You Don't Need a Private Foundation to Give Strategically

Much of what is written about “best practices in philanthropy” makes it seem as though private foundations have the market cornered when it comes to giving strategically. However, the same practices can – and should – be applied to all charitable giving, whether it’s done via checkbook, charitable lead or remainder trusts or through a donor-advised fund at a community foundation.

For example, many donors find that developing a mission statement helps to situate their giving in the context of family history and values while clarifying a purpose for their giving activities. A well written mission statement outlines the specific issue areas in which donors plan to invest, the impacts they hope to achieve, and the strategies they intend to employ to realize their goals.

Donors giving as a family may be interested in ensuring harmony among successive generations. Legacy statements record a founding generation’s motivations for creating a philanthropic entity and outline the objectives they hope to achieve through their charitable endeavors. These expressions of personal values and charitable intent give future generations a reference point to consult should doubts surface about how to focus their giving.

Further, thorough research of prospective grantees’ financial health, governance structure and social impact is paramount for all donors. A meaningful due diligence process will not only ensure that a giving vehicle is in compliance with legal requirements, but also that an organization has the capacity to make good on a donor’s gift. In addition to reviewing publicly available information on an organization’s website and in its annual report or Form 990, it is often most informative to meet with staff and board members in person to get a feel for how their organization operates on a daily basis. Many organizations even offer formal group visits for donors to their work sites—both locally and around the world.

Finally, the greatest resources for donors are often their peers. Seeking out opportunities to collaborate with like-minded funders around projects of mutual interest can help donors to leverage their charitable dollars and create a more enriching giving experience. In fact, research has indicated that donors who give collaboratively are more likely to conduct research on organizations, provide general operating support, review performance indicators and take into account cultural differences, as well as race, class and gender considerations when making funding decisions. Community foundations and Regional Associations of Grantmakers can serve as excellent platforms to connect donors to one another.

Deliberate, effective philanthropy is not the sole purview of private foundations, which according to Giving USA 2011, constitute only 14% of total contributions. It is important for all donors to feel empowered to achieve their philanthropic visions, regardless of how much they have to give and how they choose to give it.

Guest Post Authored by: Meg Lassar, analyst with Strategic Philanthropy, Ltd., a global philanthropic advisory firm headquartered in Chicago.