News of the World (Nomads)

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Opinion - The Sin in Doing Good Deeds - New York Times

AUSTRALIA | Tuesday, 30 December 2008 | Views [520] | Comments [2]

I've just read an excellent article by Nicholas D. Kristof and placed an excerpt below.

"If a businessman rakes in a hefty profit while doing good works, is that charity or greed? Do we applaud or hiss?

A new book, “Uncharitable,” seethes with indignation at public expectations that charities be prudent, nonprofit and saintly. The author, Dan Pallotta, argues that those expectations make them less effective, and he has a point.

Mr. Pallotta’s frustration is intertwined with his own history as the inventor of fund-raisers like AIDSRides and Breast Cancer 3-Days — events that, he says, netted $305 million over nine years for unrestricted use by charities. In the aid world, that’s a breathtaking sum.

But Mr. Pallotta’s company wasn’t a charity, but rather a for-profit company that created charitable events. Critics railed at his $394,500 salary — low for a corporate chief executive, but stratospheric in the aid world — and at the millions of dollars spent on advertising and marketing and other expenses.

“Shame on Pallotta,” declared one critic at the time, accusing him of “greed and unabashed profiteering.” In the aftermath of a wave of criticism, his company collapsed."

Click here to continue this article.

The article raises all sorts of questions, particularly as a for-profit company that has invested a significant amount in our own corporate social responsibility program, The Footprints Network.

Without the support of WorldNomads.com, Footprints would never have been created and raised over $500k from over 180,000 donations.

On the other side of the coin, Footprints has allowed us to speak to, partner with and work on behalf of many organisations that we'd never normally have the chance to. Have we profited? in that regard yes, do I feel bad, not in the least. I have immense pride in what we've achieved through both WorldNomads.com and FootprintsNetwork.org and know we would never have managed it were it not for riding on the back of travel insurance transactions.

Sustainability of our core business enables sustainability of our philanthropic endeavors. Simple as that.

Is your company running a CSR program?, please share with us in the comments section below

Chris Noble
General Manager
WorldNomads.com
chris[at]worldnomads.com

Tags: philanthropy, new york times, nicholas d. kristof, footprints network, world nomads, worldnomads.com, nonprofit, charity

Comments

1

The original post by Kristof has really got my mind whirring. There's a huge spectrum of possibility with regards to 'doing good' and how that it funded. With caution, consider an all out for-profit model ... but take heed of 2008's massive corporate downfalls (headed by CEO's paid squillions for their 'expertise'). At the opposite end, a host of tiny NGO's run entirely (and probably unsustainably,) by volunteer labour. And then there's a huge range in the middle who also struggle to find a best-fit. There is no one-size fits all model for 'Doing Good' and nor should there be. There is room enough for us all.

Having co-founded Footprintsnetwork.org and run the day to day activities for the past 4 years, our model is based on making a profit first (in the for-profit arm of the company) and using those resources and sharp-business-thinking to fund a not-for-profit venture. What gives the contributors faith is that because of this set-up, 100% of donations are passed onto the projects - countering charity-fatigue is a big part of the success. I think people have a right to know where their money went and what the outcomes were.

Footprints with it's e-commerce connection and microdonations is part of a new online philanthropy movement. This CauseWired world is moving fast! It's clear to me that new organisational models are badly needed. And governments, corporation law and charity/fundraising laws will need to catch up... Quickly!

If I had one wish for 2009, it would be to find a comfortable organisational structure that adequately described our model.. we raise funds in 7 different currencies across the globe (um, tax deductible in who's jurisdiction?). We want the freedom to make grants globally too... not just to AusAid accredited charities... and don't want to incur company-tax on that (I mean, how do you pay the tax when 100% of funds go to the project?). And we're totally happy to be transparent in our reporting, our relationships, be audited and be held accountable for the money. We're doing all this anyway... but it'd be nice to fit in better. :-)

Anyone have any thoughts about this?

Christy McCarthy, Community Manager, WorldNomads.com and co-founder of Footprintsnetwork.org

crustyadventures Dec 30, 2008 9:24 AM

2

For me, the question isn't if you are for profit or not, but are you doing what you claim to do. Is a company marketing itself as an organization which is "doing good" and giving large scale support to the causes it shows on its website and then not following through with significant support? For profit or not, if they are using images on their website which tug at the heart strings (children in orphanages, the world's poor, etc) and yet are keeping the profits and only passing a small amount on, they are not an organization I want to support. If a group is transparent about where their funding is going, saying "5% of our profits go to XXX cause" or "20% of the funds you raise for this ride go to supporting Aids research" then that is ok in my book. Being transparent so that people know what they are signing up for is the key. Kristof's reference to the Aids ride is one of those groups which has crossed the line, in my opinion. Not because they are only giving a small amount of their profits to Aids research, that is ok, but because they are MARKETING themselves as a charity ride and the small percentage which goes on to the cause it not transparent on their site.

The more transparent we can all be, non-profit or not, the less complaints we will get from people who feel like the did not get what they signed up for. Running PEPY Tours in Cambodia, I am faced with this on a regular basis and we are working to make our site and our programs more transparent as well.

Daniela Papi Dec 30, 2008 2:02 PM