Uncharitable: Documentary Shows the High Price of Low Overhead

Written by Roxanna Ayers, CEO of Ethos Consulting Group.

On September 13th, I had the unique opportunity to partner with donor A.I. company Hatch to host a private screening of Dan Pallotta’s forthcoming documentary feature, Uncharitable. The documentary is based on Palotta’s infamous TED Talk and book of the same name, which most of us have encountered at some point, whether through our nonprofit career or studies at the Lilly Family School of Philanthropy. It ranks as one of the top-viewed TED Talks, with over five million views and counting, so it’s unsurprising that director Stephen Gyllenhaal decided to transform it into a film.

Every time I watch Pallotta’s TED Talk, and I’ve probably seen it 20 times, I’m inspired by the simple but groundbreaking idea he puts forth: overhead is actually good. This idea can feel like a seismic shift when we consider how society moralizes about how nonprofits spend their money. We’re all familiar with the argument that donors don’t want their dollars going to fund overhead expenses like marketing or salaries. In Uncharitable, Gyllenhaal provides a runway for Pallotta to bring home the full scope of repercussions nonprofits experience by the misguided idea that they should operate to keep overhead low.

The film confronts this in heartbreaking detail by revisiting the aftermath of some of the biggest scandals in the nonprofit sector, including the disastrous meltdown of the Wounded Warrior Project (WWP) from its “lavish spending” in 2016.  These accusations–now debunked–ignored the ratio of spending to revenue. While the WWP spent nearly three times the percentage of revenue on overhead compared to their peers, they also gave over six times more to veterans’ programs.

Pallotta’s film shows the collateral damage done to real people by these misconceptions. It’s nearly impossible not to feel a gut punch when ousted WWP CEO, Stephen Nardizzi, recounts to the camera the fallout of being removed from an organization he founded and the subsequent onslaught of investigations and public outcry that took over his life. Consequences need to be put into perspective. There are real lives at stake. People lost careers, families, and their life’s work. The WWP went over a fundraising cliff, losing over 50% of its revenue and shuttering locations around the country. Veterans, the very beneficiaries supposedly suffering from Nardizzi’s management, were left to pick up the pieces. To this day, WWP has not recovered.

Uncharitable reminds us that we do the entire conversation around nonprofit overhead a disservice when we lose sight of the human element. The film feels like the tool nonprofit professionals need to begin to do the work of fixing this broken narrative around nonprofit spending. It’s undeniable that the documentary is a call to action to all of us working in the sector. I would go a step further and say it is our ethical duty to be advocates for pushing back on these harmful misconceptions.

Pallotta is taking a critical first step in a much bigger conversation about how we evaluate the work of nonprofits. While dismantling the overhead myth is essential to undoing the gridlock restricting the sector’s growth, there are still conversations to be had about how we interpret nonprofit success. The truth is that many of us in the sector are dealing with intangibles. We’re carrying out work that cannot be easily distilled into a spreadsheet to appease board members and grantmakers. This, I believe, is because the sector’s work is about improving the lived experience of those around us. Not an easy thing to measure.

Uncharitable does what many of us in fundraising try to accomplish in our solicitation materials- seeing ourselves in another person. This message is also the most powerful tool Pallotta offers the audience. The key to helping nonprofit professionals change the discourse with our boards, donors, grantmakers, and community about how our budgets should scale is to introduce this connection.

Any of us could find our organizations or ourselves the target of the damaging and misinformed narrative about overhead spending. Imagine losing your position because it was deemed unnecessary overhead. What would the fallout be? Would you lose your home? Your car? Your professional identity? What if you had to go through all of this in the public eye when your local newspaper decides to run an expose on your nonprofit? Uncharitable puts this scenario front and center for all of us because, as Pallotta has spent his career demonstrating, it can happen to any organization.

Unfortunately, the film isn’t available to the public yet. It is a donor-funded documentary and still needs to close the gap in its funding goal before it can wrap production and make its way to theatres and streaming. You can help bring this powerful tool to the sector by considering a donation. To show support, Executive Producer Dina Rabhan invites you to contact her at dinarabhan7@gmail.com.