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Richard Krooman

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Doing the math

Quite a few people in the replies to Dan Pallotta's talk have noticed that the math shown is somewhat odd from time to time.

So let's discuss this in a seperate conversation rather than in the video thread.


My personal opinion (in this post) is irrelevant, I'll take a possition myself in the debate though but want the starting post to be as neutral as possible.

Because I would like everyone to use the same numbers I've went through the vid and wrote down all numbers he uses on his slides (I made the 'topics' of the slides myself as his slides didn't have any topics):
Poverty:
12% poverty in the USA

Salary in profit vs non-profit organisations:
Stanford MBA (at age 38) = 400.000 $
CEO of a medical charity = 232.658 $
CEO of a hunger charity = 84.028 $

AIDS rides bicycle (over a course of 9 years):
182.000 cyclists raised 581.000.000 $

Charitable giving in USA:
2% GDP (300 billion)

organisations crossing the 50M $ annual revenue barrier since 1970:
144 non-profit
46136 profit

Launch AIDS rides:
50.000 $ (risk capital)
108.000.000 $ after 9 years (and after expenses).

Breast Cancer 3 days:
350.000 $ investment
194.000.000 $ after 5 years (and after expenses).

Overhead:
5% overhead for a bake sale.
40% 'overhead' (or investment in growth) in a company.
(would anyone know what a non-profit organisation spends on average on 'overhead'?)

Current charity balance (where the 2% GDP goes to):
20% of charity goes to Health and Human services. (60Billion $)
80% of charity goes to Religion/Education/Hospitals. (240Billion $)

Wish/Future:
3% GDP (450Billion or an added 150Billion ontop of the before mentioned 2%).

Topics: charity math
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    • Mar 13 2013: Concerning free publicity: Someone has to organize a flash mob, get the word out, figure out what's going to happen, get permission at the location you're going to have it. So you are still paying for this.

      Door to door knocking: Again, someone has to recruit volunteers for this, train the volunteers, provide them with the materials they need, organize the day so the volunteers know what routes to take and doors to knock on, probably want to supply volunteers with t-shirts and some kind of credentials so the homeowners realize this is a legit thing. You're probably going to have to provide snacks and drinks as well, or put in the time to get sponsors to do it. Are you just sending volunteers out willy-nilly or have you got a targeted area? I don't know about you, but I don't have many charities knocking on my door.
    • Mar 14 2013: "My money is going to a charity who is helping the cause, and not a charity who's main goal is tripling it's money and after that they might look at the cause."

      With all due respect, I think this is short-sighted view and Pallotta addresses this type of thinking directly. You seem to paint people whose goal if tripling money for the cause as somehow not caring about the cause. NGO's NEED some business-minded people who can raise revenue to support the cause.

      Here is a hypothetical question I would like you to answer, pulled directly from Pallotta's talk: Which charity is doing more to solve an issue: The charity that spends 10% on overhead/fundraising and 90% on solving the issue, but never nets more than $5,000,000 total, or the charity that spends 30% on fundraising/overhead and 70% on solving the issue, but each year they grow by $5,000,000? In 10 years, the 70/30 charity is putting $35,000,000 toward solving the issue, while the 90/10 charity is still only putting $4,500,000 toward the same solution.

      So which charity is spending it's money more wisely? 70/30 or 90/10? For me, the answer is clear.
      • Mar 14 2013: The question is where is this extra money coming for the 70/30? If the donation pool is fixed at 2% then you have to assume that the 70/30 makes more by redirecting money that would have otherwise been given to another charity, possibly a 90/10 charity. In fact very likely if your spending alot more on marketing then the 90/10 charity. If this is the case then you have just taken money out of the charity system and put it in to the marketing industry.
        • Apr 1 2013: The point is that with effective marketing, the donation pool would grow. That this is not a zero sum game.

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