Americans tend to be very charitable. Historically, charitable giving as a percentage of GDP has consistently hovered around 2%. In 2017, this amounted to more than $400 billion, according to Giving USA. Yet, most of us don’t really understand the impact that our donations have on the causes we choose to support. After the check is written, where does the money go?
Strategic philanthropy is a way to give more effectively. It is often embraced by those who are in a financial position or state of mind to leave a legacy of charitable giving, who also wish to measure the impact of their gifts. However, anyone that regularly writes checks to their favorite organizations and causes can develop a more strategic approach to giving.
Although strategic philanthropy requires time and discipline, those who practice it often achieve more meaningful results. Whether your gifts are motivated by financial reasons or pure generosity, the following steps can help you develop a process to be more strategic and effective about giving.
Determine a Cause
People choose to give for many reasons. Determining your motivations forgiving is the first step in developing an effective strategy. If you are a more experienced donor, reviewing your past donations can help you discover where your passions lie.
Regardless of your experience with charitable giving, certain questions can help you narrow your focus to direct your philanthropic efforts. For example, what issues in your community concern you? What do you worry about for future generations? And, how do you wish to be remembered? While these questions are not all-encompassing, they can serve as a helpful starting point in identifying your passions, values, and priorities—all of which will help you determine what you want to achieve with your giving strategy.
Involve Your Family
Philanthropic giving is often an expression of a person’s beliefs and values, a way to connect with others in the community or with family, and an opportunity to create a legacy that can be passed to future generations. Involving your family in the process can help make the experience more meaningful while establishing a strategy that can be implemented well into the future.
Additionally, your family members all have unique strengths and interests that can be embraced to develop an effective giving strategy. Giving your family the opportunity to express their own passions and goals can help them feel more engaged and may bring more focus to the legacy you wish to create.
Have an Impact
Once you and your family have identified the causes that are important to you and your motivations for giving, the next step is to develop a plan with well-defined action items. Like any skill, developing a personal approach to philanthropy must be learned, which can take time and effort. You may decide to start by giving small amounts to a few organizations while gradually learning more about the impact your gifts make. As you become more educated, over time you can better focus your efforts to achieve the end results you desire.
To determine whether the process you have developed is making an impact, it’s important to first understand how you and your family define success. Once you have clearly defined what you want to achieve, an effective giving strategy includes a set of criteria and milestones to measure whether your efforts are indeed successful.
The journey to making a measurable impact is often long, requiring patience and flexibility. However, philanthropic giving is also a great way to engage loved ones and future generations while creating a legacy of generosity. A careful and disciplined approach to philanthropic giving enables you and your family to come together for a shared cause while being more effective with your philanthropic efforts.