As giving advisors, we know every giver is different, but there are some common threads that we’ve found to help donors direct their generosity. Here are five things to consider when making a significant investment in a cause or charity.
Strategic Giving: 5 Ways to choose where your big philanthropy will go
The ROG Team
As giving advisors, we work hard to help ROG donors the best decisions with their philanthropic investments. Every giver is different, but there are some common threads that we’ve found in how donors direct their generosity.
Here are five things to consider when making a significant investment in a cause or charity.
Choose a charity based on your values, and where you find meaning
Whether it’s driven by our faith life, a hot button issue we care about, or an attachment to the brand of the organization, we’re all looking to find meaning in our giving.
When you watch a video showing how real people benefited, and you tear up, that’s the sort of emotional response that indicates a match for your values. When a medical giving opportunity invokes the rage, feeling of hopelessness, and loss you felt when you went through a family health struggle, that’s another big “why” to give. When a giving opportunity matches your personal version of “make the world a better place,” the charity is tapping into your well of meaning and purpose.
This is why fundraising solicitations with kids and puppies in the pictures get a lot of response. We all like kids and puppies. Similarly, when a charity that’s associated with your faith or philosophy comes calling, you’re much more likely to respond.
Try this excercise: sit down and make a list of things you most care about in the world. These values should drive your giving priorities. Just be sure to consider these additional things as you decide where your big money will go.
Choose a charity based on your history
Very few donors give big to a charity after their first introduction to a cause. For the most part, we give where we have a history. We give to organizations that have been part of our personal story in some way.
For example, we all give to colleges. And we’re likely to give pretty consistently, because these institutions made a difference for us at a young age. We’re not always happy with the decisions our alma maters make, and that probably impacts how much we give in any year, but we’re pretty unified in agreeing that we’ll keep giving. These institutions are just so much a part of our history.
Choose a charity based on a relationship
It is perfectly fine to stick with charities you’ve known for a long time. If you’ve served on a board, if know the fundraiser or executive director, if you’ve volunteered with a group, you have a relationship. And that familiarity can drive a lot of giving.
It can also make it a little harder to make a strategic giving decision. The relationship is valuable. What you’ve experienced as you’ve been involved with a charity and who you know there is crucial to trusting them with an investment. But it can also make it harder to objectively evaluate an investment, so think about that as you consider taking your giving to the next level.
Choose a charity based on the demonstrated, data-driven impact
Just like a financial or business decision, we know you want to maximize your return on investment with giving. This means looking critically about what a charity actually does, where they spend donations, and how much of the giving goes to real impact to those in need.
Unfortunately, only a small fraction of givers base their decisions on data, and while this is increasing, the available tools aren’t easy to use, and you might need experts to help you evaluate a charity. The data may be hard to find, it might be incomplete, or there might be some really tough questions you need to ask an organization before a big gift. That can take time, it can be awkward (expecially if you have history and a relationship), so we recommend getting help. Because you really came to make a gift, not do an audit.
Choose a charity based on the strategic direction of the organization
Big donors that we talk to want to ensure their gift will keep on giving down the road, and they want to make sure the organization is still there for generations, or if their charitable need becomes met, they have a plan for the next phase of impact.
For example, we came across a charity recently that got dinged a bit on Charity Navigator because of their lack of long term capital. This was crucial for us to share with the prospective donor, but we also shared that in our research it’s clear this is part of the charity’s current model. This organization just gives away everything that comes in. That’s a huge immediate impact value for a donor, but it doesn’t offer assurances of long term value.
We recommended a conversation with the charity that involved tough questions like: “What will this look like in 20 years?” or “What is holding you back from expanding your reach as an organization?” The answers to these questions will help the donor align with the charity’s strategic plan, and be a real partner for what’s next. It might involve a capital investment. It might involve gifting the tools to the charity to take their impact to the next level. And that’s a great example of strategic giving.
At Return on Good we pledge to work with you to maximize both the meaning and return on investment for your giving. Maximize your impact and the joy of giving by talking with an ROG advisor today. For more information on how Return on Good can help you give smarter with more impact, connect with Jay at Jay@returnongood.org.