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The way Dan Pallotta thinks about charity is dead wrong

Tuesday, March 12th, 2013

I’ve noticed Dan Pallotta’s ‘The way we think about charity is dead wrong’ TED talk seems to be spreading around the internet quite quickly. The title grabbed me, but the content couldn’t be more off. So I thought I’d weigh in with an alternative perspective.

Firstly, where I agree with him: many of the ways our charities work, stifle innovation.

Definitely. But his approach is to turn the charitable sector into an extension of the free market. Even with an opening in which he acknowledges that human stories can’t be monitized, he goes on to prescribe market solutions for the rest of what the non-profit world should be doing. ‘Philanthropy is the market for Love,’ he tells us, hinting at the lens he views the world through early on in the talk.

But there is no ‘market for Love,’ and markets are not where the solution lies, in my opinion. Two of his specific arguments truly irk me:

1) That more talented people go into higher paying jobs, and thus are put off working in the non-profit sectors

2) That change is best achieved by massive organisations addressing massive social issues.

Mo’ money, mo’ talent?

Just look at the most highly paid jobs in a market economy and how many of them have even a minimal social value? Conversely, how many of them have a sum negative impact on the world? The financial sector (in the broadest terms), attracts those who are primarily interested in making money – to the detriment of all else.

I don’t believe that ‘the most talented people’ the world has to offer are the ones who have laid-off so many workers in the name of ‘staying competitive,’ or who have decided that wars and climate change are simply the ‘costs of doing business.’  These actions require a certain kind of deliberate ignorance, which is not a trait civil society organisations need. Quite the opposite!

As charities begin to reinforce the market logic that you should spend your time making as much money as you possibly can for yourself, it will only reinforce the many social and environmental side-effects that such an attitude has in an unchecked free market.

The motivations that often get people working in a charity or NGO, such as passion for and commitment to a cause, or a better world, more generally, are at odds with this. They see life’s goals as more pluralistic than simply ‘get as much as you can for yourself.’ That attitude is killing our species, our societies and the planet we all call home. Infinite growth, whether for an individual bank account, or a global economy, cannot be maintained on a planet of finite resources. It is the problem.

We need different ways of understanding value and success.

Further, the kinds of university programmes Pallotta describes as producing ‘the best talent’ still seem to churn out private sector MBAs who exchange everything in the world, for short-term profits, and who have been at the core of countless broader scandals and crises. Our ‘Ivy League’ institutions are indeed part of the problem. Some may come out with their moral compass reasonably intact, but the vast majority learn to run a kind of ‘efficient’ organisation that can only see budget lines, at the cost of anything that can’t be measured in money.

Dan Pink has written extensively about costs of trying to link money and motivation, and argued convincingly that intrinsic motivation (like passion for your work) is far stronger than extrinsic motivation (like a bonus, or a high salary). When our systems cater to the latter, lots of bad things start to happen, encouraging a range of ‘gaming’ tactics, in which dishonesty becomes the norm, and the true objectives are sidelined for the short-term targets with personal self-interest attached. Basically, these kinds of motivations (Pink calls them ‘if-then’ motivators) pit self-interest against collective interest, encouraging people to act selfishly, rather than trying to align ‘what is best for me’ and ‘what is best for us.’

Bigger is better?

There’s another idea that ‘bigger organisations are more efficient, and thus more equipped to address big social ills, than smaller ones.’

But this doesn’t hold much water, either.

Big organisations seem far better at producing quantitative results, at the cost of qualitative ones. And to the point where the ‘quality’ can actually be a sum negative impact (rather than just ‘not as good as it could be’ one). Stories abound of big NGOs that have ended up doing more harm than good, as their disconnect from the on-the-ground realities of so many of their own projects, means that for all their ‘efficiency savings,’ they were actually doing the wrong thing in the first place!

Billions and billions in governmental and philanthropic funds are channelled into the sphere of aid and international development each year, but many of the problems keep getting worse. We mean well, but for all our best intents, most of those costly, large scale efforts aren’t achieving what they are meant to.

When it comes to complex social change, context and relationships really are everything. Just because something worked well in one time and place, doesn’t mean it will easily be carried over to another. ‘Scaling up’ – a notion at the core of so many large programmes – is a doomed idea, as tantalising as it can be. Organisations which try to replicate one solution, in another place, often miss the critical non-replicable factors of individual relationships and nuanced context that were at the core of any initial successes.

Alternatively, Margaret Wheatley and Deborah Frieze have advocated ‘scaling across’ – a more grassroots process, in which smaller, local projects can share ideas directly with one another, spreading value where it is needed, without imposing it as a blueprint to be followed to the letter.

‘Scaling up’ comes from the kind of managerialism still taught in many of the institutions Pallotta advocates non-profits get their execs from. It is the notion that distant, well-paid ‘experts’ know better than people who are experiencing an issue themselves, how best to address that issue.

The hubris of this long-standing belief is staggering, and is at the core of why many smaller, local efforts, often do better work than larger organisations – even when appearing ‘inefficient’: people understand their own situations better than anyone else.

If you knock down those two pillars of Pallotta’s talk, I think the rest crumbles with it. What he advocates is more of the same ‘NGOs should be more like the private sector’ approach that has been advocated – and often applied, at considerable cost – to the world of social change organisations for decades.

