Uncharitable
Sep 4, 2018 · 2 min read
- Many people think that it’s necessary to earn a lot first and help charities after that. Many people think that it is necessary to choose whether to earn money or work on important problems. As a result, many choose to work in a for-profit sector, as they can achieve there more. As a result, social issues are not solved. However, the history shows us that written above is a delusion.
- There was Palotta teamworks company, which existed from 1994 to 2002. It was a for-profit charity company. Yes, it was a for-profit charity. For eight years of operations they raised more than $556 millon! $305 million were given to charity organizations. Palotta teamworks organized series of events such as all-over USA bycicle rides and others. 180000 people participated there.
- Palotta teamworks worked the same way as for-profit companies did: they purchased expensive ads in NY Times in case it generated profit, attracted funding, invested in their development to achieve higher results and paid their employees competible salaries. For example, several people in a company earned more than 200k $ per year, which is a good salary even for USA.
- These principles are different from those used by charities. However, they worked. In 2002 there were 350 full-time employees and 15 offices were operating. Palotta teamworks attracted $82 million of funding in 2002 and organized dozens of events.
- Interestingly, the main advertisement message Palotta teamworks used was based on participants self-interest, not donating pennies to those in need. The main slogan was “I’mpossible” what made participants show the best they can, not the worst. Palotta teamworks didn’t beg for money, they sold.
- This case is really unique. Dan Palotta teamworks didn’t get large investment from governments as UN has. Also, there was no rich founders and sponsors as in Bill&Melinda Gates Foundation and others case. Besides that, they managed to achieve impressive results.
Conclusion: it is possible to earn doing good. What we need is to find scalable business models for charities.