1. Scott says

    It’s a shame that we crucified the AIDS Ride. Having completed two marathons for my local ASO, there’s nothing more fulfilling than an endurance training program.

    He’s right, we limit non-profits by hammering them with the overhead.

  2. David Hearne says

    My criticism of non-profits can be demonstrated by a single organization: The Human Rights Campaign.

    • They solicit money from “members” who make on average minwage to $30K per year… but pay the director a salary that seems pegged to the wages of a US Senator.

    • The bulk of the donors, who are mislabeled as “members” have no say in the direction or operation of the organization and do not get to vote for officers.

    • The organization deviates from gay rights with some regularity, thus using donor money for causes the donors have not agreed to.

    • They use volunteer labor to “keep expenses down” when in reality they often use volunteer labor so that they can spend the money in ways which enhance the power of the paid employees.

    • They justify their excesses by claiming in essence that “everyone else does it this way” or “the industry standard is this” or “The director would be paid much more if this were a for-profit.

    Well it’s not a for-profit… at least it’s not supposed to be. It’s profitable to the people who are paid. It’s profitable to the people they choose to do paid business with. The more you look at it, the more it looks like a scam.

  3. says

    Okay, he may have made some mistakes in the past, but that was one of the most impassioned pleas to change the paradigm of charity, which is an industry deliberately being held back by the for-profit competition that don’t want your dollars going anywhere but into their pockets, the market isn’t inherently bad or ‘evil’, the people running it for their own selfish purposes are, by reducing the effort to base profit motive instead of living up to the social contract by which all civilisations flourish

  4. Steve says

    The charities dumped Dan Pallotta for good reasons. He charged one event for his costs in other events. You couldn’t participate in the final years of the AIDs Rides without being marketed other Pallotta events, and having to sit through a lot of new age self-empowerment drivel that had nothing to do with AIDS.

  5. KT says

    The problem with many charities and organizations today is the fact that so many of people who lead aren’t activists; they are career minded people who are always looking for the next opportunity. Look at Joe Solmonese of HRC. During Obama’s first couple of years, HRC never held the president’s feet to the fire; they kowtowed, kissed ass, and ignored so many problems that it took other groups, like GETequal and OutServe to get things done. Then Solmonese announces he is leaving HRC to become an Obama co-chair. Surprise, surprise. One wonders if the meetings HRC had with the White House were about LGBT rights or just a way for Solmonese to get his foot in the door (his replacement Chad Griffin isn’t exactly the great Gay Hope everyone thought he would be either).

    So many of the people who run these charities receive salaries in the hundreds of thousands, fly first class, and basically are there to sign their names to press releases written by underlings. If they are ever confronted by this, they claim its the industry standard. They are more confortable at a gala event than actually doing work in the trenches.

    And I’m sorry – but why does a charity need 350 workers? How much donations were needed just to pay salaries? Unless its an org the size of the Red Cross or Doctors Without Borders, which is doesn’t sound like this org was that does sound like a lot of overhead.

  6. anon says

    Charities exist because of the way tax law is written. However, there are no “non-profit” or “not-for-profit” entities. They are all “maximize-cash-flow” operations and run for the benefit of the managers. We’ve created an illusion in the tax code that shouldn’t exist.

  7. KT says

    I’ve been reading more about Pallotta and must admit that some of his ideas are good, such as increased marketing and visability. But his naked desire to make money off of helping people is sickening to me. He literally said he doesn’t see why people don’t villify those who make a million off of hurting people but villify those who make a million off of helping people. Umm, we should villify both those people in my opinion. If you see thousands of starving people, and you think “how can I help those people and make a cool million in the process”, you have some screwed up priorities in my opinion.

  8. ratbastard says

    “Charities exist because of the way tax law is written. However, there are no “non-profit” or “not-for-profit” entities. They are all “maximize-cash-flow” operations and run for the benefit of the managers. We’ve created an illusion in the tax code that shouldn’t exist.”


    “Dan Pallotta is an excellent marketer and businessman; he realized great, personal wealth off the epidemic through the AIDS Rides.”

    Posted by: Kile Ozier

    ^ THIS ^

    [The ugly truth is many forms of ‘Charity’ are accounting scams, and many non-profits are fronts.

  9. ratbastard says

    That being said, he does make some legitimate points. If ‘Charities’ are to be managed like he suggests, they first and foremost shouldn’t be called ‘Charity’, the same way many people who say they volunteer really are either coerced [forced by their employer] to ‘Volunteer’, or do it to pad their resume. And then there are ‘Volunteers’ like Americorps who get paid to ‘Volunteer’.

