Although large “household name” nonprofits often do great work, many times they are well-funded and deeply endowed. Since small grass roots organizations often struggle for resources, gifts to them can make a huge difference. Moreover, giving locally enables family members to become more engaged, with better opportunities to ask and listen to what is needed by the recipients. There are also chances to volunteer, serve on boards and get to know the leaders of the nonprofits working closest to the problems.
—Take risks with a portion of giving.
Philanthropy is best viewed as “risk capital” with the potential to drive innovation. Government efforts are increasingly limited by political gridlock and financial limitations. Private investment - motivated by financial return - often avoids much risk. Private philanthropic capital is much less accountable and thus able to try new ideas that just might succeed.
Solutions to society’s most challenging problems will require innovation, necessarily involving risk. Dedicated to a purely social return on investment, philanthropic capital may well be the most effective and final stronghold for true risk-taking. Guided by your mission, be willing to take some “moonshots.”
—View philanthropic capital holistically.
Money donated to a private foundation or a donor-advised fund has already left the donor’s balance sheet, is legally owned by a 501(c)(3) and cannot be reclaimed. Usually, a small percentage of this money goes to grants. The rest is usually invested for income — often without regard for its impact.
Bizarrely, such capital can be invested in companies that directly oppose the donors’ mission. A foundation promoting health, for example, might invest in tobacco. A donor-advised fund devoted to girls’ empowerment might invest in companies that employ girls in foreign sweatshops. A foundation fighting climate change might invest in fossil fuels.
Philanthropic capital should be invested not only to avoid contradiction with your mission, but also to help achieve that mission. Viewing such capital holistically, investing it for impact and financial return, can unleash billions of dollars toward improving the world.
—View philanthropy as a partnership.
Rather than taking a “we’re here to solve your problems” approach, consider philanthropy as a partnership — a collaboration between you and the needs of the nonprofit. Organizations seeking support usually have great insights into strategies and solutions. A partnership approach — where both parties work as equals to achieve their missions - diminishes power dynamics and enhances outcomes.
When the kids are getting older (and maybe having children of their own) it’s harder for many families to find the time and focus to work together on joint projects. Philanthropy provides an opportunity to come together to share values, solve problems, learn, have fun and enjoy this next phase of the family’s life.©2020 Bruce DeBoskey. Distributed by Tribune Content Agency, LLC.