How can you prioritize philanthropic giving when managing your finances?

You want to make a positive difference in the world, but you also have to manage your own finances. How can you balance your philanthropic goals with your budget, savings, and investments? In this article, you will learn some tips and strategies to prioritize your giving without compromising your financial well-being.

1 Assess your values and passions

Before you decide how much and where to give, you need to reflect on what matters most to you. What are the causes, issues, or communities that you care about? What are the problems that you want to help solve? What are the values that guide your life and your giving? By clarifying your values and passions, you can align your philanthropy with your purpose and find more joy and satisfaction in your giving.

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Joanne Oppelt, MHA, CNE, CDE, CNC

Nonprofit MoneyMaker, Author, Trainer, and Growth Consultant
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One of the things you want to assess is how much impact you want to make. Not what you want to give, but what impact you want to make - for yourself, your family, and your community. Then you can look for a cause that wants to make the same kind of impact as you and has the giving tools that give you the kind of return you are looking for.

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2 Set a giving budget and plan

Once you have identified your values and passions, you need to determine how much you can afford to give. A common rule of thumb is to allocate 10% of your income to charity, but this may vary depending on your financial situation and goals. You can also consider other ways to give, such as donating your time, skills, or assets. To make your giving more effective and consistent, you should create a giving plan that outlines your priorities, criteria, and timeline for your donations. A giving plan can help you avoid impulse or guilt-driven giving and track your impact and progress.

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3 Research and evaluate charities

Not all charities are created equal. Some are more transparent, efficient, and impactful than others. To make sure your donations are used wisely and ethically, you should research and evaluate the charities that match your values and passions. You can use online tools and databases, such as Charity Navigator, GiveWell, or GuideStar, to compare and review different charities based on their financial health, accountability, and results. You can also look for evidence of their effectiveness, such as their theory of change, outcomes, and feedback from beneficiaries and stakeholders.

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Joanne Oppelt, MHA, CNE, CDE, CNC

Nonprofit MoneyMaker, Author, Trainer, and Growth Consultant
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Please do not evaluate a nonprofitâ€™s effectiveness or value based on arbitrary cultural norms like overhead. Itâ€™s impact that counts. If a nonprofit is not spending enough on overhead, they cannot grow and scale. Look at the total return on your investment, not some industry standard that inhibits growth.

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4 Diversify and optimize your giving portfolio

Just like your financial portfolio, your giving portfolio should be diversified and optimized to achieve your desired outcomes. You can diversify your giving by supporting different causes, sectors, or regions that address different aspects of the problem you care about. You can also diversify by giving to different types of organizations, such as grassroots, advocacy, or research groups, that have different roles and strategies in the social change ecosystem. To optimize your giving, you should allocate your resources based on the potential impact, cost-effectiveness, and scalability of each charity or intervention.

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Joanne Oppelt, MHA, CNE, CDE, CNC

Nonprofit MoneyMaker, Author, Trainer, and Growth Consultant
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I disagree. You should give to organizations that create impact, not just survive. And very few nonprofits accomplish that. I believe you should put all your marbles where your goals are being met, no matter how many or few agencies that is. Reward competence where it exists instead of incompetence, which is far easier to find.

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Kelly O'Connor, CFRE

Helping individuals, businesses, and nonprofits change lives and improve the world.
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I disagree with this strategy UNLESS you have multiple organizations and causes that you are close to, OR you have significant resources. Otherwise, this is not a philanthropic strategy, and you are not making the impact you otherwise could.

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5 Review and adjust your giving

Philanthropy is not a one-time transaction, but a continuous learning process. You should regularly review and adjust your giving based on your experience, feedback, and new information. You can use tools and methods, such as logic models, impact evaluations, or donor surveys, to measure and improve your giving performance and outcomes. You can also seek advice and feedback from experts, peers, or beneficiaries to learn from their insights and perspectives. By reviewing and adjusting your giving, you can enhance your philanthropic skills and competencies and increase your social impact.

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6 Hereâ€™s what else to consider

This is a space to share examples, stories, or insights that donâ€™t fit into any of the previous sections. What else would you like to add?

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How can you prioritize philanthropic giving when managing your finances?

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1 Assess your values and passions

2 Set a giving budget and plan

3 Research and evaluate charities

4 Diversify and optimize your giving portfolio

5 Review and adjust your giving

6 Hereâ€™s what else to consider

Philanthropy

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Directory

How can you prioritize philanthropic giving when managing your finances?

1

2

3

4

5

6

1 Assess your values and passions

2 Set a giving budget and plan

3 Research and evaluate charities

4 Diversify and optimize your giving portfolio

5 Review and adjust your giving

6 Hereâ€™s what else to consider

Philanthropy

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