6 Ways to Embrace Strategic Philanthropy with Your Own Giving

6 Ways to Embrace Strategic Philanthropy with Your Own Giving

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One of the biggest trends in philanthropy in the past decade or so has been a move toward strategic giving, which can teach donors how to maximize their impact. Last year, Americans gave more than $400 billion in total, but many of those gifts were not given in a strategic manner, which means that the donors may not have a clear sense of what happened after they signed the check. People who donate regularly can give more effectively when they adopt a strategic approach, although this style of philanthropy does involve both time and discipline. Some of the steps involved in strategic giving include:

 

  1. Figure out what matters the most.

In general, there are two basic approaches to giving. Many people start donating by giving to whichever causes speak to them—even if they are totally unrelated—which can mean that their impact is scattered and varied. Over time, as donors give more, it may make sense to adopt a different approach, which starts by figuring out which causes they consider the most important. By focusing on one or two causes, people have a greater chance of making a real difference. After all, a dozen organizations who each receive $100 probably can’t do much with that money, but one of them could probably put the collective $1,200 to good use. Focusing on one or two causes can help donors create a sort of “brand” or identity that defines their giving and makes it easier for people with innovative ideas to find them.

 

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  1. Research what’s being done right now.

Before making a commitment to any organization, strategic philanthropists take the time to understand what’s being done in the fields that interest them the most. Importantly, they may need to narrow their focus even further during this step of strategic giving. While it’s great to figure out where their passions lie, donors must then consider whether they want to work on that problem locally, nationally, or globally. Individual donors may have a greater direct impact when they work with local organizations, but systemic change often cannot occur without a broader focus. Researching what different organizations are doing will help donors decide which approaches are the most impactful, and help them see how they can fit into the bigger picture.

 

  1. Get the whole family involved in giving.

Strategic philanthropists recognize that their giving represents an expression of their personal values and view giving as a means of connecting to the people around them. Often, this process starts at home. When philanthropists involve their families in giving decisions, they can inspire future generations of donors by showing them how meaningful the experience can be. Moreover, each member of the family will bring a fresh perspective to the giving strategy. Listening to different opinions can help create a better strategy that will ultimately have a bigger impact.

 

  1. Listen to the people involved with the cause.

For a long time, philanthropy operated primarily as a top-down endeavor with donors deciding where to allocate funds for projects. Modern strategic philanthropists are now realizing that this approach doesn’t make the most sense. In the end, giving has a bigger impact when it is tailored to what the people it is meant to help actually need. When figuring out which causes to support, donors should make sure that they talk to the activists who are involved with the cause, as well as the ultimate targets of the philanthropy. For example, if a philanthropist wants to help alleviate homelessness in their city, they should talk to academics and policy experts who study homelessness, organizers who operate programs in this field, and people who are experiencing homelessness to determine what is most needed.

 

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  1. Develop a detailed plan for giving.

Philanthropy is a skill that needs to be learned. Donors who do not take the time to reflect on their own plans often become motivated more by emotion than logic, which can limit the impact of their giving. While emotion plays a major role in philanthropy, donors also need to embrace a data-driven approach. For many people, this means making fairly small gifts at the outset and seeing how these donations play out in the short term. By learning about the impact of these smaller gifts over short periods of time, donors can get a better idea of what effect larger donations would have over the long term. Any plan for giving should include goals, including a clear definition of success. By having this in writing, donors can see the progress they have made and make changes as needed, to move closer to their goals.

 

  1. Speak with financial and philanthropic advisors.

Donors can often maximize their giving through strategies that they may not be aware of, which is why it’s critical to consult with professionals. Both financial and philanthropic advisors will have ideas about how to make the most of a donor’s assets, including various tax strategies. Keeping these professionals in the loop ensures that donors don’t miss out on any obvious ways to save money. In addition, these professionals can help figure out how to invest money and schedule gifts to ensure that the donor’s philanthropy can continue for years to come.

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