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Gender Trouble at Nonprofits
Seven out of 10 nonprofit workers are female. Charity expert Dan Pallotta argues that sexism is holding back the entire sector, preventing nonprofits from adopting aggressive business practices.
Unequal pay for equal work. Patriarchal control and oversight. Those disparities, associated with gender discrimination in the home and workplace, also undermine the world of charity, whose workers are overwhelmingly female. Society has two rulebooks; one for charity and one for the rest of the economy. This apartheid discriminates against the nonprofit sector at every level.
Consider: The for-profit sector is free to pay competitive wages based on the value people produce, yet it’s considered unseemly for anyone to make money in charity. This forces our brightest young men and women to choose between doing well and doing good, and drives most of them, burdened by student debt, into for-profit careers.
The for-profit sector pummels the public with ads for Budweiser and Botox, but donors don’t like their funds used for advertising. So the urgent causes of our time are at a hopeless disadvantage when it comes to building market demand.
Charity is subservient. The for-profit sector heads to the office every day to do the real business of the world, while charity stays at home and dabbles in idealism and sentiment.
For-profit companies take huge risks and tolerate spectacular failure in pursuit of new customers and gigantic profits, but if a charity event doesn’t produce a 70 percent return in year one, donors want the attorney general to investigate. This aversion to risk stifles learning, innovation, and change.
The for-profit sector can take years to develop products and markets, but a charity’s overhead is measured in 12-month cycles, which means that nonprofits can’t enjoy the fruits of revenue-generating ideas that might take a decade to develop.
And last, the for-profit sector can use profit to attract capital. By definition, the nonprofit sector cannot. It is limited to the donation as its only financial instrument. So the for-profit sector monopolizes the multitrillion-dollar capital markets while charity is starved for growth and risk capital.
• Dana Goldstein: The Health-Care Gender GapFor more than a decade, the trendy admonition to charity has been to “act more like business.” That’s disingenuous. Society bars charity from the most elemental business practices. “Act more like business” really means, “Draw more blood from the stone”—do more with less—the opposite of the for-profit sector it-takes-money-to-make-money credo. Little wonder, then, that the nonprofit sector represents just 5 percent of the economy. The number of nonprofits that have crossed the $50 million revenue barrier since 1970 is 144. By contrast, 46,136 for-profits have crossed it.
Charity is not allowed to use the same tools as business because society subconsciously regards it as female, and discriminates against it the same way it has historically discriminated against women. Charity is subservient. The for-profit sector heads to the office every day to do the real business of the world, while charity stays at home and dabbles in idealism and sentiment. Even the governing structure of charity is patriarchal; business people direct direct nonprofit staff—seven in 10 of whom are women—from the perches of their board seats.
The parallels between the world of charity and the role of women are no coincidence, and have their roots in American history. Women also outnumbered men two-to-one in the pews of 17th-century Puritan New England churches, and what women learned in those churches was that self-interest was a sin, and only extreme acts of self-sacrifice could secure them a place in heaven.
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Jacob Bernstein is a senior reporter at The Daily Beast. Previously, he was a features writer at WWD and W Magazine. He has also written for New York magazine, Paper, and The Huffington Post.
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Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
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Jeff Madrick is a contributor to the New York Review of Books and a former economics columnist for the New York Times. He is editor of Challenge Magazine, visiting professor of humanities at Cooper Union, and senior fellow at the New School's Schwartz Center for Economic Policy Analysis. He is the author of Taking America, The End of Affluence (Random House) and The Case for Big Government.
An interesting analysis, much of which I agree with, but your conclusions have some holes. Everything in the private sector can be measured with numbers, because the ultimately the goal is to turn a profit. That's not the point of nonprofits. How can you tie performance to dollars when the nonprofit's outcomes are usually not measure in dollars? Also, I believe there is a strong argument to be made that rather than nonprofits behave more like businesses, businesses should behave more like nonprofits. If the businesses culture better recognized that beyond their responsibilities to their shareholders, they also have responsibilities to create jobs and look out for the well-being of their customers, perhaps we wouldn't be in the economic mess we are in now.
