Philanthropy isn’t just for billionaires and millionaires. Take Millennials, the largest generation and the largest segment of today’s workforce – they value social responsibility and express it clearly in the decisions they make with their money. It informs the brands they buy, the investments they make and the causes they support with small but regular contributions.
Over the past 20+ years of work with private foundations, we’ve witnessed countless examples of generosity that range widely in size and style, from grantmaking that bestows millions of dollars upon a single charity to simple acts of kindness such as mentoring a teen or visiting nursing home residents to o er companionship.
While some of the most inspired and fulfilling gifts are made in-the-moment, we believe that thinking about charitable giving as a core component of your financial plan, with specific targets and goals, can help you achieve higher impact. When you don’t have big numbers to give, it’s especially important to manage your gifts carefully. Here are some insights and ideas for giving with any budget.
Charitable Giving vs. Philanthropy: What’s the Difference?
While charitable giving and philanthropy are often used interchangeably, it’s generally accepted in some parts of the nonprofit ecosystem that these terms can distinguish between styles of giving. For many of us “philanthropy” likely conjures images of wealthy benefactors granting impressively large sums of money to charity. Rather, philanthropy is simply a more strategic, long-term form of giving, usually around a specific mission and goals, whereas charitable giving is usually more short-term, reactive and focused on meeting immediate needs as they arise. Both are beneficial – and both may be accomplished with any sized budget.
Regardless of which giving style works best for you, visit here for ways to make it more impactful, including how to coordinate it with your tax strategy, estate planning and investment management, and how to formalize it with a charitable vehicle such as a private foundation or donor-advised fund.
Give with Time, Talent or Treasure
Whether you give for the short or long term, remember the three Ts: time, talent and treasure. All individuals are capable of uniquely sharing with others and may do so in a variety of ways: by volunteering time to others (e.g., helping at a homeless shelter or library); by using talents to help others (e.g., a doctor volunteering at a local medical clinic); and by sharing treasures (e.g., money, assets, loans) with others. Visit here to explore this idea further.
Clarify Your Values, Passions and Priorities
While giving is ultimately intended to benefit the recipient, it can o er personal gratification and fulfillment for the giver as well – especially when givers take time to determine their values, passions, and priorities. The more you can channel your giving toward issues that are important to you, and toward utilizing your special skills and talents, the more gratified you’ll be with the impact your generosity achieves. You’ll likely also avoid feeling overwhelmed from trying to “save the world” if you prioritize your giving. While the global need for charitable support is endless, keep your giving focused for optimal results.
If you have entrepreneurial spirit and strong business experience, apply your drive and expertise to your philanthropy. Entrepreneurial philanthropy is an innovative approach to solving social problems that’s especially effective for business leaders and change agents who want to make lasting impact in the world and build a legacy for themselves, their families and their communities. It’s also an ideal way for younger professionals to hone their business and leadership skills. Visit here for more information.
Make it a Family Affair
Philanthropy is an excellent means of uniting a family around a common cause. Whether you’re planning your year-end charitable donations or running a private foundation, involve your family members in your efforts, including teens and young children. Giving together lends itself to sharing values across generations and expressing each other’s interests, passions and creativity. Visit here to explore ways of engaging children and young adults in giving. And if you have a family foundation or are thinking of starting one, consider these five benefits.
Give Wisely: Evaluate Charities Carefully
Take your time when donating to charities, especially during the year-end holiday rush, to be sure your generosity will make optimal impact. Visit here for insight into how you can assess a charitable organization across several dimensions, including how it’s run, how it utilizes donations it receives, how it reports on results, and how to ascertain if its mission is a good fit with your philanthropic priorities.
Formalize Your Giving: Establish a Schedule, Consider a Charitable Vehicle
You don’t need millions to set yourself on a formal schedule for giving. Doing so can help you consistently meet your giving goals while managing other financial obligations. For those who give their time and talents, many commit to a regular schedule of when they volunteer, such as weekly or monthly visits to help stock a food pantry or to tutor a child in need. For those making monetary donations, the months of November and December are generally considered the giving season during which many people make annual year-end contributions to their favorite charities. Others, however, prefer to donate more frequently, e.g., monthly or biannually, either directly to select charities or through a charitable vehicle such as a donor-advised fund or a private foundation. Visit here to explore the differences between the two vehicles and how they may be used in tandem for maximum giving synergy.
If you need guidance with your giving plans, a financial advisor or accountant can help with determining the most effective vehicle for your budget and with navigating the tax implications of your donations (e.g., eligible deductions). Specialized philanthropic advisors are also available to o er in-depth counsel around things like managing a private foundation, developing a strategic philanthropic plan and establishing a charitable legacy.
This article originally ran in MarketWatch.
The information provided in this document is for general information purposes only, and does not constitute legal, tax or investment advice.