During the holiday season, our mailboxes are overflowing with catalogs, holiday cards — and requests for donations. At this time of year, when people are feeling most generous, nonprofits work hard to raise needed funds.
Although important to nonprofit budgets, most year-end giving is transactional rather than transformational. Donors give once — often devoid of strategy — and nonprofits receive a one-time donation. Next holiday season, the whole process starts over.
Donors who wish to truly maximize the impact of their giving must develop a strategic rather than a random approach to philanthropy. As with any important decision — investment, business or personal — a thoughtful longer-term strategy enables you to determine what you want to achieve and how to do so effectively.
Following these seven key steps will help you get the most “bang” for your philanthropic buck.
—Examine your reasons for giving. Determine what you’re really trying to achieve with your giving (both for your family and your community) and what causes you’re passionate about. People often give to charities out of habit or because a friend who supports the cause asks them. Ask yourself: Does the nonprofit really do the work that matters the most to me and will help me achieve my goals?
—Involve your family. Talk with other family members, up and down the generations, to learn from each other what matters most and what values you share. Then, consider setting aside a portion of your “gift purchase” money for each other to be contributed to a collective “family and friends” cause that reflects your family’s desire to make a difference for others. In addition, put a donation to your favorite charities on your gift list and ask others for theirs.
—Research nonprofits. Make sure any nonprofit about to receive your money is currently approved by the IRS as a 501(c)(3). Look at financial reports on the organization’s website. Review IRS Form 990 filings, available online. For significant donations, meet with the nonprofit’s professional and volunteer leadership. To avoid fraud or waste, don’t ever give at the front door or over the phone.
—Ask the “so what?” question. Most nonprofits have admirable mission statements and appealing websites with lofty, unassailable goals. Rather than merely reviewing what they do, however, it is important to ask, “So what difference have you actually made? Where have you fallen short?”
—Go deep, not wide. No matter how much you give, it is better to give boldly to fewer nonprofits than to spread your funds thinly over many. Respond to legitimate matching gift opportunities and consider making a two to three year pledge.
—Contribute your time and talent. Volunteering is one of the best ways to really get to know the work of nonprofits, and many badly need your help. Volunteering levels the playing field, making it possible for people of all income levels to meaningfully contribute. It can also be a tremendous family experience.
—Start early in 2016. Think of your philanthropy as a different type of investment — one seeking an important social return. Research, engage others, develop a strategy, diversify, implement and evaluate. For significant gifts, seek advice from philanthropy experts and make your donations only after thoughtful consideration.
The giving season is a wonderful time of year when many people serve others and find ways to repair the world. Following these steps will not only help you achieve better outcomes for the causes you care about, it will help you find the joy and meaning of this special time of year.