5 Ways to Optimize Your Charitable Giving - David DeWolf

5 Ways to Optimize Your Charitable Giving

700 466 David DeWolf

The recent success of the ALS #IceBucketChallenge has brought about a renewed focus to charitable giving. Over the past month (from July 29 through August 29), ALS received just over $101 Million dollars in donations compared to just under $3 Million during the same period last year: an undeniable–and unexpected–windfall for the organization.

Supporting philanthropic causes is undoubtedly a good thing, but is it wise for a charitable organization to receive such a huge surge of unexpected capital?Scaling an organization and making good use of newfound capital are difficult challenges for most for-profit organizations. Unfortunately most charitable organizations are not nearly as mature as their for-profit counterparts.

I have no clue whether the ALS was prepared for such a windfall, or whether their management, strategy, and tactics are prepared to handle their newfound success. What I do know is that on the surface this capital could have had a much more significant impact if the generous donors were just as deliberate about their donation as they were about their creative ice bucket ways.

Here are five strategies I’ve put in place over the years to ensure that my philanthropic investments are put to good use.

1. Don’t contribute to random causes.

Give to what you’re deeply passionate about.

Teresa and I have chosen to focus our efforts on philanthropic causes that we’re deeply passionate about. We both have a heart for children, especially those who are underprivileged. We believe in the power of education and the formation of leaders and have both found that our own educations and formation experiences were life-changing.

As a result, we contribute to organizations that either provide for the education of children in need or help to develop the next generation of leaders (hopefully both!). Our passion for the mission of the organizations we support helps us to stay aware of what our funds are supporting. This helps us to ensure that the organizations are good stewards of their funds and motivates us to hold them accountable for driving results.

2. Don’t just give money.

Give your time, talent, and treasure.

We have chosen to combine our financial contributions with a donation of time and talent. If something is not worth getting personally involved in, then most of the time we simply won’t contribute.

By giving of ourselves, we’re able to help shape the direction of the organizations we get involved with and, once again, ensure that the organization is being a good steward and driving the types of results we expect. We find that by giving our time, talent, and treasure, we’re able to multiply the donations we give in an exponential manner.

3. Don’t scatter your resources.

Focus them where they’ll have the greatest impact.

There are dozens of charities that our family believes in and would love to donate to. Unfortunately, we simply can’t afford to give to all of them. Instead of spreading our donations around among a myriad of good charities, we choose to invest heavily in just a handful.

Every year Teresa and I pick anywhere from three to five charities that we’d like to be involved in. We create a plan for how we will split our donations between them, how we will provide broader support, and where our talents might complement the work they are doing.

Rarely, if ever, do we change this plan until the year is up. We want to have a significant impact with what we give and we find it hard to do so if we spread ourselves too thin or fail to allow for the proper runway.

4. Don’t say yes right off the bat.

Make sure that you’re giving to a cause that really needs you.

One of the benefits of an “annual” plan for charitable contributions is that it’s easy to say no. So many people ask for a donation off the cuff, without having any sort of history with you. While it may be a good cause, and you may not want to disappoint, it’s likely not prudent to just write a check.

I have a standard answer when someone asks me for support. I tell them about our approach to giving and ask them to follow up with me throughout the year and remind me of their need during December. I also ask them to think about how Teresa and I may be able to support the organization beyond money and ask them to present a plan for how we might collaborate with the organization.

Most organizations fall off the radar and refuse to do the hard work. Those that don’t and are aligned with our priorities typically bubble to the top.

5. Don’t just give to charities.

Help build up the next generation of leaders.

Finally, I don’t just give to charities, I give back to the community. I intentionally look for young professionals who I believe in and who share a common set of values with me. I believe that this creates leverage – by multiplying myself. These individuals tend to be entrepreneurs or young professionals in whom I see a bright future. I have provided mentorship, invested in their businesses, and have gone all out in helping them become successful.

Of course, you can’t help everyone, but you can optimize the impact that you do have. By being disciplined in how you give, you may find that you feel better about your giving, see a greater impact from your involvement, and become even more generous.

What’s your philosophy about giving? Do you have a disciplined approach? What have you found to be most beneficial?