is in short supply from donors. Post-COP27, there remains a more than $16 billion shortfall in wealthy nations' promise to provide $100 billion annually to help developing nations adapt to and mitigate the impacts of climate change. Without movement building aimed at holding these governments accountable - together with creative, problem-solving advocates working the corridors of power - these promises will arguably never be met. We need those holding the purse strings in philanthropy to make some big bets and invest in the policy entrepreneurs and advocates looking to turn things around. An investment of at least $1 million into climate financing advocacy could have a return on investment of 16,000:1.
The clock is ticking. Now is the time for society to discard its outdated view of what constitutes legitimate charitable endeavors. There is $2 trillion in global philanthropy assets waiting to be deployed, which could snowball into far more positive impact if invested in long term policy change. Even a fraction of this, spent differently, could help fund the types of ambitious advocacy campaigns calling for systematic change. As Pallotta has shared previously, we need more people who will say, “I will help fund the overhead to build that organization to achieve their dreams.”
This Giving Tuesday, we have the opportunity to be generous – not only financially, but also with the way we regard and support the tireless work of charities, advocates, nonprofits and grassroots organizers who dedicate their lives to uplifting humanity.
Our future cannot wait. Millions of lives are at stake. The planet’s longevity hangs in the balance.
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The Way We Think About Charity Is Wrong: Lessons From Dan Pallotta - Forbes
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