Situation: Purposeful Giving
Many high net worth investors and business owners are searching for purposeful, strategic ways to give back but can’t seem to find the time or the right organization matching their objectives. What are the right causes to support? The possibilities can be overwhelming. Many of us find ourselves conflicted on the why, where, and how to get more involved in philanthropy with meaning.
The benefit of giving goes far beyond the ultimate charitable beneficiary. According to Laura McKnight, CEO of Crown Philanthropic Solutions, “Philanthropy is celebrating what it means to be human, which benefits both the receiver and the giver.” Giving back has lasting effects not only on those in need but also on the donor’s happiness and legacy. A thoughtful approach suggests that donors be intentional in what organizations to support and how.
- See your money put to work for causes important to you.
- Develop a relationship of trust with the charities and groups attempting to fulfill your mission.
- Align your purposeful giving with people and organizations you are proud to be working with.
- Identify the right type of charitable vehicle to make gifts from.
- Do your research. Dig into the organization’s Form 990, filed with the IRS, or visit GuideStar to get a better understanding of the charity’s expenses, including executive salaries, and the overall mission of the group. Check charity watchdog directories such as CharityNavigator and CharityWatch for a measure of the organization’s efficiency for funding programs with your donation.
- Visit with other board members about where they think the organization is headed and what their focus is going to be. Ask for references from other donors.
- Consider using philanthropy as a teaching moment for younger family members. Involving your children early can teach future generations the importance of using family resources to help others.
- Work with a financial and tax advisor to choose between vehicles such as charitable trusts, donor-advised funds, and family foundations to maximize charitable donations and long-term impact.
Deciding how to give back is a very personal decision. Ultimately, you should support your community in a way that is important to you. Reflect on your purpose for giving and get started — whether that means volunteering your time, taking a hands-on fundraising approach, or donating monetarily.