Dan, you have me laughing out loud on this one. Too true and too funny. There is another part to this as well, that to volunteer or work for a non-profit suggests to some that you are just a bleeding heart without ambition. I have ambition-- to make major impact on the fields I am working in. I have forwarded your blog my friends that work in social transformation organizations. Thanks for helping to wake up the world, Dan.
Really? Economic rights for charity? Charity is "female", and for-profit is male? What is PBS, and other public service sectors then? Is Charlie Rose transgendered?
I think it would serve Dan Palotta's purpose a whole lot better to not utter absolute nonsense. What is the point of introducing the concept of "gender", economic equality and invoking feminism in a discussion of twenty-first century charities and their lack of self-promotion? Wouldn't it be better to just say for instance: "Charities today are hindered by the public perception of their work"? That is in fact a proposition that reasonable people can discuss. Whereas ...
"It's time now to undertake a similar movement to win equal economic rights for charity: Equal pay, equal ability to spend on marketed, and to use financial incentive to attract capital and reward risk, no matter how uncomfortable that kind of equality might make us feel."(sic). The similar movement here being the feminist tactics of the seventies. How does the Red Cross go and liberate itself? How does it indeed?
I rarely comment but I have recently made a pledge: To always confront BS when I see it.
Mike,
I think you're going a little far in describing an effort to get at the root of certain dysfunction in the way we create social change as "utter nonsense." In writing "Uncharitable" I spent many painstaking months researching the early Puritan settlers to New England and their ideas about charity and how those ideas survived to the present day. It's very clear from that research that charity served an ameliorative purpose for them - that it functioned as a counter-balance to their extreme profit-making tendencies, and that it was made subservient to the rest of the economy, in the same way women were made subservient to men. Puritan culture was dominated by men. It's clear that today charity is still subservient to the rest of the economy, and that, as a result, it is ham-strung by all kinds of counterproductive prohibitions. And these are life and death issues, not academic ones. I think it's important that we understand the roots of these prohibitions, in addition to simply stating them.
As for your question, "Wouldn't it be better to just say that charities are hindered by public perception?" believe me, I do say that, all day long, and have written a book about it. I don't know why you would be offended by an exegesis.
"How does the Red Cross go and liberate itself?" By educating its board members and donors on the notion that impact is more important than administration-to-program ratios, by teaching its constituents that overhead and performance are correlated, and by teaching any number of other things to a public that has been taught a backward philosophy of social change all centered around overhead. Indeed, the only way the sector will ever get liberated, or will ever be able to create the kind of change we all really dream about, is by organizations like the Red Cross taking the lead.
In my opinion, whatever limits (compared to the business sector) there may be for charities, regarding building market, percent return on activities, investment for the future, general operational efficiencies, and specific sound business practices and tools, have nothing at all to do with gender.
There are things non-profit organizations simply cannot do which are second nature to businesses seeking to improve their bottom line. To my way of thinking, those things have nothing to do with women. Gender has nothing to do with the fact that non-profits cannot "act like a business." But, they certainly can "act businesslike."
There are indeed many similar and interchangeable tools and components comprising the marketing of a commercial product and the services provided by a non-profit organization---and for fund-raising. But at the beginning and the end of that marketing process the differences are as wide apart as they can be. And they are practical and understandable. That's why we have the for-profit and non-profit sectors in the first place.
--- A for-profit (business) has a Mission to serve the market, which means its reason for being is to provide something of value and at the best price and quality in the marketplace.
A business is bottom-line-driven. The results are based on a goal to profit and a return on investment for its shareholders. (Easy to quantify and measure.)
--- A non-profit (charity) has a Mission for the public good, its reason for being is to provide something of value in life.
