What Does Your Philanthropy Say?
What does your philanthropy say about you? It is an interesting question really. After all, philanthropy is the ultimate in individual expression. It allows for original initiative and it is quite often a reflection of who we are. Not to mention it is fulfilling on a personal level in a way that can be unparalleled by any other business transaction or exchange. Consequentially, the reasons we give and the means by which we carry out our individual theories of making the world a better place are personal and vary dramatically.
Since we know we are doing good in the world, is it worth examining the impact we are truly having? For most donors, we would say no. Give because your life has been touched by a cause, give because a colleague asked you, give because you feel a responsibility to help….simply enjoy the giving because it’s a great thing to do. The average donor is not so interested in the impact their individual donation is having. They like to know that their donation is being used effectively. However, in the end, they are more concerned with the process of giving and the personal satisfaction it brings.
However, if you are interested in a higher-than-average reutrn on your charitable investment, there is a way to carry out your distinctive philanthropic vision that is high-impact and, ultimately, more fulfilling.
Not too long ago Thomas Tierney, chairman and cofounder of Bridgespan, gave a fantastic speech at the 2009 Philanthropy Roundtable Annual Meeting. The major focus of the address was to help donors identify several hurdles we all face and must overcome when seeking to achieve greater impact through our contributions. He made the following points:
- You are only as good as the organizations you give to. No matter how you try, your donation will not exceed the impact that the nonprofit you are giving to is capable of. This is daunting because if you consider the sheer number of nonprofits in the US – more than a million at latest count and growing – how is it possible to decide what distinguishes a good nonprofit from a great one? The answer rests mainly in the research and vetting process you have in place. Now, researching a nonprofit is not an easy process, but better than average returns do not come easy. The extra effort it takes to select the nonprofit who is capable of making your dollar stretch a little further can be the difference in a life saved or an additional child’s future drastically altered for the better.
- Excellence is self-imposed. Most people like to think of themselves as being charitable – both in character and in principal. It is easy for a donor to stroke a check to their favorite organization or cause and continue on their merry way. Unless your running for public office, rarely does a donor face any sort of scrutiny over who they contribute to. Also, unlike the for-profit world, there are no predators in the nonprofit space. Meaning that if your family foundation underperforms, there is no larger foundation that will come and absorb it. Underperformers, although often quite well-intentioned, abound in this sector. Since there are no external factors which force donors to achieve greater impact through their giving, donors must raise the bar themselves if they want to see more children’s lives changed for the better.
- There are obstacles and hurdles which are unique to the nonprofit sector. In spite of efforts by nonprofits to function more business-like, donors are wise to remember that there elements to the nonprofit sector that that are not present in the for-profit world which more people are familiar with. For example, there are no capital markets for nonprofits nor any sort of pipeline for identifying and promoting talent. These kinds of nuances understandably affect how nonprofits operate. For donors this means that a vital part of selecting an effective nonprofit is to ensure that the organization is repeatedly asking themselves the difficult questions about how they define success and how they are going to achieve that vision through talent, resources, and strategy.
Higher-impact philanthropy comes with a cost. It is not about increasing the amount you give, but putting in the effort to ensure that those dollars are used more effectively. The good news is…there is help. Our role as an organization is to provide the research and resources necessary so that our clients can make informed giving decisions and achieve the impact they are hoping for. We do this because we firmly believe that more donors giving to more effective charities results in more lives changed.