Learn how to make a difference instead of just a donation.
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Each year more than $300 billion is given away to nonprofit organizations. Estimates as high as 40% of that giving happens in the final two months of the year, between Thanksgiving and the new year. While 75% of that overall philanthropy number is given away by individuals, a significant number of us wait until the last minute to determine where we invest our philanthropy. A 2010 study by Hope Consulting showed that nearly two-thirds of donors did no research before making their charitable decisions and when they do, they are looking for that information from the nonprofit organization directly.
Last year, on December 31, a friend asked me to look into an organization he had regularly contributed. Nothing like the last minute! I did some research, gave him my thoughts, but we also talked about reasons to start thinking about philanthropy earlier. Here are three ways to improve your approach and why you should start considering your giving choices early.
Impact
Many people haven’t actually considered this. They hear the ABC organization is good or a friend sits on the board of the XYZ agency. Those can be good reasons, but what do you want to accomplish? What causes are close to your heart? Not organizations, you may have very little interaction with them…but causes, like: children, education, health care or a maybe a specific disease.
People give to change someone’s life.
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I used to work for a guy that always said, “people give to change someone’s life.” My experience continues to prove him right. So, how do you want to change someone’s life? Good organizations will show you what your investment will do for people’s lives.
Involvement
Simply put, would you rather be a big fish in a small pond? or a small fish in a big pond?
If you are truly looking to change lives, you should consider what that looks like in your own life. There are many organizations that run national operations and raise huge amounts of money. $1,000 may be a very meaningful contribution for you to consider, but for a $100 million organization, that size gift can get lost in the shuffle. They continue to do great work, and you continue to get letters and communication but very limited interaction.
On the other end of the spectrum, a local organization, running on a $250,000 budget is going to respond quite differently to a donor that contributes at that level. They are likely to invite you for a tour, introduce you to a client helped through your support, potentially talk to you about volunteering and spending more time there, to truly engage you in the work.
Same gift level, same tax benefit, entirely different experience for you, the donor.
Research
Recently, several stories have been in the news that reflect poorly on the nonprofit sector. The worst of which was four cancer charities collecting nearly $200 million, all being spent inappropriately. As a staff member at a nonprofit for more than ten years now, this is always frustrating. Not all organizations are bad, but misuse of funds does happen. Fraud exists in all sectors, we are no different.
Often people jump to the percentage of money spent on overhead or administrative costs as a measure of success. Proving that you can manage administrative costs to down to 8 or 9% of the organizations budget doesn’t prove anything about the quality of the programs or outcomes you can expect from your investment.
Proving that you can manage administrative costs to down to 8 or 9% of the organizations budget doesn’t prove anything about the quality of the programs.
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The things you should be looking for can be really simple, but often hard to track down. What is the organization trying to accomplish? Do they articulate their method for creating change? Meaning, when you read their website do you understand how they go about their work. How many people are they helping? What changes have they shown in people’s lives and can they prove it?
Philanthropy isn’t money you don’t care about and discard at the end of the year, like the jeans you haven’t worn in two years. It is time we more thoughtfully consider these decisions. The dollars invested in charitable organizations can have tremendous impact on our communities. Now is the best time to start thinking about the difference you would like to make in your community and the lives of people near you. A thoughtful and strategic approach to your philanthropy will provide a much greater reward than you can even imagine.
Photo—Paul Smith/Flickr