    Just stop all the bullsh*t, already.

  10. Michael says

    Did any of the others who left comments even listen to Pallotta’s presentation? His fundamental argument is how can the non-profit sector be expected to have any impact on massive health and human services problems like HIV, poverty, hunger, homelessness and so on if the lens through which we view the sector discourages non-profits from making the kind of large investments needed to achieve the type of scale required to effectively address such problems?

    As someone who has spent two decades working in the non-profit sector, I can assure you much of what he says represents a reasoned argument for a real change in our approach to philanthropy in this country.

    M. Hayes

  11. Sargon Bighorn says

    People posting seem to want the Monastery Brothers to do the non-profit work; no Pay, no benefits, no visibility, just the love of it all. Making money off the poor, the sick, the down trodden does sound crass I’ll grant you that. This is a tricky balancing act. Should the Exec Dir. make 400K a year like the young MBA (who has talent) while that some of money could be used to say, feed the hungry. WHO should get the money is the question.

  12. ratbastard says

    To extrapolate, why is the huge sums of $ spent on government[s] funded social services and our so-called welfare state [huge sums], not enough? Why is hundreds of millions spent to combat homelessness in NYC for example [supposedly 60,000+ people] not enough? And I understand this includes ‘Charities’ who receive government funding, but you get my point. Hundreds of millions to help 60,000+ people.

    Many people question why so much $ is spent in government funded schemes to little avail, and why do many non-profits have well paid and compensated executives, but still beg and lobby for more and more $ to ‘fix’ the problem at hand. It seem to many people that it would appear no amount of $ is enough. Many people suffer from so-called Charity Overload. They are legitimately frustrated and jaded.

    And on a side note, so-called Poverty Pimps are not an urban myth, they are real. Many individuals in the public and private sector have vested financial interests in not fixing the problem at hand. This is a toxic stew in more ways than one.

  13. scooterpdx says

    I am sick and tired of people thinking that Dan Pallotta “invented” the long distance AIDS rides. Mark Landsfeld did an AIDS ride from Alaska to Florida in 1985 and I organized a group of 18 cyclists on an AIDS ride from New York to San Francisco in 1986 (for which I got paid $0). Dan is an opportunist who made money off the suffering of others.

  14. JB says

    I did the first HIV Vaccine ride and raised more than $4,000 with only $400 of that going to the charity – yes it was a great event and met some wonderful people – but it made me sick how little actually made it to the benefiting organization. Pallotta makes some good points, but I question his integrity (and the fact he branded the events with his own name I found incredibly egotistical).

    One thing that does address his point is social enterprise (for-profits doing good – often called B-corporations). And another aside, our local HIV Vaccine ride here in Atlanta gives 100% of the donations to the Emory research – as does New Orleans Halloween fundraiser for Lazarus house.

  15. Tre says

    For it to be successful, AIDSRide had to be a business. And man – was it ever successful. Over 11 million dollars was raised that went DIRECTLY to the care of people with AIDS. To orchestrate those kind of rides, with that amount of support takes money. Dan Pallotta is only guilty of having a rather large ego. The fact that people on here attack him is beyond shameful. He and his company deserve to get paid for the amazing work that they’ve done. Without him, there would be no 11 million dollars.
    Pallotta Teamworks was upfront about their business practices – how many people just raised the bare minimum to do the ride? If theres going to be blame, then the blame needs to be shared at least with the participants who didn’t hold up their end of the deal.

  16. Steve says

    Anyone who thinks Pallotta deserves praise for his work on the AIDS rides never saw the books. People who raise money for charity hold that money in a fiduciary capacity. Pallotta never understood that, and this talk shows he still doesn’t understand it.

  17. Greg says

    “Who cares what the overhead is if their raising money for the charities”

    That’s a fundamental flaw in his logic. He was talking private jets all over the US. I agree that investing in fundraising can increase the fundraising pool. I agree that overhead should not be demonized. But extravagant lining of pockets should not be part of “overhead”. I think there is some truth in what he’s saying but the guy was a crook.

    I’m an AIDS/LifeCycle rider, which is the ride that replaced the California AIDS Ride. We raised $12.6MM in the last ride, a much more significant percentage of which goes to charity than under Palotta Teamworks.

