Philanthropy is simply giving back to others, at a base level. This can be done to positively impact needs or causes. There are a few ways to put together a smart charitable strategy that increases your effectiveness when you give.
If you create a charitable plan, you’ll want to create one that doesn’t just focus its goal on the end result you’d like. It should also be focused on clear and measurable goals and the steps you need to take to achieve them. This can be easily done by creating something like a mission statement to better assist you in defining your purpose for giving what you are and figuring out how you can measure your progress against the goals you set to get to your end result.
Most people divide their assets up into three main areas: people such as heirs, the government, and charity. Make sure that when you’re dividing your assets up, you keep in mind how giving to each group will affect you financially. You’ll want to be smart about when and what you give. This will help you diversify your portfolio, minimize the tax consequences, and optimize the giving.
An important thing to keep in mind is who you want to involve in your giving and to what end. Also, think about how they will affect your goals. Communicate your goals to these people to ensure successful giving. Set expectations early on in your giving and maintain an open mind. When it comes to your money, you will inevitably have to discuss what happens to your assets after you pass.
You might have trouble deciding what the best tool to give with is. There are six key factors to consider that will help you choose which giving option best fits for your goals. You should rank each of these by importance to you to allow for a clear vision of your giving options. These factors are tax efficacy, cost, control, legacy options, distribution to charity, and recognition versus anonymity.
Finally, you have to have a way to evaluate and monitor the nonprofit organizations that you give to. This can be a difficult step for some. Review the organization’s IRS tax status and financials and governance standards. After you’ve given, make sure you stay in contact with representatives of that nonprofit to monitor the results of your giving. Especially if you’re giving to a specific project or cause.