How Capitalism and Public Radio Almost Killed Me

Imagine to yourself, that you managed to leave the office before 6. You get in your Prius and start cruising down the highway. You suddenly realize you are actually in the car in time to listen to Marketplace, so on you flip the radio and this is what you hear a man's voice saying:

"Amazon could forgo investor returns for six years to build market dominance. But if a charity embarks on a long-term plan with no return for the needy for six years -- we expect a crucifixion. Business can offer profits to attract investment capital. But there's no stock market for charity. So the for-profit sector monopolizes the multi-trillion-dollar capital markets. No competitive compensation, no advertising, no risk-taking, no long-term vision and no capital markets. A perfect storm of prohibition that puts the nonprofit sector at extreme disadvantage to the for-profit sector. We blame capitalism for the inequities in society, and then refuse to let charity use the tools of capitalism to rectify them."

This is when I almost drove into the road divider.

But he wasn't done: "Maybe capitalism isn't the problem. Maybe the lack of it is. It's been banished from charity by a Puritan ethic of deprivation that considers it contaminating. Maybe an ethic that stands in the way of progress is an ethic whose time is done."

I could not believe my ears. Who was this maverick that had exposed the industry's dirty laundry on the airwaves? This person who had the courage to say what many of us already know and live with every day but accept as "the cost of doing business" in the at large nonprofit community?

Safe and sound at home, I looked up the story and found that the commentator had been Dan Pallotta, author of the new book Uncharitable.

To me, what Dan was saying was not so much shocking in itself as the fact that he was saying this on public radio for all to hear.

I have written here before about the pace of change in the nonprofit vs. nonprofit sector (the "Flintstones vs. Jetsons" as I like to think of it).

How many of us, whether as an agency or "in-house" have faced the following dilemma:
"Let's do something new, something innovative! But, let's make sure it works, we don't want to lose money on this and then we'll have to hear from The Board." "Let's do something no one else has ever done! But, show me who it's working for already."

We all understand why we are faced by this situation-many nonprofits have very powerful, and very involved boards. Many serve those faced with life and death situations-so every dollar lost could cost someone a life. We are the "stewards" of our donors money and we have to answer to them for how we spend it.

But something Dan says in his commentary really gets to the heart on this strangle-hold on innovation that often chokes our ability to make decisions: "...charities can't develop learning curves for revenue generation."

If everything has to be a sure thing, we can't take risks, we can't learn, and we won't move forward.

I haven't read Dan's book, so I have no idea if I agree on him with anything other than his Marketplace commentary, but it certainly got enough of my attention that I am going buy the book and tell you what I think of it. Stay tuned.