What? A recent TedTalk featured entrepreneur Dan Pallotta who founded two charities that raised over $300 million for breast cancer and HIV/AIDS. These charities were not long lived and soon went out of business when corporate sponsors and funders heard through the media that 40% of the budget of these charities went into recruitment and customer service. Pallotta commented that “the backlash came from our basic — and wrong — cultural understanding of charity.”
So what? Pallotta suggests a rethinking of charities because he thinks the business world and the non-profit world are forced play by different rule books. He proposes 5 reasons why non-profits are handicapped: compensation, marketing, time, taking risk on new revenue ideas and capitalization on risk profit. I would contend that these organizations need to be more flexible in their organizational structure to address these handicaps. As we have read previously adaptors and innovators are equally equipped to change paradigms. Working together to address these handicaps adaptors and innovators can provide synergy in solving these problems.
Now what? Revolutionary change is needed in the non-profit sector – the importance of innovators to look “outside the box” and propose new and novel solutions should be augmented with the adaptors ability to bring organizations back to homeostasis.