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Learn to integrate high-impact giving into all of your donations, at year-end and year-round.
All donors have a "philanthropic portfolio" that includes gifts that aren't necessarily aimed at maximizing social impact. This includes impromptu donations to support our friends' interests, thank you gifts to our alma mater or hospital, or aid to support a church or temple where we belong. Increasingly, donors are also asking, "How can my money do more good?" As you think about the part of your portfolio aimed at creating more social impact, here's what to remember:
As the saying goes, "if you don't know where you're going, any road will get you there." High impact philanthropy starts first by asking, "What is the philanthropic goal of this donation?" That goal could be feeding the hungry, teaching kids to read, reducing addiction and mental illness, preventing child deaths from malaria, or any number of other worthy causes. Personal experiences often lead donors to want to help a particular community or address a particular cause. It is fine to let the heart choose the goal. Once you are clear about the goal, your head can then help you find the organizations to reach it.
Unlike a decade ago, donors no longer need to spend days doing their own due diligence or trying to interpret tax returns in the hope of identifying a nonprofit worthy of their gift. Organizations like the Center for High Impact Philanthropy now exist to do the legwork so that individual donors can get to impact faster and with more confidence. The high impact opportunities profiled in this guide—and many more on our website— offer specific options that our team has analyzed for program efficacy and cost-effectiveness. We’ve also provided a list of additional resources to help you better understand the causes you care about and identify nonprofits to support. Still can't find what you're looking for? You'll find a wealth of free information on our website.
Not even the Gates Foundation has enough money to solve the problems it seeks to address. To do more good, every donor needs to ask, "How can my money go the farthest?" Comparing nonprofit organizations can help answer that question, but don't just look at their expenses. That's literally, only half the equation. Instead, compare what the organization spends overall, to what it achieves. For example, it can cost approximately $2 to protect a child from measles in Mozambique, $1,400 to prevent newborn deaths in India, and about $2,500 to help an at-risk student in the U.S. finish college. Another way to think of bang-for-buck is to compare costs with societal benefits: For every $1 spent on a nurse visitation program, as a society we receive over $5 back from improved health, education, and employment outcomes. That's bang for buck thinking where the 'buck' is the money a nonprofit has to spend and the 'bang' is what it's able to achieve with that money.
By focusing on the goal, doing a little research, and thinking bang for buck, donors can make sure their annual giving reflects more than generosity and good intentions. It allows for year-round impact.
It's your right as a philanthropist to practice some due diligence (and even some healthy skepticism) before committing your funds to a particular organization. The nonprofits that see more funding aren't just doing impressive work. They're also transparent about how they're doing it. Just because someone asks you to support a worthy effort, doesn't mean you can't take some time to consider it—just like you would if someone was selling you an investment or a new product.
Here are some things you can do to avoid charitable fraud:
If a nonprofit, its staff, or board have been the subject of negative press or an official investigation, that is a clear red flag to proceed with caution before committing funds. One of the reasons that, for example, a cancer charity can generate so much goodwill is that many people have been affected by cancer. So, if you're interested in supporting cancer (or other) charities in honor of friends and family who have been affected, ask those individuals, "Are there any nonprofit organizations that really helped you and your family?"
Just because you want to support a great cause, doesn’t mean that every charity addressing that cause is just as great. GuideStar, Charity Navigator, BBB Wise Giving Alliance, and GiveWell all provide free financial and programmatic information to donors on specific nonprofits. Charity Navigator and GiveWell also assign the nonprofits ratings. You can also check the Center for High Impact Philanthropy for a wealth of information on how donors can maximize the impact of their giving.
By volunteering your time or speaking with staff and/or the people who benefit directly from the organization, funders get a first-hand look at how a nonprofit translates donor funds and other resources into programs that benefit clients.
By focusing on the goal, doing a little research, and thinking bang for buck, donors can make sure their annual giving reflects more than generosity and good intentions.
This article was excerpted from the Center for High Impact Philanthropy's "2016 Giving Guide," sponsored in part by Fidelity Charitable's Trustees' Philanthropy Fund. The guide features specific high-impact giving opportunities, handpicked by the center and analyzed for evidence of impact and cost-effectiveness, as well as more ways to improve the effectiveness of your giving.
The Center for High Impact Philanthropy is a multidisciplinary, nonprofit center housed at the University of Pennsylvania. The center provides actionable and evidence-based guidance for individuals who want to ensure that their philanthropy makes the greatest possible difference in the lives of others.Download the full report
Use the tools on this page to help identify other high-impact organizations that align with your giving goals.Try the tools
A donor-advised fund like the Giving Account can simplify your charitable giving and potentially help you give even more to the charities you love.Learn more about the Giving Account
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