The season of giving is on our minds. An avalanche of fundraising events is clamoring for our attention on behalf of charitable causes. There are practical reasons, too, for thinking about charitable gifts just now. Donations made before the end of the calendar year may leverage substantial tax benefits; and contributions to your favorite charities could not be easier. There is hardly a self-respecting nonprofit that does not have a “Donate Now” button on its website. Yet knowing what to give, how to give, and when to give can be a thicket of challenges when the magnitude of need and the over-abundance of nonprofits all compete for the attention of current and prospective donors.
Substantial resources are available to help you do your homework before making a choice. Time spent on being more effective with your philanthropy reaps benefits for the charities receiving gifts and deepens your own satisfaction. The process will help lead you to those charities which most inspire your confidence and trust—ideally, before you write the check or point and click on the donate button. Charities look for a relationship of loyalty with their donors. They know they must earn the trust and confidence of those who give if it is to be a continuing relationship. As a donor, you want your contribution to be used for the purposes you intend in making the gift; and the charity has the responsibility to be truthful in communicating that the uses of the funds are consistent (or not) with your expectations as a donor.
A recent article in the Wall Street Journal by Lisa Ward provides an excellent overview of the questions to ask about charities before a donation goes out the door. She suggests you begin by being clear in your own mind what you hope your philanthropy will accomplish. Even modest donations can make a difference but if you overburden your gift like a holiday tree with too many expectations, you are unlikely to be satisfied with the experience.
Ms. Ward does caution against being a sucker for heart-wringing stories or dogs with sad, stricken faces. If you do not understand and cannot fathom from an organization’s website or materials how it intends to address the nasty symptoms held out as donor bait, it is unlikely the charity will address the root causes of the problems it depicts. The distinction can be important if your vision of philanthropy is charity for its own sake, i.e., feed the poor; or you want your gift to help address root causes and change the world, i.e., why do people experience food insecurity in the first place? There are opportunities to do both kinds of giving so the choices need not be mutually exclusive. The greater the specificity with which the organizations reveal their theory of how change is made, the more educated and strategic donors become about opportunities for inspired giving, philanthropy that acts like yeast to leaven the opportunities for leadership and change.
Ms. Ward highlights other avenues to basic fact-finding. She suggests researching the organization’s governance and leadership; reviewing an organization’s annual audit and financial information; comparing various organizations with others whose missions are devoted to similar work; and soliciting expert opinion among those with the experience and credentials who have a more global view of the issues and strategies the prospective charity seeks to address. You can also just ask donors who have given to the organization or your go online and consult any of the websites such as Charity Navigator that provide detailed analysis of thousands of charitable organizations; but caution ahead: You can get lost in the data.
Back in the day, the old paint-by-number craft kits gave us would-be Rembrandts a chance to be artists, however questionable the results. Stand back fifty yards and squint your eyes, and you could almost see the masterpiece. It is possible to reduce philanthropy to a similar experience by using a strictly technocratic mind-set in review of nothing but the facts. The facts may be sufficient to get to a plausible decision; but at the end of the day, when you pull the trigger on a gift, especially a gift that might be a sacrifice to make, it’s a judgment call often based on an ephemeral feeling that the charity has the right stuff, even when risks are foreseen. This is inspired philanthropy and it can produce a result that even Rembrandt would have hung on his wall. Philanthropy is like that: Sometimes, you just have to pick up the brush and paint.
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