A non-profit is not bottom-line-driven. The results are based on a goal to provide needed services and to increase and better the quality of life for the recipients/beneficiaries. (Highly subjective, next to impossible to measure.)
To operate at optimum effectiveness, a non-profit needs to work to maximize its potential to produce income---within the confines of its Mission Statement. This is a very important distinction from a business free to "retool" and "reposition" in the market at any time.
Act more like a business, or be more businesslike?
At the Cleveland Orchestra, when we were subjected to questions regarding our limited profit-making capabilities relative to the making of nuts and bolts, we responded half-jokingly that we could not increase our productivity or efficiency with an eye to greater products, even if we played a Beethoven symphony faster than it was played 200 years ago.
We could not speed up our assembly line, nor could we reduce the number of violinists required through automation. If the "widget" we produced was symphonic music, we could not cut costs by turning ourselves into a chamber orchestra and still produce our symphonic-music "widget."
Unlike a business having a "lost leader," we had nothing to "sell" below cost in the hope that "customers" who bought it would also buy other profit-making things.
Unlike for-profits, which usually thrive and aggressively pursue new and expanding markets, our Cleveland orchestra could not work to build market demand out of our area of service. We would have been in competition with like organizations performing in their own communities. The respective other communities' civic pride would always win out. And, duplication of effort does not work well with the wishes and guidelines of donors and other granting entities.
We had no money, nor the need, for future "R & D," when our hard and fixed costs were at home, year after year paying the salaries of 105 of the world's best musicians.
Businesslike, yes. Like a business? Not a chance---no matter with a she or he at the helm.
Tony Poderis
Tony,
Your arguments are based on terribly flawed assumptions. Also, you write as if your certainty about them makes them so. Let's go down the list:
1. "a for-profit has a mission to serve the market and a nonprofit has a mission for the public good." They're not mutually exclusive. In fact, they're practically the same. Many, if not most for-profits make profit because they serve the public good - food, fuel, housing, computers, etc.
2. "A non-profit (charity) has a Mission for the public good, its reason for being is to provide something of value in life." You don't think that Apple, Toyota, Home Depot, Levis, Bristol Meyers Squibb, or Chiquita provide anything of value in life?
3. "A non-profit is not bottom-line-driven. The results are based on a goal to provide needed services..." That is their bottom line, and more and more their customers are asking them to measure it and buying or not buying their services on the basis of that bottom line.
4. "At the Cleveland Orchestra, when we were subjected to questions regarding our limited profit-making capabilities..." Orchestras should not be nonprofit in the first place. They provide entertainment the same way Bruce Springsteen does. They don't deserve a tax advantage. Here again the ridiculous binary system the Puritans developed rears its ugly and illogical head.
5. "Unlike a business having a "lost leader," we had nothing to "sell"" Yes you did. You had concert tickets to sell.
6. "Businesslike, yes. Like a business? Not a chance." What on earth is the difference?
7. "no matter with a she or he at the helm." Nice ending, despite a really problematic argument.
Mr Palotta,
It would be terrific if you would stop peddling your patently wrong and uninformed descriptions of Puritan theology and its impact on American thinking. First, Puritans like virtually of the reformer movements held salvation by grace, not by works as their foundational principle. While the Puritans put more emphasis on good works as a sign of a person's "election" and salvation, they were just that--a sign of a person saved by grace, not a mechanism of salvation. Second, early American religion was very diverse and Puritanism accounted for a very, very small part of the religious influences in the country. Attributing any particular attitude held today to a (flawed) understanding of a particular sect more than 300 years ago is silly.
On the more substantive matters of your argument, you can point to sexism but Occam's Razor would suggest a far simpler explanation. Donors have a hard time measuring the value of the actions of non-profits since they typically do not receive the value themselves. Most non-profits operate relatively opaquely. Therefore, donors do not trust that non-profits are spending money wisely--and this is the only measure they have available to them. So they default to demanding low overhead costs. Low overhead costs mean low salaries. The proof: donors apply the overhead cost ratio and CEO-pay metrics to all non-profits not just the ones with female leaders.
