To make sure that your giving goes as far as it can, consider choosing your charities as carefully as if you were making an investment or developing a business plan.
“Because you’re ‘investing’ in these nonprofits like any other business enterprise, a disciplined approach is invaluable,” says Bill Dolan, senior philanthropic advisor with the Charitable Services Group of U.S. Bank. “There’s an ocean of needs out there, and you want to use your funds the best way possible. It helps to view each opportunity as a philanthropic business.”
In keeping with the business mindset, Dolan recommends that all philanthropic efforts, from small to large donations, follow a strategic four-step process.
Consider your passions. What matters to you and your family, and what community or global issues do you want to address? For your donations to achieve your goals, it’s important to be passionate about the cause.
“Have a conversation with your family about values, what motivates you and what matters,” Dolan says. “This kind of discussion will shape your family vision and mission, which can help crystallize your long-term objectives.”
Once you’ve solidified your framework for giving, narrow your scope for the type of organizations you’d like to support. There are more than 1 million public charities in the U.S., so it can be intimidating to make a choice. Dolan suggests starting with two broad screens:
Once you’ve shrunk the field to a handful of organizations, it’s time to start your due diligence, which may include the following:
“You might even agree to fund a small project — either one you suggest or one they have planned — to get a feel for how they operate,” he suggests.
“When your approach to giving resembles a business plan, your contributions can go a long way in helping causes you care about.”
Given the unique nature of every nonprofit and the variety of donor priorities, Dolan says there are no one-size-fits-all metrics to gauge effectiveness. For example, one client he worked with had a start-up mentality and preferred to fund new programs. Another client would not fund a charity without a track record, and another insisted the board of an organization reflect the constituency it served.
Other factors you might consider are the diversity of funding sources, administrative costs, partnerships and other collaborative initiatives.
It may be important to you to be recognized for your gifts. The most obvious recognition for a gift is your name in an event program, on a donor wall or on a building. Perhaps more importantly, your donations may give you greater influence with the organization’s board or leadership in future project planning.
Recognition can also be beneficial to the organization, as it can spur additional gifts from friends and acquaintances. “Many of our philanthropic clients are careful because they don’t want to be seen as doing it solely for the recognition,” Dolan says, “but they are hopeful that it will encourage others to give as well."
Ultimately, your approach to giving should match your desires. When it’s built using a well-crafted blueprint that resembles a business plan, your contributions can go a long way in helping the causes you care about.
“There is no shortage of good causes, and we’re all asked to do more,” Dolan says. “By choosing a strategy and honing it, you set the parameters for what you can do and, as a result, your efforts can have a meaningful impact.”
Learn how Philanthropic Services from U.S. Bank can partner with you to help you bring your charitable giving vision to life.