Any time you choose certain investments and move your money into particular accounts at specific times of the year, you’re being strategic with your money. You’re trying to make each dollar work as hard for you as it possibly can.
Why wouldn’t you be equally intentional with your philanthropic investments?
Just like the approach you take to managing your personal finances will depend on your personal goals, the same is true for strategic philanthropy.
Anyone can be philanthropic. But strategic philanthropy requires intention, focus, and a results-oriented approach to donating money and assets.
What is Strategic Philanthropy?
To define strategic philanthropy, it can help to look at the definition of “strategic,” which is:
“Relating to the identification of long-term or overall aims and interests and the means of achieving them.” ~Oxford Languages
When applying that definition to philanthropy, it clarifies the need to donate to certain causes, not just because you believe in them, but because those donations will help move the needle when it comes to building the kind of world you want to see.
How to Create a Philanthropic Strategy
Saying you want to be strategic about your philanthropy is one thing. Actually creating a strategy is another matter entirely, so let’s go through the steps.
1. Align your Philanthropy with Your Goals and Core Values
The first step to making your philanthropy strategic is to make sure it aligns with your goals and core values.
This requires getting deeper than simply giving to “a cause you believe in.” Of course, we all donate to organizations whose missions matter to us, but we also have many causes we would like to support. How do we prioritize?
Strategic philanthropy requires you to step back and identify the core values driving your giving. What is most important to you? What populations do you want to serve? What aspects of the world would you like to change? Which ones would you want to keep the same?
Once you’ve determined what you want to achieve with your philanthropy, you can look for organizations that are working to make those goals a reality
2. Define Success
Defining success for philanthropic efforts is easier said than done, largely because philanthropy tends to have a focus on long-term goals, which means you might not always get to see the full impact of your donations.
But strategic philanthropy requires you to focus on the results of your giving.
You probably won’t see everything you want to see after a few months, or even a few years, but you should be able to identify an impact over time as a result of your donations.
One way to measure results for some organizations is the number served, but that might not tell the whole story. The best way to determine how to measure success is to ask staff at the supported organizations what metrics THEY use. These are the people closest to the work, and they know what the real key indicators of improvement are for their programs.
Examples of strong key indicators for impact include:
- Health outcomes
- Educational attainment
- Job placement
- Economic self-sufficiency
And don’t forget to include qualitative data. When you’re trying to make the world a better place, there’s no greater evidence of success than people telling you how their lives were made better by your philanthropic efforts.
3. Maximize the Impact of Your Philanthropic Investments
Just like a financial strategy involves making the most of every dollar, strategic philanthropy likewise involves considering your opportunities for giving and determining which option (or combination of options) will allow your philanthropy to make the biggest difference.
That goes far beyond how much you give. It includes decisions around:
- Giving your money all at once or breaking it up into installments
- Contributing cash, assets, or a combination of both
- Including philanthropy in your estate plan
- Establishing a private foundation or using a donor-advised fund for long-term giving
4. Measure Your Results
Periodically reviewing the impact your donations are having can help you adjust your strategy moving forward to see if a different approach might be more effective.
Why Would I do All of This?
Being strategic with your philanthropy offers some unique benefits, including:
- Creating sustainable change. It’s easy to give money to solve a short-term problem, but creating real change that lasts years, even generations, takes more time and effort. Isn’t that worth it?
- Empowering communities. At a time when things are more chaotic than they’ve been in a long time, it’s easy to feel like you have no control over your situation. But strategic philanthropy reminds you and others how powerful you can be, both as an individual and as a community. And that’s priceless.
- Shaping public policy. When public policy is moving in a direction you don’t like, it’s important to remember that our government gets its power from the people it serves. If it’s not serving you, strategic philanthropy can be used to either shape public policy, or fill in the gaps left by an inefficient public policy.
Why Hire a Philanthropic Advisor?
A philanthropic advisor can turn haphazard donations into strategic philanthropy. I can help you define your philanthropic goals and create a plan to make those goals a reality.
I can also work alongside your financial advisor to make sure your financial strategy and philanthropic strategy are aligned. That way you can take advantage of smart tax planning while having the biggest impact on the world that you can.
If you’re curious about how we can change the world together, let’s talk. I would love to hear about your philanthropic goals and interests. You can go here to start the conversation.