When we donate to charities, it's never clear exactly where the money goes and whether our donations actually benefit the people they're supposed to help. Many donors are often shocked and outraged
when they learn that some executives at nonprofit charities are being paid salaries exceeding $1 million. But activist and fundraiser Dan Pallotta thinks this anger is misplaced and could damage charity fundraising, pointing out that people blame capitalism for creating inequities in our society, but then they refuse to let nonprofits use the tools of capitalism to fix the problem. Here are a few more things to think about when it comes to charities.
- In a recent TED talk, Pallotta suggested that charities should be rewarded for what they actually accomplish even if it costs a lot. People may not like the idea that their money is being used to pay for a charity's CEO salary or for advertising and marketing, but they should think about it this way -- investing in a capable leader and effective marketing efforts will significantly increase the amount of money raised that can then be used to help those in need. [url]
- It's really hard to turn money into help. That's what Tim Myers, founder of the Haiti School Project, realized after having spent more than $100,000 to build a school in Villard, Haiti. [url]
- Somaliland's success could be partly due to its lack of foreign assistance. Somaliland has been operating successfully as an independent country since it seceded from Somalia in 1991. Since Somaliland isn't recognized as a country by the rest of the world, it hasn't been able to receive foreign aid. As a result, it has been surviving by raising local tax revenues, which its citizens have been using as leverage to make the government more accountable.[url]
- Experts at The Center for Global Development suggest that there may be an "aid-institutions paradox" in developing countries, particularly in sub-Saharan Africa. They concluded that foreign aid could undermine a developing country's long-term institutional development and that donors should consider giving money to other more beneficial development activities, such as eradicating endemic diseases, peacekeeping, regional or global public goods, and debt relief.[url]
If you'd like to read more awesome and interesting stuff, check out this unrelated (but not entirely random!) Techdirt post