Monday, on the CBC radio program Q, Dan Pallotta reignited the conversation about whether or not charities should operate like businesses. He discussed the furor around his recent article in the Wall Street Journal – “Why Can’t We Sell Charity Like We Sell Perfume?” – suggesting that if nonprofits really want to create change, they need to be allowed the same leeway as businesses. He says that the public needs to understand that sometimes competitive salaries, more advertising and higher overhead costs are necessary for nonprofits to take on bigger issues.
In Canada, charities are usually evaluated by the percentage of funds spent on program delivery vs. those spent on administration. There is a strong desire to keep salaries in the non-profit sector lower than those in business and that feeling doesn’t seem to be going away. The topic came to a head in 2010 when Liberal MP Albina Guarnieri proposed Bill C-470, a private members bill designed to cap nonprofit salaries at $250K. Though it didn’t pass, the bill would have made into law the cultural restraints on philanthropy that that Dan Pallotta critiques in his recent book, Charity Case.
Check out the interview, if you haven’t already. Dan Pallotta’s discussion with Jian Ghomeshi provides insight and fuel for the ongoing conversation about nonprofit salaries, accountability and the real role of business in philanthropy.