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Distributed for Brandeis University Press


How Restraints on Nonprofits Undermine Their Potential

Distributed for Brandeis University Press


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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“Philanthropists and charity execs should read [Uncharitable] to ponder, if judiciously, its lessons.”

Boston Globe

“Pallotta turns on its head the assumption that charity and capitalism should be forever divided. Don't charitable causes deserve the same kind of competitive forces that work to get results in the for-profit sector? Wouldn't social causes be better served if charitable organizations were headed by the kind of bright, aggressive executives that work in the for-profit sector? Pallotta traces the history of nonprofit organizations to Puritan notions of charity and self-denial. He also offers a detailed case study of TeamWorks and other trends in the nonprofit sector that only tweak around the edges of a system that is sorely in need of change if it is to deliver on its mission to improve social inequities or cure diseases. A passionate, thought-provoking look at the nonprofit sector.”


“Pallotta produces quite a lot of both data and logic. If you do not first analyze a fundraiser’s results, how is it possible to judge whether what it spent was justified? He also makes a convincing case for charities to spend far more on advertising, perhaps even selling shares to pay for it. If this makes you queasy, read Mr. Pallotta’s book. As he says, ‘To mount a campaign to convert 6 billion people to love—which is essentially the role of charity—takes a lot of money. . . . . Raise the capital to promote the idea by offering a return on investment, hire the best people to manage the effort, and run the advertising to spread the word. You beat capitalism at its own game.’”

The Economist

“This tome is big-time out-of-the-box thinking that will cause ripples. Yet if you care about charity, it is a must read. While I don’t want to lose the volunteer passion and compassion in charitable work, it’s high time we confront the fact that, for the most part, this is no longer a bake sale.”

In Los Angeles Magazine

“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

“What scales would our nonprofit organizations have to achieve to eradicate the great social problems that confront us, and how do our traditions and beliefs about charity stand in their way? Pallotta has elevated the questions we need to be asking. His book provocatively challenges traditional views of how charities should operate and provides a thought-provoking alternative.”

Dr. David Ho, Time magazine’s 1996 Man of the Year and director of the Aaron Diamond AIDS Research Center

“Pallotta has written the clearest and most articulate critique I have read of the system of values that our charities and other nonprofit organizations are supposed to follow. He explains in graphic detail how these values undercut what charities are trying to do and prevent them from accomplishing all that they might. Not everyone may agree with his position, but the nonprofit world will surely benefit from a vigorous discussion of his arguments.” 

Derek Bok, former president of Harvard University

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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