How to Decide Where to Donate Your Money
Philanthropy holds immense promise in the 21st century. Global giving is growing and gaining visibility, creating opportunities never seen before. Recent years have seen a marked and promising change — giving wealthy individuals, families and corporations the opportunity to give more, to do it more strategically and to increase the impact of their social investments.
An increase in philanthropy
A growing number of philanthropists are establishing foundations and other giving structures to focus, practice and amplify their social investments.
There appears to be a growing belief that institutional philanthropy can not only encourage more strategic investment approaches but also facilitate collaboration, serve as a role model for others, and have a greater impact on the economic and social challenges being addressed.
Despite this increase in philanthropy, charitable giving is not satisfying its potential. Only 40 percent of investors surveyed for a UBS Investor Watch report, “Doing Well at Doing Good,” were fully satisfied personally with the results of their giving, and according to the UN’s Sustainable Development Goals, we need $5 trillion to $7 trillion of annual investment to meet the world’s needs. While there are more than 260,000 unique foundations in 39 countries with assets exceeding $1.5 trillion, we are nowhere near that $5 trillion to $7 trillion mark in charitable giving.
More effective giving through planning
There is a way to scale impact — through collaboration. The global philanthropy report reveals over 90 percent of global foundations operate independently, and most of them are focused on the same causes: education, human services, health, and arts and culture. This could be a result of a “checkbook philanthropy” approach of responding to requests as they come in without incorporating philanthropic giving into a coordinated, strategic aspect of financial planning.
According to a UBS Investor Watch report, millionaires who plan the financial aspects of their giving view their approach as more effective and are also more satisfied with their impact; however, just 9 percent of wealthy investors receive advice from their financial advisors on charitable giving.
When it comes to supporting a philanthropic foundation, it is important to realise the widespread need. Who needs it? What do they need? Which groups can you trust? What is your passion? International NGOs like the ones which dealt with Hurricane Harvey, Irma, Jose and Maria. In between, there were floods, earthquakes and wildfires, too. Natural disasters hammer a large area of the world and leave death and devastation behind. Millions are without power and drinkable water.
“It can be a lot for a donor,” said Katie Rusnock, who leads a team that tracks wrongdoing at Charity Navigator, which grades nonprofits on their financial health and transparency.
The animal charities, Wildlife Conservation and Pet and Animal Welfare Organisations, environmental, health, education, and culture charities are all essential part of the global mission.
Here are a few things to consider as you decide how best to help.
Identify your values before donating
When considering how to give, it’s helpful to start by asking what motivates you.
“You pick the issue with your heart and you pick the organisation with your head,” said Jacob Harold, the chief executive of GuideStar, a nonprofit that publishes information about charities in an effort to promote transparency.
People with ties to a region may want to give locally. Animal lovers may want to give to a shelter. Others may want their money directed to certain groups of people, like children, or causes, like public health.
Many opt to leave the decision to the charities themselves, which is sometimes best: “If you’re trusting them with your money, you should trust them to spend it well,” Mr. Harold said.
Your time is a resource, too, and you should decide how you want to spend it.
Some people prefer to deeply research the charities they support, while others simply want to know they’re giving to a trustworthy group.
For those who prefer the latter, Mr. Harold recommends groups like Global Giving, which collects donations and redistributes the funds to vetted, locally focused organisations.
Do your research before you give
Evaluating a charity is often the most daunting part of donating, but it doesn’t have to be.
Tax filings and other documents can shed light on a group’s operations, but donors should look beyond the numbers, too, experts said. That includes reviewing an organisation’s website, annual report, governing board and mission.
“If the organisation is only talking about the problem, but not talking about how the work they do leads to solutions to that problem, that is a red flag,” Mr. Harold said.
Ask questions about the charity, including how much experience it has, how long it’s been around, how it measures accomplishments, and how others in the field talk about it.
Cash is often the best way to help
It may feel impersonal, but money is often the most useful form of donation. Unlike goods, financial gifts have no associated transportation costs.
According to a NYT report, $20 pair of jeans, for example, would cost about $165 to ship from Washington, D.C., to the capital of Honduras, according to an online calculator developed by the University of Rhode Island. That money could instead be used locally to buy 24 blankets, nearly 33,000 litres of water or a variety of other supplies.
There are secondary benefits, too: With cash, relief organisations can support local economies, according to the Center for International Disaster Information, which was created by the United States Agency for International Development.
Follow up later. Recovery takes a long time.
“Becoming a repeated supporter is super helpful to the organisations,” Ms. Rusnock said.
Donations surge in the immediate aftermath of a disaster, but recoveries unfold over a much longer timeline.
For that reason, donors should consider sustained involvement with charities, whether that involves checking up on how resources were spent and how needs have changed weeks or months down the line or making automatic monthly contributions.
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RESOURCES:
https://www.cnbc.com/2018/06/13/use-a-detailed-strategy-to-make-the-most-of-your-philanthropy.html
https://www.nytimes.com/topic/subject/philanthropy
