Rethinking Giving

Last week, Amy Feldman wrote a compelling article titled, “Rethinking Ways to Give Wisely,” in Business Week. It covered some important ground, addressing the “ad hoc” nature that drives so much of charitable giving in this country.

There is no doubt we are experiencing a welcome and overdue proliferation of both awareness and proposed solutions to the question, “Where did my donation go?” The article listed resources including Charity Navigator, GiveWell, Philanthropedia and GreatNonprofits – all are valuable resources and represent important steps to more effective giving. These rating services have come a long way and now offer a much more accurate picture of what exactly it is a given charity purports to do. Further, they now offer more details that enable a donor to tell if that charity is in fact accomplishing its mission.

The author also makes a statement that was the catalyst for the creation of Operation Kids Foundation and likely other versions of philanthropic advisories:

Baby boomers have become used to getting advice on their finances, yet there are few places to turn for philanthropic advice for those giving less than $1 million. While increasing numbers of people have set up donor-advised funds, which can be a smart financial-planning move, these vehicles don’t answer the question of where to give the money for greatest effect.

We seek to answer this question for donors.

There is an underlying fact to this subject matter that should be drawn out:  the reason that these “rating systems for charities” exist is because in this country, our generosity exceeds our options in terms of advice and planning.  Donors are surrounded by solicitations on television, in the mailbox, online and via radio-thons. This abundance of solicitations coupled with our busy lives and generous nature, has something to do with the “ad hoc” nature of giving.

One of the top reasons people give for making a donation is simply the fact that, “I was asked!” It is natural to give on emotion, or to respond to a solicitation from a trusted friend or family member. It is even more common to give in reaction to crisis or disaster. But all of these methods lack specifics; they lack a plan. When we give in this way we often give small amounts to many different organizations. We don’t have time to track every small gift and we accept the good feelings we earn through giving and leave it at that. These characteristics have everything to do with the disappointment and frustration that can accompany charitable giving.

In our capacity as a philanthropic advisor, we meet daily with donors who have taken the steps to create structured and sophisticated vehicles for amassing and eventually (or gradually) dispersing charitable dollars, but who have given very little thought as to the intended result. What issues do they intend to address? Is this a family effort? Do they want opportunities to involve children or grandchildren and perhaps visit the areas of the world they impact? Is their focus domestic, or health related, or educationally driven—there are so many choices and so many subsets to each choice. And in the face of natural disaster it becomes doubly confusing: Is the donor interested in immediate aid or long-term recovery? What do they know about the charities they are considering? Is there a delivery mechanism for the aid?  Does the charity fully understand the government, culture and community they seek to assist?

These questions often go unanswered and in one of the sad twists to charitable giving, can lead to frustration rather than the expected fulfillment. This is in sharp contrast to the alternative of planned, measured and leveraged giving; that may be a new term to some but it is the simple notion that if you care about an issue, it is very likely thousands of other people do as well; imagine the impact of your combined giving! 

With the situation in Haiti reviving feelings we came to know all too well during the Tsunami and Katrina, it is wise to consider how we give. It is also wise to seek out all of the information you can find abut the charities you are considering. But remember this:  At then end of the day, charitable giving is a very personal process. There are precious few resources that can personalize your giving with your vision and objectives in mind, but they do exist. The options that may be available to you depend upon your assets and structure. Some charge a fee. As far as we know, we are the only one who offers those services as a charity.

I can promise you this; once you make a fully informed donation to an accountable charity that demonstrates efficiency and shows measurable benefit, you will never go back to an ad hoc method of giving.  

-Rick B. Larsen

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