After hearing Dan Pallotta, author of Uncharitable, speak at the closing plenary at the International Fundraising Congress in the Netherlands in October, I know that his challenging and controversial ideas will be welcomed by fundraisers at FIA’s annual conference, Dare to Be Different on the Gold Coast in 2012.

Dan’s focus is on a big concept: are we, as a sector, able to respond to the big changes that we need to make – a cure for breast cancer, the elimination of hunger and poverty – in a reasonable timeframe? Not forty years from now, but perhaps seven? Dan’s question then, is if we’re not capable of that type of achievement, why?

Dan contends that the reason is that there are two rule books: one for charity and one for the rest of the economic world.
While much of the inequity may be caused by the for-profit sector, he argues that our society refuses to allow the nonprofit sector to use for-profit tools to bring about change.
Dan believes that the restrictions placed on charities are simply uncharitable. He looks at five main areas:

1. Compensation. We don’t like to see people make lots of money in charities. Conversely it is acceptable that people make a lot of money not helping other people or even hurting other people.
2. Advertising and marketing. We don’t like to see our charities spending money on fundraising. Imagine if we said this to a for profit company.
3. Risk taking. Taking risks to find new ways to increase donation levels. A Hollywood movie company can make a $150 million movie that flops. If a charity does a new fundraising activity that doesn’t make immediate profit in 12 months, then a fundraiser’s character is brought into question.
4. Time horizon – Amazon went for six years without returning profit to investors because there was a long term plan. Imagine if a charity suggested this?
5. Attract risk capital. ‘The nonprofit sector is starved for growth capital and risk capital, it simply can not access this.

Dan says that this view of charities is policed by the very simple but dangerous question: “What percentage of my donation goes to the cause rather than overheads?”
They key problems with this question, according to Dan, are:

1. It assumes that overhead is not part of the cause. In fact, many of the fundraisers at IFC started wearing signs that said, “I am an overhead.”
2. It means that charities don’t spend money on the things they need to solve the big problem. This is how we institutionalise the smallness of our organisations.
3. It gives donors really bad information. It tells nothing about the quality of the programs and the help that is given to the community.

The real challenge is what we do about it. Dan says there are two solutions:

1. Educate the public. Dan is working in the US to develop a charity defence council to counter bad reporting and to undertake public awareness campaign.
2. We need to prioritise our wildest dreams. We need to do everything we can to meet our big objective.

Dan’s final message was that we must speak our truth. “I am not in this to keep overhead low. I have not dedicated my life to this to meet some arbitary standard. I have dedicated my life to this because I want to see kids stop dying of diarrhea. I want to help people who are blind. I want to help all of them, not a few of them,” he said.
Dan’s message is both important and controversial. What do you think?

Thanks to the crew at xponential.com.au, Dan Pallotta is presenting the plenary session on Thursday 1 March at the Fundraising Institute of Australia Conference, and a panel session to discuss the key concepts will follow. Bring your board members, bring your CEO, bring your manager. Dan will dare you to be different and to be great. Click here to find out more or to register now.

Bernard Ross and the crew at The Management Centre have developed a great wiki about the future of fundraising. Here’s my contribution.

The Long Tail will get longer:

Although some of the fundraising scenarios here recognise that many of the current ‘blue chip’ charities will be replaced, there will always be a core of big players in every nonprofit marketplace. The current players who are particularly slow to react or respond because of their internal bureaucracies will be left for dead. 
But what about the rest? Smaller, nimbler and more effective nonprofits will spring up to make an impact on the causes dear to their tech-savvy and well-connected founders. In effect, this will create a long tail of hundreds of thousands of smaller organisations able to use their wired networks to create the impact that they desire. Already, in most countries, fundraisers bemoan the fact that there are ‘too many’ nonprofits. Well, you aint seen nothing yet. These new small nonprofits will be:

• One hundred per cent online. They will have no need to be encumbered by the costs and limitations of offline real estate and bricks and mortar.
• Borderless: There will be no need to restrict fundraising to a geographic location. Fundraisers will predominantly build their networks online and connect with donors all over the world. And donors won’t concern themselves with where the organisation is based, to get the impact they desire. Donors from Australia will want to give clean water to kids in Africa, if that’s their thing. They won’t care where the organisation is located.
• Shooting stars: From these new small nonprofits, occasional stars will shoot. They will be the ones that make giving fun and addictive, will look at everything from the donor’s point of view (see impact, below), be passionate and unfailingly determined and have tremendous whuffie (also known as reputation, trust and credibility in online communities and networks).

It’s all about impact:

• Dollar value on impact. Nonprofits that can put a dollar value on an outcome will continue to come out on top. Often called a ‘dollar handle’, this nifty tool is becoming more and more prominent. At charity:water your gift of US$20 will give one person clean water for 20 years. At Concern Worldwide your gift of US$28 can provide the uniform, books, pencils, and paper a child needs to attend one year of school.
• Donors will respond more generously when they have the opportunity to connect directly with beneficiaries. While Twitter will have been superseded by who knows what, we’ll see more campaigns like the recent TweetsGiving at Epic Change, where donors could communicate directly with kids at the local school in Tanzania. Simply beautiful.
• High impact collaborations: High-end donors will want to work together to have more impact, and will expect nonprofits to do the same.
• New-breed social entrepreneurs like Blake Mykoskie at TOMS Shoes will bypass the traditional charity model altogether and opt for creating massive, direct impact. Over the last few years, Blake Mykoskie has given 400,000 pairs of shoes to people in need all around the world.

Fundraisers everywhere in the world will get wired and more effective at their jobs (that is, raise more money):
Fundraisers will become more informed than ever before, with resources like the Showcase of Fundraising Innovation and Inspiration (SOFII) and hundreds of fundraising bloggers forming a strong and diverse fundraising and learning community.

• Goodbye Microsoft Office: Small nonprofits will finally take full advantage of online technology, and not just for fundraising. There are already so many free and affordable collaboration and communication tools such as 37Signals, Google Docs, GoogleWave and Yammer . While these tools will be superseded, tools like these will change the way fundraisers work.
• Nonprofits will understand that websites are not the be all and end all to the web. The smart ones will come at technology that promotes storytelling, collaboration, networking and conversations (hey, isn’t that what fundraising’s all about?)
• Video killed the radio star: Nonprofits will finally understand that video is a great way of sharing their stories and fundraising, thanks to YouTube , Vimeo and the current new breed of nonprofits like charity:water.
• It won’t just be SMS, although right now, SMS makes it incredibly easy to give, as we’ve seen in the massive and generous response to the January 2010 Haiti Earthquake. But moving beyond that, there will be new mechanisms and technologies that will mean we can donate with our mobile phones (or whatever it is you call them these days!) With just one click, no web forms, no barriers.

There are many more experts’ scenarios on the Fundraising Scenarios wiki. I’d particularly draw your attention to:

• Chris Washington Sare’s scenario. He’s the head of fundraising and marketing at Greenpeace Australia Pacific.
• Ken Burnett’s scenario. He’s the author of Relationship Fundraising and founder of www.sofii.org.
• Usha Menon’s scenario. She’s the director of the Management Center in Asia.

Please join the conversation. What do you think fundraising will be like in 2020?