Today I watched Dan Pallotta’s TED Talk from earlier this month. If you haven’t seen it yet, take 18 minutes to watch it. It’s called “The Way We Think About Charity Is Dead.”

I’m not sure if I agree wholeheartedly with all of the points he made (for instance, I get his point about nonprofit salaries but also don’t think organizations should go overboard in how much they are paying staff – yes, we work just as hard as those working at for-profit companies, but that doesn’t mean CEOs or Executive Directors of successful organizations should be making exorbitant salaries). However, for the most part, his message is something that people, particularly foundation/corporate funders and individual donors, need to hear. And that message is that organizations need to be encouraged to spend money on overhead. Allowing nonprofits to spend money on overhead provides for innovation, more money to be raised, happier employees, higher levels of productivity, and most importantly, social change on a larger level.

The saying “you have to spend money to raise money” is true. I often feel like if I had more resources at my disposal to use better tools or hire more staff, so much more money could be raised, and by default, so many more people in the community served. This whole concept of keeping overhead (management, fundraising, and operational expenses) at 25% or below (I actually feel the expectation is to keep it far below that, even if 25% is the “standard”) is crazy. I hope people like Dan Pallotta continue to spread this message and that those in the grant making/world of philanthropy start listening.