Yale School of Management

Posts by Charitable Giving

The Myth of Win-Win

August 26, 2014

“We allow people to make huge profits doing any number of things that will hurt the poor, but we want to crucify anyone who wants to make money helping them.” These are the words of Dan Pallotta, an entrepreneur who, until the early 2000s, ran a company that organized charity fundraisers. In 2002, the company netted $81 million for charity—a figure equivalent to about half the annual giving of The Rockefeller Foundation. But it was based on a for-profit model, and it compensated as such, with Pallotta himself earning about $400,000 per year. When word of his salary got out, he came under intense criticism. “Shame on Pallotta,” concluded one critic.

But why? “Want to make a million selling violent video games to kids? Go for it,” Pallotta is quoted as saying in a 2008 New York Times column by Nicholas Kristof. “Want to make a million helping cure kids of cancer? You’re labeled a parasite.”

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