  18. sfbob says

    I participated in several Pallotta events, following which I was one of those who signed a letter to the San Francisco AIDS Foundation requesting that they sever their connection with Pallotta TeamWorks. Yes the rides did good things, and I participate in the legacy events to this day. That doesn’t justify all or most of what Pallotta says and in particular his idea that overhead should not be a concern. As others have noted, overhead is very much of a concern. The most successful of Pallotta’s rides, California AIDS Ride 7 in 2000 returned over 65% to the beneficiaries; that proportion dropped to 50% the following year for no other reason than Pallotta’s hubris. AIDS/LifeCycle consistently returns 63% to 66% of its proceeds to the SF AIDS Foundation and the LA Gay and Lesbian Center. This figure is considered to be quite a reputable one (given the size and complexity of the event) and is all you really need to know. If there’s any area where Pallotta excelled, it was on the logistics side. That information, having been created, is readily passed on to others who are a bit less concerned with making a profit.
    If we are going to rail against the way we raise and spend money on causes we are better off noting our society’s own priorities rather than complaining about policy issues that “hamstring” non-profits relative to profit-motivated outfits. When all is said and done, the reason charity events such as the AIDS rides exist is that we don’t have the will as a society to direct adequate public funds to research, treatment and prevention efforts. Instead we spend the bulk of our money on a monstrously inflated military budget.

  19. AngelaChanning says

    While Pallotta does raise some important questions, in the current environment, they are impractical. It is unlikely there will be reform in the way charitable donations are treated in the tax code. Donors to charities do not have the risk appetite of business investors. Charitable ratings agencies are not going to change their assessment standards to suit his claims that paying corporate level salaries will bring higher returns. In fact, the business highway is littered with bankrupt companies where the CEO got a golden parachute. Fiscal prudence is always going to be part of the non-profit culture.

  20. blonder says

    Good speaker. You need a businessman these days to get/keep an NPO going.
    Isn’t the bottom line “how much money was raised after expenses?”
    Aside from that he is clearly well educated, well spoken and damn cute.

  21. David Hearne says

    Isn’t the bottom line “how much money was raised after expenses?”

    Posted by: blonder | Mar 13, 2013 12:04:10 AM

    That’s what these alleged charities keep telling us. However, the common sense answer is “No.”

    Here’s why: If you donate $120 to WEDU tv station and get a six CD set of Big Band Music only $60 of your donation is tax deductible as the value of the CD is not considered part of your gift, it’s consideration.

    The expenses of a charity are those which are necessary for fund raising. As a rule, we don’t consider luxurious suites at top of the line hotels to be the mark of an executive who is concerned about the charity maximizing the impact of donations on the alleged beneficiaries of that charity.

    It’s one thing for Vicky Bagley to use her charity to promote her real estate business and quite another for her to give a sweetheart catering contract to a buddy who will then do her daughter’s wedding for free. Not that she did that, just pulled her name out of the time machine.

  22. Vic says

    Look, the math is simple. This man’s CAR rides did not return very much money to the beneficiaries. That truth is well known. It did go into his businesses and his pocket.

    The current AIDS Lifecycle, figured out how to run the same ride with less overhead and return over 70% to the beneficiary. 70%!!!! HOw did they do it? Lots of volunteers. Fewer paid staff and a lot of dedication to a CAUSE.

    This man is angry and bitter. And this talk and his logic is just wrong.

  23. BC says

    This is completely flawed logic. How did this guy get to be a TED speaker? He forgot to mention one HUGE difference between for-profit and non-profits. For-profit businesses SELL products and services to customers who WANT a product or service. Non-profits rely on people to choose to give money for nothing (or very little) in return. That’s it. That’s the difference. And that’s why for-profit businesses make so much more than non-profts: they provide a good or service that people want! Sheesh.

  24. David H says

    Dan Palotta got rich off the backs of people with AIDS. The AIDS rides were a money-making scam.

    His personal profits were in many cities higher than the amount of money raised for the AIDS Service Organizations. And the actual overhead was MASSIVE. Several AIDS organizations went out of business because of the money they lost on the walks, while Palotta still made massive profits from them.

    THAT is why the organizations stopped working with Palotta on the AIDS rides and breast cancer walks (which, of course, he trademarked to try to prevent anyone else from doing similar fundraising efforts.)

    He is a greedy man who is now trying to justify his greed. This entire video is a massive justification of the greedy way he runs his business, trying to con others into getting into bed with him to make him even richer.

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