Do people still believe that nonprofit sectors have the ability to change the world? The nonprofit sector markets for the people that the traditional market of society doesn’t, so in order for no one to be left out in the world, the nonprofit sector must play a huge role. Cancer charities have been around forever, yet they’re nowhere near finding a cure. Homeless charities are not close to solving homelessness in any city.
The issue is that there are these large social problems and tiny organizations trying to tackle them. We, as a society, have this perpetuating idea that nonprofits cannot use the money donated to them for things like salaries and marketing. People who are the ones working in the nonprofit sector are also the ones helping people for a living.
Living in a money-hungry society, the brightest college graduates are usually swayed to work at whichever company will pay them more. This makes people who truly care about an issue choose to either make a difference or make a living.
In his TedTalk, entrepreneur Dan Pallotta said that the median compensation for a Stanford MBA at the age of 38 was $400,000 while the average salary for the CEO of a hunger charity is $84,000.
It’s unfair for a person with an MBA to make a $316,000 sacrifice every year to be the CEO of a hunger charity, just because they care about the issue at hand. Especially when they could simply donate money toward the problem and be on the board of the hunger charity, still making a difference and still making $316,000 more dollars than the CEO of the hunger charity.
Nonprofits are also lacking due to preconceived ideas of their advertising and marketing. The for-profit sector makes a lot of money through advertising and getting the word out about their company because of marketing strategies.
Every donor’s favorite saying is that they want their money to go to the problem so they don’t want to see their money spent on advertising. If nonprofits spend their money on advertising and getting their name out there, they could bring in more sources of revenue which would get more donations.
Advertising and marketing are ways to get people to buy into what companies are selling. In the non-profit sector, they aren’t selling anything; they are trying to make a difference by raising money for major social problems.
The third and fourth areas of discrimination within nonprofits are taking risks and time. People don’t allow nonprofits to take risks and generate new ideas. The nonprofit sector doesn’t take risks because if they do and they fail, their reputation will fall.
If they were given enough time when taking risks, they might be able to generate enough revenue to be successful. For example, Pallotta talks about how Amazon went for six years without returning any profit back to investors. That would never be applicable in the nonprofit sector because that money wouldn’t be going directly to the needy.
How do we expect nonprofits to solve these massive social problems and keep afloat when they are not given tools to succeed?