A Path Appears: Transforming Lives, Creating Opportunity

Chapter 11 begins the second section of the book, which focuses on how to reform organizations that provide aid. It starts with the tale of Dan Pallotta, founder of TeamWorks AIDS, who built up a wildly successful charity focused on fighting AIDS by raising money through bike rides. Pallotta had a fall from grace when he was accused of spending too much money on himself and his staff, as well as on marketing and logistics. This led to the loss of an important sponsor and his charity collapsed.

The story of TeamWorks AIDS raises the question of how best to run a charity and whether different rules should apply to successful charities and businesses. The authors agree that waste should be minimized without sacrificing impact. As they write, “Would it have been better in the 1950s to finance a polio charity that used 99 percent of its funds to push survivors around a park in wheelchairs, or one that swallowed up half its money in salaries for talented scientists and lab equipment and ended up financing Jonas Salk’s invention of the polio vaccine?” (171).

Resources like Charity Navigator allow potential donors to research how an organization spends its money, but this can impel charities to underinvest in anything considered overhead.