Rethinking Charitable Funding: Investing in Volunteer Programs for Greater Impact

In the nonprofit sector, we often hear about the importance of keeping overhead costs low. Donors and watchdog organizations praise nonprofits for spending the vast majority of their funds directly on programs rather than administrative expenses. But what if this mindset is limiting our ability to make a real, lasting impact?

This question is at the heart of Dan Pallotta’s TED Talk, The Way We Think About Charity is Dead Wrong, and the newly released documentary Uncharitable. These works challenge the conventional wisdom that nonprofits should operate with extreme frugality and instead advocate for a more strategic investment approach—one that includes competitive salaries, robust marketing, and program growth. As a nonprofit consultant specializing in volunteer program development, I see firsthand how this philosophy applies to one of the most valuable yet often underfunded resources in the nonprofit sector: volunteers.

The True Cost of a Volunteer Program

Volunteers are often considered “free labor,” but this perspective ignores the reality that an effective volunteer program requires strategic investment. Recruiting, training, and retaining volunteers takes time, effort, and resources. Nonprofits need dedicated staff to manage these programs, marketing to attract the right volunteers, and infrastructure to support their work. When organizations fail to budget for these essential elements, they risk high turnover, disengaged volunteers, and missed opportunities to maximize their impact.

Why Investing in Volunteer Programs Yields High Returns

1. Increased Capacity – A well-structured volunteer program allows nonprofits to expand their reach and services far beyond what their paid staff could accomplish alone.

2. Higher Volunteer Retention – Volunteers who feel valued and well-trained are more likely to stay engaged, reducing turnover and the costs associated with constant recruitment.

3. Greater Community Engagement – Volunteers who feel valued are more likely to become long-term advocates, donors, and champions for the cause.

4. More Effective Service Delivery – Proper training ensures volunteers are equipped to serve effectively, leading to better outcomes for the communities nonprofits aim to support.

   
   

Investing in volunteer programs also means compensating volunteer program staff appropriately for their expertise and the critical role they play. Managing volunteers requires strategic planning, relationship-building, training, and coordination—skills that deserve fair and competitive pay. Underpaying and overloading staff leads to burnout, high turnover, and ineffective programs. Nonprofits should align salaries with market standards, recognizing that strong leadership in volunteer management directly translates to higher retention, better community engagement, and greater overall impact.

Breaking Free from the Scarcity Mindset

Just as businesses must invest in marketing, research, and development to grow, nonprofits need to shift their perspective on spending. The idea that overhead is inherently bad is holding many organizations back. If we truly want to make a difference, we must be willing to invest in the people, systems, and strategies that make nonprofit work sustainable and impactful.

This is why Uncharitable is such an important film—it exposes the misconceptions that have kept nonprofits in a cycle of underinvestment and challenges us to rethink how we support charitable organizations. As I attend a screening of this powerful documentary, I am reminded that real change begins when we allow nonprofits the freedom to operate with the same bold ambition as for-profit enterprises.

Moving Forward: A Call to Action for Nonprofits and Funders

Nonprofit leaders must advocate for the funding they truly need, including resources for volunteer program development. Donors and grantmakers should shift their perspective from scrutinizing overhead percentages to evaluating overall impact. If we want to see real, scalable change, we need to start funding volunteer programs as the invaluable assets they are.

At The Volunteer Leadership Lab, we help nonprofits build intentional and scalable volunteer programs that drive meaningful change. If your organization is ready to invest in its volunteer infrastructure and maximize its impact, let’s start the conversation.

The nonprofit sector is at a crossroads. Will we continue to operate under outdated constraints, or will we embrace a new era of strategic investment that empowers charities to truly change the world? The choice is ours.