Seven Strategic Philanthropy Lessons

Although mission-based philanthropy is highly individualized, there are some broadly applicable lessons. The following seven strategic philanthropy lessons, followed correctly, will be a recipe for success in your philanthropic adventure.

1. Align Investments with Mission

Nearly $1 trillion currently sits in foundations and donor-advised funds. This money is committed to charitable missions, has received a tax deduction and can’t be returned. Each year, just 5 to 20 percent of that amount is distributed to nonprofits. The rest is usually invested for the single bottom line of financial growth.

2. Go Deep, Not Large

Donors and beneficiaries alike reward donors when they focus deeply on a scaled-down selection of meticulously chosen key concerns or will cause. Wealth Management.com explains that impact investing that uses mission-related investing, program-related investments and socially responsible investing tools can help you achieve much more bang for your philanthropic buck.

3. In Decision-making, Use Two Lenses

The Denver Post suggests that when setting philanthropic goals, donors should look through two lenses. The external lens helps us answer the question, “What are we hoping to accomplish for our community, country or world?” The internal lens helps us answer, “What am I hoping to achieve for my family, business or self by donating hard-earned money and precious time to charity?” Both questions are important. Your answers inform an effective strategy to achieve both internal and external goals through philanthropy.

4. Create a “Safe Zone” for Family Philanthropy

In most cases, philanthropy represents a small fraction of a family’s assets. Bruce Debosky recommends that you create a separate table for consideration of these assets, and invite all members of the family to sit there as equals. This is a key step toward creating a “safe zone” for improved communication about philanthropy, which can lead to more engagement, enhanced family dynamics and greater impact.

5. Give Boldly and Take Risks

People rarely donate so much to charity that they can no longer provide for themselves or their loved ones. Yet many of us can give far more than we do. Your financial advisor can help determine what you can really afford to give, and then give boldly. Taking calculated risks with grant making may be the only way to find new solutions to old problems.

6. Engage Other Stakeholders

Business stakeholders can include employees, directors, shareholders, customers, vendors, regulators, lenders and community leaders. Each stakeholder offers a different and valuable perspective on the role of the company in the community. This tactic enhances internal and external effectiveness.

7. Give While You Live

When you give while you live, you can learn about and experience the internal and external impacts of your philanthropy in real time!

Philanthropy, done well, is a powerful tool that adds joy and purpose to life and enhances business success. Follow these seven strategic philanthropy lessons and you will make the most of your philanthropic experience!