Nonprofit enterprises make up about 9% of the workforce in the United States and are the fastest growing sector of the US economy, with more than 1.4 million nonprofit organizations today. The National Charitable Foundation claims that the amount of money provided to charitable organizations in the United States in 2012 was $ 316 billion; more than 300% more than a decade ago. With an exponential increase in revenue, we expect a proportional increase in productivity. Breast cancer treatment has not been detected, unsafe nutrition dominance remains in Sierra Leone, and we have not discovered the surface of vaccine detection or preventive measures for tuberculosis. The failure of the comparison between financial growth and efficiency is due to poor infrastructure within the sector and attempts to combine pathos, capitalism and taxes.
The 300 percent increase in philanthropy over the decade cannot be explained by the evolution of a gradual sense of remorse in society for others. Rather, a combination of greater awareness and implementation of financial incentives. While we all like to believe that our favorite celebrities and CEOs donate because they feel a social obligation, many participants donate money to give the right to deduct a charitable contribution against income tax.
As a rule, we associate charity with giving other people altruism and ethical commitment. Regardless of whether a person decides to donate to charity from charity or tax spurs, individuals are always given for the purpose of their financial contribution, proportionally distributed for a reason. When people from the general population give $ 100 to feed America, each person invariably demands that their payment be used to buy children worth $ 100. It is easy to monetize the feeding of one child, but it is difficult to assess the effectiveness of providing money to an organization that spends it on overhead. The perspective from the donor is the main one: when money is provided for charity, it is expected that it will serve the cause, absolutely - any other distribution should be redundant, because it is not non-commercial.
With this in mind, here is an illustration of the activities of a charitable organization. We have Brad Pitt, LeBron James and Kanye West, who contributed a total of $ 80 million to their favorite charity organization, Habitat for Humanity. [hypothetical situation], At the next board meeting, three celebrities sit alongside the board of directors and the well-educated, well-experienced CEO of Habitat for Humanity. The CEO claims that they have to spend $ 80 million on fundraising, research, and hiring - potentially a further increase in revenue and the effectiveness of charity. Pitt, James and the West cannot rationalize the idea of spending money on unimportant and intangibles. Moreover, donating money to a charity that does not use money because of its cause does not make them feel good about themselves. After celebrities. request, the CEO decides to spend money on the construction of a number of houses. However, $ 80 million. The US could be spent in other areas that could attract more capital and improve the efficiency of the organization.
Conversely, imagine that three celebrities start brainstorming at a board meeting and decide that it might be a good idea to invest $ 80 million in activities or research to generate more income. At the moment, the CEO has a solution - if they decide to invest $ 80 million overhead, then there is a possibility that the organization will not see the return on investment. If this is the case, then the nature of the CEO will be questionable - people will begin to wonder how the charitable money was spent in the organization, and why the money did not go to this cause. Therefore, the CEO decides to remain reasonable and sustainable in order to use $ 80 million to build more houses.
Finally, when 80 million. The United States is back to business, we see no change in the aggregate of homeless or financially unsafe, since $ 80 million. US homes are not enough to have a fundamental impact. The illustration illustrates the reason why we have not made significant progress in finding a treatment for breast cancer or ending child poverty in Sierra Leone. In the end, the leaders of charitable organizations are always associated with the inheritance of any risks, even if they were given the opportunity to do so by non-specialists such as Kanye West or Brad Pitt. The CEO of charitable organizations is not even recommended to act independently, distributing capital in areas beyond the cause, because they are afraid of losing the loyalty of sponsors or major contributors.
If LeBron James had a reasonable stake in a company like Walmart, he would not have only a marginal impact on the company's operations, but he would have no contribution, because he made an investment, not a donation. When someone invests in a company, they also invest in management, and not just the usual implied value; In addition, the investor’s contribution to the company will be insignificant, since he simply goes beyond their competence. It seems absurd that LeBron James will have some area of financial activity if he contributes from the private to the non-profit sector just because he believes that he and the CEO are on the same compulsory aircraft. Managers of non-profit organizations should be treated as leaders of private sector companies.
We believe that charities are basically an agent between the happy and the unfortunate - rich stocks with underprivileged and charitable organizations are just a channel for that. This is a complex mentality to adapt; it seems that good deeds should be simple and executed as such. In fact, charitable organizations are complex, transparent organizations that operate similarly to charitable activities in the private sector. Social entrepreneurship cannot flourish as long as its incentives and barriers remain. Leaders in the nonprofit sector need to be given additional autonomy and reasonable risk incentives. The infrastructure of the non-profit sector and the configuration of organizations, respectively, must be modified to ensure innovation. Potential acceptance of more principles related to the private sector may allow non-profit organizations to achieve a parallel between the procedures and performance we expect from them.
Author Simon Sinek is best known for popularizing his concept of the “golden circle”. The Golden Circle is a basic but powerful leadership paradigm. The value of the golden circle lies in the fact that successful leaders are guided by the overarching goal of success - successful leaders. the cognitive process is reverse from most people. Effective leaders think and act in order, why they do what they do, how they do it, and what they do, while most of us endure a sequence of thoughts. Interestingly, the leaders of charitable organizations are the first people who come to mind when I think of people who do what they do because of a deep sense of motivation to do their job - they have nothing to do with money or fame, Charity operates in accordance with the Golden Circle. However, charities were not [relatively] innovative and have not done their work at the global level. Personally, I believe in the golden circle, and I do not believe that it is not applicable to charity. With this in mind, I am convinced that financial, structural and social adjustments in the nonprofit sector can revolutionize charitable organizations. performances.
