August 30, 2012

"Finding Your Philanthropy Compass" Series: A Guide to More Strategic Giving

This is the first post in our new series on "Finding Your Philanthropy Compass." We invite you to tell us what you think by commenting below or with #PhilanthropyCompass on Twitter. You can follow Give Smart updates at @BridgespanGroup.

By: The Bridgespan Group
If you're a donor who wants to get more serious about philanthropy, it's likely that you're craving some practical guidance. That's why we're pleased to introduce our newest tool, "Finding Your Philanthropy Compass." Moving from writing checks that support your favorite organizations to becoming more strategic and intentional with your giving can be a confusing process. So immense are social and environmental needs that it’s often difficult to decide where to start, how to proceed, and how much time, effort, and funding to expend in any given direction. This is particularly true when you are giving very large sums of money, and are planning to keep giving for a long time. In other words, getting truly involved in philanthropy can be like going on a voyage in uncharted waters.

To help you navigate the ocean of needs and worthy causes you will face, you'll want to identify the guiding principles of your philanthropy to create what we call a philanthropy compass. You'll use your values and beliefs as a North Star to navigate the journey towards getting better results. You’ll factor in the practical realities of what your time, money, and influence can really achieve. And along the way, this compass will provide a steady guide for you as you navigate this journey, and for those who come after you.

Each Thursday for the next six weeks, we're going to present you with a different component of the compass you'll want to create, such as your philanthropic mission statement or your philanthropic areas of focus. This week, we'd like to offer four fundamental questions you'll want to answer before going further:
  • Have I thought about how my family and others close to me will be involved in my giving? In particular, am I (or are we) clear on whether and how I/we will make decisions?
    If you answered “no” to either of these questions, take some time to think through the appropriate roles for those around you. You may do this alone, or with someone you trust deeply. (See an additional resource on working with your family.)

  • Have I determined how much of my time I’m willing to commit to my philanthropy?
    Your initial answer doesn’t have to be set in stone, but having a general sense—whether this will be a few hours a week or a full-time job for you—will help you set reasonable expectations for what you’ll be able to accomplish. (Bear in mind, it’s not unusual to wind up surprised by just how much time you will spend once the process is underway.)

  • Have I settled on one or more legal structures through which to conduct my giving?
    What giving instruments will you employ—for example, a private foundation, a donor-advised fund (DAF), or some combination of both—early on? You may wish to read "What Legal Structure or Structures Should I Use to Give My Money Away?" to familiarize yourself with the available options. Regardless of your choice, there are tax and other legal implications so you will likely want to work with a lawyer or financial advisor to make decisions. And as with other facets of your philanthropy you may find that you will reassess the appropriate structure for your giving over time.

  • Have I decided whether I will give beyond my lifetime?
    Deciding on when you want to give your money away depends on your personal beliefs and goals. For guidance, see "The Philanthropist's Dilemma: Do I Spend Down or Form a Foundation in Perpetuity?"

As mentioned, we're going to tackle specific subjects each week (next week we'll discuss the importance of communicating your philanthropic intent with others). Keep your answers to the above questions handy when you check back next Thursday since they'll inform your choices at the next stage of this process and each thereafter. (You may wish to create a binder of your answers, or a folder on your computer for this series). If you'd like, you can read the full guide, "Finding Your Philanthropy Compass," on which this series will be based. The full guide includes examples of other notable philanthropists, such as Pierre and Pam Omidyar, and includes more in-depth discussions around key topics.

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