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How Restraints on Nonprofits Undermine Their Potential

Uncharitable investigates how for-profit strategies could and should be used by nonprofits.
Uncharitable goes where no other book on the nonprofit sector has dared to tread. Where other texts suggest ways to optimize performance inside the existing charity paradigm, Uncharitable suggests that the paradigm itself is the problem and calls into question our fundamental canons about charity. Dan Pallotta argues that society’s nonprofit ethic creates an inequality that denies the nonprofit sector critical tools and permissions that the for-profit sector is allowed to use without restraint. These double standards place the nonprofit sector at an extreme disadvantage. While the for-profit sector is permitted to use all the tools of capitalism, the nonprofit sector is prohibited from using any of them. Capitalism is blamed for creating inequities in our society, but charity is prohibited from using the tools of capitalism to rectify them—and ironically, this is all done in the name of charity. This irrational system, Pallotta explains, has its roots in four-hundred-year-old Puritan ethics that banished self-interest from the realm of charity. The ideology is policed today by watchdog agencies and the use of so-called efficiency measures, which Pallotta argues are flawed, unjust, and should be abandoned. By declaring our independence from these obsolete ideas, Pallotta theorizes, we can dramatically accelerate progress on the most urgent social issues of our time. Uncharitable is an important, provocative, timely, and accessible book—a manifesto about equal economic rights for charity. This edition has a new, updated introduction by the author.

344 pages | 2 tables | 6 x 9

Economics and Business: Economics--Development, Growth, Planning

Sociology: Social Institutions

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“Everyone who cares about nonprofit organizations and their potential accomplishments—from journalists to sophisticated donors to foundation officials—should read this book. They’ll surely be convinced that fundraising ratios and program expense ratios are a silly, useless, and even fraudulent way to compare “efficiency” across nonprofit organizations.”

Stanford Social Innovation Review

Table of Contents

Introduction to New Edition

1. The Morality of Outcomes
Nonprofit Ideology
A Model of Christian Charity

2. The Foundations of Our Misconstruction
Economic Apartheid
The First Error—Constraints on Compensation: Charity and Self-Deprivation Are Not the Same Thing
The Second Error—Prohibition on Risk: Punishing Courage, Rewarding Timidity
The Third Error—Discouragement of Long-Term Vision: The Need for Immediate Gratification Institutionalizes Suffering
The Fourth Error—Discouragement of Paid Advertising: If You Don’t Advertise Here, Your Competition Will
The Fifth Error—Prohibition on Investment Return: The Limits of No Return, and a Stock Market for Charity

3. Stop Asking This Question
Efficiency Measures—The Puritan Guard
Efficiency Measures Miss the Point
Efficiency Measures Don’t Measure Efficiency
Efficiency Measures Are Unjust
Overhead Is a Fiction
New Questions and a Very Large Assessment Apparatus

4. Courage
A Cold World?
Strategic Plan
Reclaiming Our Dreams


Case Study—Pallotta TeamWorks
Methods and Controversy
Collapse of the Company
Impact on Organizations’ AIDS and Breast Cancer Fundraising


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