This was thought provoking, thank you Dan. In my 10 or so years experience as a nonprofit manager, I've had the experience of it as a sector of people who care, which feels feminine to me. There was one exception to that, when I worked in a few church-religious environments. Those were more masculine, and there were more men on the board. All the other nonprofits I worked at seemed more feminine to me.
In once nonprofit I work in, the Director is male and he is the creative leader in the office. He makes less than I do (I am female). In that office there are three other men: one straight, one gay and another cross-dresses.
From what I've experienced, it does seem that the for-profit sector is more manly and competitive.
So this distinction between male and female in the two sectors resonates with me.
The US is in an unsustainable situation where we need to create systems that care about each other. We need to find a way to get along with each other better, and that will require a bit more of our feminine side.
TimOgden,
First, I think it's a riot that everyone disagreeing with me is male.
Second, you will need to study upon your Puritan history and/or logic. Yes, salvation was by grace, not by works, but if you didn't do the works you were proving that you didn't have the grace, so they were constantly obsessed with proving to themselves, by works, that they had grace.
Third, and this is not from me, but from the renowned Puritan Historian Perry Miller, who notes that, among all the "isms" that have influenced American culture, from rational liberalism to frontier individualism, "Puritanism has been perhaps the most conspicuous, the most sustained, and the most fecund," and that its force has been "accentuated because it was the first of these traditions to be fully articulated, and because it has inspired certain traits which have persisted long after the vanishing of the original creed." Miller goes so far as to say that, "Without some understanding of Puritanism, it may safely be said, there is no understanding of America."
As for your Occam's Razor argument, the measure does not drive the restrictions, the philosophical restrictions are what led to the measure. Prohibition on making money in charity pre-existed admin-to-program / overhead ratios by about 400 years.
I am frankly shocked that a scholar of Puritanism claimed that his discipline was the most important influence on American thought. Who would have thought?
The strain of making up for greed via good works is as strong or stronger in Judaism, Catholicism, Hinduism, Islam, Deism, and virtually all forms of religion as it is in Puritanism. The outgrowths of the protestant reformation are among the few religious traditions that make a nod toward grace or its equivalent. So again, you've got Puritanism wrong and are barking up the wrong tree in trying to assign that view today to a Puritan ethic.
The Puritan view of grace proved by works is essentially the same argument that you are making: Judge an organization not by what they claim to do or how they do it but by what they get done. So, I guess we should start calling you a Puritan and saying that "Dan Palotta, by perpetuating Puritanism, is part of the problem."
You're also wrongly confusing "making money" in charity with salaries, overhead and sexism. Just because the phrase "overhead ratio" didn't exist 400 years ago doesn't mean people didn't have concerns over how the money they were giving away was being spent. Additionally, the majority of charitable organizations today and for the last 400 years have been run by men (today I believe it's upward of 70% of large nonprofits have male CEOs and predominately male boards). We didn't shift to low salaries for charity work when women entered the work force.
The basic fact is that people have always underestimated how difficult it is to truly help people in need and therefore they don't value the skills of those who perform the work and therefore they aren't willing to pay high salaries for those skills. I'm not saying that's right, I'm saying sexism is irrelevant. It's a wrong perception of the difficulty of doing the work--a perception for the most part that has been perpetuated by the charities themselves with language like "for just a $1 a day you can change a child's life" or "with just a $100 loan a poor woman can work her way out of poverty, feed her children, send them to school, pay for healthcare, and invest in the future."
TimOgden,
Hey I appreciate the dialogue. We agree to disagree on some of the root influences...take a look at the section in my book when you get a chance and maybe the number of coincidences will shift your thinking...
