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Sure, you donate money. But are you making an impact?

Some people spend more time researching what television to buy than they do picking a charity

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Charitable giving is an art often riddled with uncertainty, but it’s about a lot more than simply giving money away. It’s about investing in the greater good to improve the world in a meaningful way.

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But how can you ensure that your gifts will be meaningful? Here are five steps that donors can take to bolster their giving impact.

1. Focus on how to give, not on how much you have to give.

Virtually all of my conversations with clients begin like this: “I’m no Bill Gates, but…”, or “My giving isn’t really that significant, but…” or “I only give a small amount away here or there, but…”

But it’s not what you give that matters. It’s how. (Both Bill Gates and Warren Buffett have said their money alone can’t solve the global problems they’re trying to tackle, and they’re the richest philanthropists on the planet!) Whether you’re giving $50, $5,000 or $50 million, your money can make a difference as long as you seek out charities where your support is actually needed, and give in ways that will actually help. One hundred dollars given wisely will go a lot further than $10,000 given without forethought.

2. Balance your passion for the issue with an understanding of its core elements.

If you want to be an impactful giver, first you have to understand the problem you’re trying to address.

Let’s say you’re passionate about tackling global poverty or climate change. Those issues are obviously far too big for any one donor to tackle. If you want to see a faster rate of change, but are unsure where to begin or what to prioritize, the most useful place to start (or re-start) is by developing a thorough understanding of the context for the problem.

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Begin by asking yourself how big the problem is. Why does it exist? Whom does it most affect? What are its individual, economic and societal costs? What top-down, bottom-up, data-driven solutions already exist to address it? Where will interventions help the most? How can my contribution expand or lend nuance to the current understanding of the issue?

Once you’ve narrowed your focus, assessed its core elements and determined where change is likeliest to happen, you can target your funding with sniper-like precision.

3. Do your homework.

In my experience, people spend more time researching what television to buy than they do making charitable decisions. But you can’t make sound giving decisions unless you do your due diligence. Here are some benchmarks you can use to assess the transparency and accountability of the charity or project you’re looking to support:

  1. Do they make audited financial statements, budgets and government regulatory filings readily available to you?
  2. What about annual reports, newsletters, program pilots and evaluations?
  3. Are they open and willing to share?

Once you’re reviewed the data, visit the charities or projects you intend to support and kick the tires. Engage in a dialogue and form relationships with management and program staff as well as board members, the volunteers who run day-to-day operations or the direct beneficiaries of the charity or program. No time? There’s a plethora of online resources and forums, as well as charity intermediaries (public or community foundations, charity review websites and donation platforms) and philanthropic advisors who can help you determine whether your giving decision is commensurate with your goals and the best one for you to make.

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4. Decide whether you want to make an impact now or later.

Do you believe the needs of today are more important than those of tomorrow? Or do you prefer to pool resources, secure capital and invest in the distant future? There are rich and poor charities, or as I prefer to think of them, fat and slim ones.

Fat charities are focused on the legacy of the distant future, have large investment accounts and fundraise because they can, not because they face an immediate need for funds. Thin charities, on the other hand, likely have only enough cash on hand to last a year or less, and the money they raise will almost certainly be put to use today.

If you care about now, you’ll want to direct your giving to a charity or program that will spend your donation today. For the yearly donor, who can’t possibly fund all the deserving charities or programs vying for their charitable dollars, and the legacy donor, who values perpetuity, understanding this notion is absolutely crucial.

5. Evaluate, evaluate, evaluate.

If you want to move the needle on creating change, you’ve got to measure and evaluate results. When choosing a charity, a new strategy or a project under way, analyzing results and impact achieved (or not) will help you determine if your funding works, doesn’t work, and whether and how you should continue.

More importantly, results (and their measurement and management) provide lessons you can apply to any future giving. You can have the most cost efficient charity or opportunity in the world, but is it cost-effective?

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For instance, it is possible for two food banks to have different levels of fundraising and administrative costs, where one is badly run and wastes 95% of its income (on parties and gifts), but when given a $10,000 donation feeds the same number of families. Surely one appears more wasteful than the other, and raises serious questions about management, but it can perform (sometimes outperform) a less wasteful, similar program.

How might gains in effectiveness compensate for the losses? Does the charity or strategy achieve what it sets out to achieve? How do you know? Is progress being made, measured, evaluated and improved upon? How does it compare to the progress and results of other charities, programs, strategies?

Don’t get hung up on the need to demonstrate every last drop of impact, or conduct a complete, randomized control study. Sometimes simple, consistent tracking on the back of a napkin can provide just as many insights. Interim progress measures can be equally useful. The point is to start measuring what matters and to adjust and refine your approach to one that aligns with your giving goals and positively impacts progress toward the change you intend to make.

Bri Trypuc is a Toronto-based independent philanthropy consultant and a co-creator of Charity Intelligence Canada. She is also the Executive Director of the Robert Kerr Foundation, a private foundation committed to addressing basic and urgent needs to improve the lives of children and the homeless.

Bri Trypuc
Bri Trypuc

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