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With close to 2 million IRS-registered charities in the U.S., countless new tools for giving, and social problems that are more visible than ever before, achieving maximum impact demands an informed strategy.
More and more, donors are rejecting traditional models—handing over assets to long-standing institutions, say—in favor of alternate routes: giving to donor-advised funds, establishing for-profit entities, and donating to nonprofit start-ups that are rethinking every arena of civic and social services.
Yes, effective giving can often be as simple as writing a check, but when it comes to your capital, your time, and the causes you care about, a few extra steps can ensure that your gifts make a real difference.
The Latest Methods
Joel Fleishman, director of Duke University’s Center for Strategic Philanthropy & Civil Society and author of the new book Putting Wealth to Work, says patterns in philanthropy are shifting, thanks to changes in attitudes, tech, and media. He spotlights three current approaches.
Giving While Living
While the patrons of years past (think Carnegie or Rockefeller) often contributed to charity after retirement or with endowments in their wills, today’s donors like seeing the results of their largesse in their lifetimes. Case in point: the Giving Pledge, an initiative that urges the world’s wealthiest to commit more than half of their fortunes while still alive.
These allow participants to deposit money into an account run by a brokerage firm and then distribute it to charities at a later date (like a health savings account but for philanthropy). They offer flexibility, in that donors can recommend grants at any time, and faster tax write-offs (for the year funds are deposited, not donated).
“We are more globally conscious today than ever before,” Fleishman says. “A 24-7 news cycle and the Internet have widened the horizons of donors.” To help them contribute on a global scale, the website GiveWell points to select international charities that meet its stringent standards for effectiveness.
What’s More Valuable: Time or Money?
It depends what you're trying to accomplish, but making a significant impact requires both.
EXPAND A HOBBY. Volunteer Match, a recruiting website used by over 100,000 nonprofits, lets you tailor searches according to your interests.
TAP YOUR NETWORK. Social capital can be more effective than actual capital. If you have 5,000-plus social-media followers, work with an NGO to help promote its latest campaign.
PARTICIPATE IN INTERNATIONAL AID. Unless you’re trained in disaster relief, traveling to a crisis can put a strain on the area’s resources. Find a long-term program and write a check instead.
APPLY A SKILL SET. The service Catchafire matches professionals with nonprofits based on talents, location, and availability.
COMMIT TO A CAUSE. Ensuring that your funds accomplish more requires being an active participant in the grantee’s operations and staying informed on the progress.
Design a Giving Strategy Now
We compiled the essential steps for creating and maintaining a coherent giving scheme. »
Mobilize the Next Generation to Give
While philanthropic households of the past used to pass the baton from one generation to the next, today’s families are actively working together in their gifting. »
Make Your Dollar Go Further
Four surefire ways to make sure your money will have an impact. »
You can use your American Express® Card to make a donation or redeem Membership Rewards® points to benefit a wide range of charities that support arts, education, and many other important causes. Visit amex.justgive.org/departures to learn more. Terms apply.