Peanuts = Monkeys

I feel like we have all heard it said, ‘You have to spend money to make money’. This is true on many levels, but how do we feel about that when it is used in reference with a not-for-profit organisation? Can charities say that?

Let’s think of it this way – if there is a charity that no one has ever heard of, they will not receive any funding. A charity that has second rate staff is not going to create trust and therefore will not receive ongoing funding. A charity that is not working effectively because of lack of resources is going to waste money and will not receiving ongoing funding.

Dan Pallotta called this issue out in his TED talk (you should really watch it). The way we think about charity is wrong.

“You want to make 50 million dollars selling violent video games to kids, go for it, we’ll put you on the cover of wired magazine, but you want to make half a million dollars trying to cure kids of malaria you are considered a parasite yourself.” Dan Pallotta

Somewhere along the line we have decided that we need to choose between either doing well for ourselves and our family or doing good for the world and that somehow these two outcomes cannot exist within the same paradigm. It’s a belief system that makes sure that charities and other not-for-profits don’t grow too big and challenge the power of the for-profit sector.

Dan points out that this mentality can be traced back to the religious experience of penance from 400 years ago. There is a long history of making money and then carrying a feeling of guilt because a profit was earned. Some of that guilt was warranted as the profit was earned off the backs of slaves and the poor, but some of the guilt was an unnecessary burden placed on people because of their understanding of who God is. Regardless of the reason, giving to charity was the method used to ease one’s conscience. Charity, therefore, could not turn a profit because then it would cease to serve the purpose of paying for the individuals ‘sinful’ money making. Whilst I would suggest that much of the thinking around business and turning a profit has changed, the feeling about charities spending too much money, getting too big, or their employees earning too much has not.

It is important to be wise with the money that people give but our thinking does need to shift. Overhead costs, including staff wages, are part of the program costs and ‘admin’ is not a necessary evil which we don’t like to acknowledge. It is part of the program itself.

If you pay peanuts you will get monkeys. It may not be true all the time. Some may take a pay cut to work in the nonprofit sector for a period of time but you will always lose the good ones eventually. Our society shouldn’t have to make the choice between doing well for themselves and their family, or doing good for the world. They are not mutually exclusive.

Money, Sex and Chocolate…wait, what?

Often people will give a long list of benefits for giving money away, including the amount of help that it provides to people who are ‘less fortunate’.

But ultimately you should give money away because it is good for you. It makes you happy. True story.

There have been a number of studies done and they tell us these things…

Donating to charity makes us feel good. One study found that when people donated to a worthy cause the area of their brain responsible for cravings and pleasure rewards ‘lit up’. That is the same area of the brain that is active during sex and consuming chocolate; meaning that there is a pleasurable feeling when we give money away. The same study tells us that giving money away gives us the same feeling as ingesting an addictive drug or learning you have won the lottery. It’s good.

Secondly, giving to a worthy cause increases our happiness.

In another study, a group of people were given some money, either $5 or $20. One group was told to spend the money on themselves, by paying a bill or spending it on some sort of an expense or even a gift for themselves. The second group was instructed to spend the money on someone else or to make a charitable donation. The end result was that at the end of the day the second group was happier. Yep. The group that spent the money on someone else or made a charitable donation had a brighter perception of the world than the first group who spent the money on themselves.

The secret is that people feel good about themselves when they give, it strengthens social connections and the good feeling of giving lasts longer than the ‘hit’ we receive when we buy something for ourselves.

So, giving money away makes us feel good and makes us happier people, and it is cheaper and less damaging than addictive drugs. This is not brand new information but sometimes we forget these things.

Want to feel good? Looking to be happier? Why not give some money now – www.opportunity.org.au