Dan Pallotta, the former charity-events organizer who has been crusading to get the media, watchdogs, and donors to stop evaluating nonprofits by how much they spend on overhead, is taking his battle to the streets.
Mr. Pallotta is helping to plan a three-day march next June to raise $1-million for an organization that will help charities fight charges that they pay too much for fundraising, advertising, and executive compensation, expenses he says can be vital to helping groups achieve their goals.
The money will provide the first-year operating budget of the Charity Defense Council, which Mr. Pallotta created to counter negative media stories, run ads promoting the nonprofit field, and act as a legal-defense force.
“There have been a thousand walks for a hundred causes,” says a website announcing the event, “but never a march for the cause of causes itself.”
A Polarizing Figure
Some prominent nonprofit leaders have already signed up to march, including Matt Flannery, co-founder of Kiva, an online microfinance organization. He says complex charities like Kiva are hindered by the notion that their employees should get paid much less than their for-profit counterparts.
“Kiva is a banking organization that needs to move hundreds of millions of dollars every year” and must compete with hedge funds, banks, and companies like Google and Facebook for executives, he says.
But not everyone in the nonprofit world agrees with Mr. Pallotta’s approach. Irv Katz, chief executive of the National Human Services Assembly, a nonprofit association, calls Mr. Pallotta a “fad” and says his colleagues are much more worried about government spending cuts than about negative media coverage that occurs infrequently.
“People in the sector are so looking for a silver bullet they’re willing to hop on anything that sounds exciting without peeling it back and seeing what’s really there,” he says.
The National Council of Nonprofits, which represents nonprofit state associations, has not taken a stand on the march and is focusing on priorities such as the America Gives More Act, legislation that includes several provisions to promote charitable giving, says spokesman Rick Cohen.
Mr. Pallotta has been a polarizing figure since the 1990s, when his former for-profit fundraising company faced a series of disputes with charities and a settlement with Pennsylvania’s attorney general over the amount of overhead charities paid for bike rides and walks the company organized.
Critics charge that he is trying to import the worst practices of the business world, like big executive pay, and that the anti-regulation aspect of his movement could give cover to bad actors.
Nonprofit Allies
Mr. Pallotta points to the result of his company’s events: a net $305-million for AIDS and breast-cancer charities. After writing two books and last year delivering a much-viewed TED talk, “The Way We Think About Charity Is Dead Wrong,” he has gained nonprofit allies. The Charity Defense Council’s advisory board includes leaders of the Nature Conservancy, Goodwill Industries International, Share Our Strength, and United Way Worldwide.
The 60-mile march, scheduled for June 26 to 28, will follow a route from the border of Maine and New Hampshire to Salem, Mass. Registration, at the crowdfunding site CrowdRise, costs $99. Each participant must raise at least $2,995.
Mr. Pallotta says the walk aims to raise $1-million after expenses. (The CrowdRise site sets a goal of $2-million.) If it succeeds, it will provide a huge boost to the fledgling defense council, which raised $11,189 in 2013, according to its Form 990 tax filing. Mr. Pallotta says he has been donating his time to the Charity Defense Council and his marketing firm, Advertising for Humanity, has donated almost $75,000 in creative services. He says the company has no plans to charge for work related to the march.
Dig deeper: See The Chronicle’s 2013 profile of Dan Pallotta.
Editor’s note: This article was updated on September 8, 2014, to include more information.