Philanthropy Sucks, Pt 1: 5 ways Donors can Grow Giving

Ok, philanthropy doesn’t suck. In fact, it’s a beautiful thing. What I mean is, over the last 50 years, the number of nonprofits has increased dramatically, the field of fundraising has professionalized and the U.S. now has over 1 million millionaires. Yet, giving in the U.S., as a percentage of GDP, has not even BUDGED! Here’s how YOU can help fix it.

Last week, a combination of giving rockstars (including Adrian Sargeant, AFP, The Center on Philanthropy at Indiana University, Blackbaud, Hartsook Companies & others) united and released the Growing Philanthropy Report which is broken down into four themes with 8-10 sub-points per theme. I’ve pulled out (and added some of my own of) the most actionable things you can do as a donor to help move the needle forward.

1. Give more

I know, I know, CRAZY HUH!?!? (with *scary fingers*)  In doing my personal household budgeting, I’ve come across a number of sample household budgets from various money gurus and finance websites. Some don’t even have a ‘philanthropy’ category and those that do – limit giving to 2-5% of your household income.  Push yourself.  In doing your upcoming 2012 budget, increase that line by just a few percentage points. If we all did that, think about what an incredible difference it would make.

2. Document your giving

One of my issues with the original idea that ‘giving hasn’t increased in 50 years’ is that TONS of people don’t document what they do give.  How many times have you done your taxes without itemizing your charitable donations? This leads to misinforming government and other entities about how much is given in the first place.  Get a receipt next the time you drop things off at Goodwill or take a package of diapers to a local shelter and include that in your taxes.

3. Plan your giving to make the most impact possible

This is a tough one. Most people spend more time planning their vacation than they do their philanthropic investments.  There’s a reason Bill Gates doesn’t just give everyone who asks $1000.  They’ve spent a long time thinking through their priorities and discussing what issues are most important to them and the communities they want to support.  You can do the same. No, not to the extent, but there’s nothing stopping you and your family from having a family meeting to discuss how you plan on investing your family’s philanthropic budget.  Think bigger. What’s the impact of your giving over the entire year or even a lifetime – what mark(s) do you want to make?  What issue(s) is most important to you?  Have a guide and try to stick close to it over the year, it’ll make saying ‘no’ to things you don’t truly care about that much easier, and saying ‘yes’ to your priorities a lot more enjoyable.

4. Communicate to organizations

They send you communication all the time. Send them some.  Tell them why you give (or don’t) and how you’d like to be communicated to in the future.  Call them, ask to speak with their Development Director and build the relationship. Ask questions. Be an informed supporter.  You’ll have a better experience and know more about the impact of your giving.

5. Understand overhead

Stop thinking and saying that your entire donation should ‘go straight to the cause’.  It all goes to the cause and a small piece of it helps make the entire thing happen. When you buy a case of Pepsi, you’re not just paying for the drink. In fact, I’d imagine much more of your money goes to the packaging, processing, advertising and employee salaries than the sugar and water it takes to make the drink itself.  Nonprofits need to pay competitive wages, market themselves to engage their community, rent office space and more.  Know that as a general rule of thumb, an organization spending 25% or less on fundraising and administration is considered proper. However, if an organization is in growth mode (expanding services & staff), it’s not unreasonable for that to be higher.  Beware of organizations claiming they have no overhead (they’re lying to you) and those that spend 99% of your dollar to raise more money (often the telephone-based associations of police chiefs, firemen, etc.) Moreover, the ratio of administrative costs should be only ONE of your many factors in choosing a charity to support.

As a donor – what will you do to grow giving?

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