In any event, while I think the "why" is important, in therapy or social history, I've always felt that the "what" is more important, and the what here is that we have two economic rulebooks, one for charity and one for the rest of the economic world, and that apartheid isn't doing social change any good.
As someone with a Master's in History who works in the non-profit sector, I feel I have to defend my field (History) in so far as "Attributing any particular attitude held today to a (flawed) understanding of a particular sect more than 300 years ago is silly."
The past is very relevant to the present. I am not an expert on Puritanism, but I can say that people are unaware of why they say or do certain things today.
Have you ever signed a contract with a provision that described what would make said contract "null and void?" Ever heard of an order to "cease and desist?" Do you know why these terms exist? Because in 1066 the French Normans invaded Saxon England and gained control. The Normans and the Saxons didn't trust each other so in all signed contracts they used both the French and the Saxon words to prevent any misrepresentations. Why do we still use these terms in American contracts almost a millennium later? You tell me. Respect for tradition? Laziness?
I am a woman who works in the non-profit field. I have at other times in my life worked in the for-profit world. Sexism (or any kind of "ism") exists in people's hearts whether we like it or not. Awareness is the best defense.
As far as Mr. Pallotta's posting above, I think some people are taking his argument far too literally. Public perception of the for-profit and non-profit worlds differs markedly. I don't think it has anything to do with men versus women. It has to do with what people expect. Mr. Pallotta opines that latent sexism is the reason for this difference in expectations. He doesn't say that men are more profit-driven and they leave the touchy-feely stuff to the women and therefore they are being sexist. He is merely saying that perhaps our culture here in America has evolved from preconceptions of how things get done.
You know what, he is right. Women substantially outnumber men as volunteers. Does this mean men do not care about poverty, diabetes, or museums? No. Does this mean women care more about these things? No. It has to do with how we are socialized as children and what we perceive as our options when we decide to act. This socialization has evolved over many generations and is slow to change.
Nurturing is perceived in our society to be a "feminine" trait. I have known men who were very nurturing as fathers, in the same way women are as mothers. I believe that nurturing is a HUMAN trait. When a father takes his son to the backyard to toss around a football, that is an act of nurture. The same can be said of other traits that are judged to be more "masculine." Women can be very fierce and competitive, not just men. We need to stop thinking in such limited terms about traits that exist in all people to some degree.
Comparing the perceptions of non-profits and for-profits, Mr. Pallotta sees a disparity that he believes came about due to culturally evolved concepts of traditional roles of men and women. He is not accusing anyone of consciously relegating others to an oppressed status.
In 19th century America, the husband was regarded as the protector and provider for the family while the wife was regarded as the caretaker and moral compass. As such, the husband brought in the income and managed the assets. The wife cooked, cleaned, and tended to everyone's daily needs while also ensuring that the family behaved. Ever heard the expression "Didn't your mother teach you better than that?"
Maybe I am just talking semantics here, but I don't really see the need to be defensive because Mr. Pallotta suggests that sexism is playing a role in hindering the progress of the non-profit sector. Perception is holding us back and we all play a part in it. We need to change the way the sector is structured so we can do more good work.
After all, charity is a HUMAN trait.
MMullins,
I could not have said it better myself. People have taken my argument way too literally - starting with the editors who crafted the headline to this blog "Gender Trouble at Nonprofits" is not at all what my piece is about. It is about regarding the sector the way Puritans and others over the ages regarded women - as subservient, more morally pure, etc. as I wrote above. Thank you for putting things in the perspective in which I intended them.
Dan,
I think your arguments are great! I was part of one of your first Breast Cancer 3 days and AIDSRIDE and thought it was the most phenomenal experiences I've ever had and was so sorry you stopped (but I do know why and I think it was wrong).I wish you were able to continue. Keep putting forth your ideas!
Terrie
Dan, and all ---
Great discussion.
Could someone point me in the direction of the research that cites 7 out of 10 nonprofit workers as female?
Thank you.
Thank you.
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