I say no. ‘More like people’ isn’t afraid to learn things from a range of places, but the lessons Pallotta advocates specifically undermine the sense of humanity that we need more of. If we want to make more of a difference through our organisations, let’s not rely on MBAs, devoid of any ethical grounding, or large scale development projects that have no way of really knowing what’s going on at street level. We don’t have to be puritanical, as Pallotta suggests, to avoid adopting the greed that creates so many of the social ills our organisations work against. We just need to stay in touch with the values that motivate us to create change in the world.

Like what you’ve read? Help publish my book, ‘Anarchists in the Boardroom: How social media and social movements can help your organisation to be more like people’ and pre-order it now!

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Trust works for business, why not for charity?

Tuesday, August 24th, 2010

Paul Story in Edinburgh

Paul Story in Edinburgh

I met Paul Story in Edinburgh during the Fringe Festival last week. Paul is an author of fiction. I admittedly don’t read much fiction (Kurt Vonnegut aside), but when I met him, he was handing out hard copies of his novel ‘Dreamwords’, having dubbed them ‘The Honesty Edition’. Here’s how he describes ‘The Honesty Edition’ on his website:

“I ask people to help themselves to a physical copy of Dreamwords Book One on trust. They should pay only if they wish to see the rest of the series published. Book Two is complete but it needs to find its readers before it is able to survive. By trusting people to be honest I hope that future fans of the series will father the next book by paying for the one they have just read. Furthermore, honest readers who do not respond to the story are honour bound to find someone else who agrees to the honesty deal. This way, and with luck, each copy will have a chance to find its own champion. In an ideal world, I only want those people who enjoy the book to pay for it.”

Sounds a bit naive, doesn’t it? Giving people you’ve never met the product of your labour, on the trust that they will send you some money, some time down the road? Traditional economics and much old school psychology would both likely toss the idea before giving it a chance to breathe. Paul Story ignored them, maxed out a credit card and printed 10,000 copies to give out on the streets of Scotland.

“There are no tracking chips in the spine, no check-out tills nearby, no security cameras or guards monitoring the display and no legal documents to sign. The Honesty Edition has been designed so that the reader is free from any pressure to pay beyond their own sense of honour. My bet is that most people are trustworthy and that enough will enjoy the story to make this crazy idea work.”

Bias declared: I loved the idea from the moment I read the sign Paul had set himself up with in Edinburgh. That said, when he outlined some of the early outcomes, I was still very impressed:

  • He has made more on the books he’s distributed so far (from the money people have sent him online), than he would have if he’d sold them in stores;
  • The 1st thousand distributed copies of ‘Book One’ of the series have (I believe) gone ½ way to paying for costs of the entire run;
  • If he is paid the suggested £7.99 for less than ½ of the total 10,000 copies, it will subsidise the costs of both Book One and Book Two. Anything more pays his rent.

Post-Web?

Dreamwords cover

Dreamwords Book One

I see Paul Story’s ‘Honesty Edition’ as a ‘Post-Web’ experiment – taking the ideas underpinning the ways we’ve come to use the internet (to share, discuss and work together for mutual benefit on a mass-scale) and bringing them back into the ‘real world’ again.

Paul has trusted each of us who have taken a copy of the book to be both its funders and distributors – much as countless independent bands have done online in recent years – but primarily through people we are in human (rather than exclusively web-based) contact with. The internet will play some role in its potential success (it’s how payments are sent, people may Tweet/blog about it, etc), but this will be secondary to directly passing the book along to someone you think will appreciate it.

Much like how Shinobi Ninja, Steve Lawson and countless other musicians use Twitter and other social platforms, Paul Story lets the fan do his marketing, promotion and distribution, based-on the sense of value they/we get from his work. What’s most interesting to me is his structured experiment to see if the same behaviours will carry-over at a comparable scale in the non-online world…

Trust works

The key lesson I’ve taken from ‘The Honesty Edition’ is that even in the seemingly impersonal and self-motivated context of business transactions, trust works! As James Surowiecki, looking at the growth of successful Quaker-run businesses in eighteenth-and-nineteenth century Britain highlights, “as Quaker prosperity grew, people drew a connection between that prosperity, and the sect’s reputation for reliability and trustworthiness” [The Wisdom of Crowds, p. 119].

Dan Pink summarises a similar theme from Clay Shirky’s latest book, Cognitive Surplus, demonstrating the issues with creating untrusting structures in our workplaces, businesses and elsewhere in society:

“when we design systems that assume bad faith from the participants, and whose main purpose is to defend against that nasty behaviour, we often foster the very behaviour we’re trying to deter. People will push and push the limits of the formal rules, search for every available loophole, and look for ways to game the system when the defenders aren’t watching. By contrast, a structure of rules that assumes good faith can actually encourage that behaviour.”

In another recent piece, Pink writes: “Like any valuable relationship, the ones we have in business hinge on trust. And trust depends on openness, respect and humanity.”

What are voluntary sector organisations doing about trust?

So what have leading voluntary organisations and non-profits done with these ideas? My experiences have found very little, as many of us have clung to the traditional idiom that trust is at-best a naive guiding principle, and have structured our organisations accordingly.

Has your organisation bucked-the-trend? The voluntary sector should be leading the charge in this shift, but I’ve yet to see evidence that this is the case…

I’m hoping you can prove me wrong!

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More Like People is an association of freelance consultants, facilitators and trainers, working primarily in the voluntary, community and campaigning sectors in the the UK and elsewhere.

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