The Flaws of Focusing on Low Overhead and Compensation

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The chapter explores the flaws in prioritizing low overhead and compensation in the non-profit sector, highlighting the lack of conversation about impact and problem-solving effectiveness. It challenges the misconception that high compensation is detrimental to the organization and emphasizes the importance of rational examination and competitive salaries to attract top talent.

Dan Pallotta, Chief Humanity Officer of Advertising for Humanity and author of Uncharitable talks with EconTalk host Russ Roberts about the ideas in his book. Pallotta argues that charities are deeply handicapped by their culture and how we view them. The use of overhead as a measure of effectiveness makes it difficult for charities to attract the best talent, advertise, and invest for the future. Pallotta advocates a new culture for non-profits that takes the best aspects of the for-profit sector to enhance the mission and effectiveness of charities.