In a recent conversation I heard a local business owner shrug off a risk he was taking by saying ‘you have to spend money to make money’. True for the for-profit sector but can we say the same for the not-for-profit sector? My visceral response is an unequivocal, uncompromising ‘no’ – we spend money in the not-for-profit sector to generate social change or impact.
However, Dan Pallota’s recent Ted Talk (the way we think about charity is dead wrong) has me rethinking this simplistic position. In his presentation he mentions the massive and complex nature of the social problems facing our society and that our NPOs are not able to achieve the growth and scale necessary to effectively impact them. Most compelling for me was his mention of the $50 million annual revenue barrier.
Since 1970, 46,136 for-profit organizations crossed the $50 million annual revenue barrier……while only 144 NPOs reached the same scale.
Take the 20 minutes to listen to his ideas and arguments and I leave you with this parting question; what impact would 1000 NPOs have if they were able to achieve and maintain the scale of Coca Cola or McDonald’s?