“Every dollar makes a difference.” We’ve all heard it before, but most of us don’t even know where to begin giving that dollar. Stepping into one’s philanthropic power takes time and planning in order tostrategically use money to make a difference.
If you are thinking that philanthropy is something that is only accessible to the wealthy, think again. While the wealthy do their part, an average of80 percent of all U.S. householdsdonate to charity in a given year—typically totaling between $2,000 and $3,000, or the equivalent of 3 percent to 10 percent of household income. It’s also worth noting thatwomen are more likely to give than men.
This Giving Tuesday, think beyond what you can do today and look ahead to how you can give to worthy charities all year long. Whether you’re just starting out as a budding philanthropist on a tight budget or you’re further along in your career with more flexible spending, it’s critical to create a giving plan in order to maximize your impact. With a little planning, it is rather simple to evolve from hitting a one-time Facebook donation button to becoming a more thoughtful, strategic philanthropist.
Not unlike the experience of dating with the goal of finding a long-term relationship, creating a plan requires some exploration, time and effort. Much the way you create guidelines to manage your budget, a giving plan creates boundaries for your donations. Your giving plan will ensure that your dollars are given with purpose and your generosity creates impact.
No matter where you are on your financial journey, there are a few simple steps you can take to transform your approach to philanthropy and give more thoughtfully and frequently.
Find your ideal match.
Think back to the last donation you made. Was it planned? Or was it a spur-of-the-moment decision? In today’s digital age, it’s becoming increasingly easier to fund our passions. It seems like there is no end to the causes we care about, and there’s a growing number of organizations that rely on our funding.
With a dizzying array of options, creating a strategy is key to ensuring your giving remains impactful and within your financial means. To begin your giving plan, take a moment to reflect on the values that matter to you most.
What causes do you genuinely feel passionate about? Try to be as specific as possible. For example, if you care about education, what aspect of education do you want to support? Do you want to see more arts programming for kids? Or would you rather see more STEM education within your community? Take time to think about where you want to create real-world impact, and then research organizations accordingly. Share your ideas with friends and family members to get their input, or consult the many online resources, includingnational databasesandlocal reference guidesthat sort and rate charitable organizations.
Rather than throwing your money at a scatter plot of nonprofit organizations or charitable causes, a giving plan requires you to select one or two causes you care about. This will ensure your philanthropy isn’t stretched too thin and your dollar is most effective.
Choosing one or two causes doesn’t mean you don’t care about other issues—it just means that you’re making a concentrated effort to find purpose within your financial means.
Scale your approach so it fits your budget, and a charity's needs.
Every organization has different financial needs. One of the simplest ways to ensure that your giving plan is effective involves scaling yourdonations to fit both your budgetand the needs of an organization. Not everyone is going to have a Melinda Gates level of wealth. But, as many nonprofits will tell you, changing someone’s life doesn’t require a multimillion-dollar check.
First, determine what you can afford to give in a month. Reflect on how yourbudgetis performing. Is it flexible? Are there areas where you can reduce your “fun” spending in favor of increasing your giving? Consider replacing your daily latte habit with a $20 monthly donation. Or skip that fancy indoor cycling class once a month and donate the funds to your favorite organization.
Once you’ve established a monthly allowance, the next step is to scale your donation to a cause. If you’re giving $250 or less a month, the difference you’re making might be clearer at a local level. For example, a small to midsize donation might go a lot further at a community domestic violence shelter rather than a high-profile, national women’s health organization.
At the end of the day, the easiest way to see how your money is being used is to ask. Don’t be afraid to meet with the local nonprofits you’re interested in. Give them a call if you’re not in the area. Organizations love to chat with prospective donors, and it will give you a chance to decide if it’s the right organization for you.
For those with a small or inflexible budget, get creative with new forms of microfinancing. Many organizations change lives by forgoing a donation in favor of a loan. For as little as $25, you can lend money to global entrepreneurs who would either be financially excluded from traditional loans or are directly creating social impact in their community. One organization that does this isKiva, which has a historical repayment rate of 97 percent.
Grow with your plan and give in new ways.
A donation isn’t the end of your giving plan. Once you feel comfortable with the cause or handful of nonprofits you support, consider connecting in other ways. Sign up for an email newsletter, learn more about events or volunteering opportunities, contact the staff members and explore opportunities for member networking orboard positions.
While engaging with philanthropy is a practical way to “put your money where your mouth is,” it’s also a path that can open doors to your professional and personal future. Your donation is usually just the beginning.
Regardless of your financial background, you can be sure that a giving plan will infuse both meaning and impact into your life. It balances your own needs, as well as addresses the needs or your community, cultivating meaningful relationships with the world around you.
All opinions expressed by Linda Davis Taylor are solely her opinions and do not necessarilyreflect those of Clifford Swan Investment Counselors. You should not treat any opinion expressed by Ms. Taylor as a specific recommendation to make a particular investment. Ms. Taylor’s opinions are based upon information she considers reliable.