5 Habits Of Effective Philanthropists
/The platform of Money & Mimosas is all about making money and making a difference. While you do not necessarily need money to make a difference, it sure does help. Whichever cause is near and dear to your heart, I’m sure there is a way that an injection of capital could create massive change. Building wealth is way more fun when you see it ripple out into society through the vehicle known as philanthropy.
The fun jumps to another level when your philanthropic efforts leads to tangible change that allows others to prosper. While donating here and there is commendable, your giving will be much more effective if you approach it with a strategy. Similar to your investing or business strategy, having a philanthropic strategy will improve the chances that the change you wish to see in the world will come to fruition.
Here are five habits of effective philanthropists to ensure that their giving creates tangible change.
#1: Get educated on the issue
Effective philanthropists take the time to become educated on the causes they wish to focus on. Then, they do the work needed to remain informed about the issue(s) as they inevitably evolve. Just like entrepreneurs need to remain aware of market trends, a philanthropist needs to know the ins and outs of the communities and issues where they wish to see change. While some philanthropists may show up at a gala, shake hands with the CEO, kiss babies, none of these acts suggest actual expertise. Expertise comes from investing quality time talking to folks on the front lines of the issue(s) and unpacking the moving parts that have created the situation that needs to be overhauled. Great philanthropists are effective because they are reading books, studying policy, talking to the stakeholders, and doing whatever they can to truly understand how their money can help.
#2 Frame the issue
Folks usually begin their philanthropic journey by identifying an issue from a very high level. The high level could be poverty, health care, climate change, education, or another area. These are all very big subject areas with many angles that could be addressed.
Before drilling down to a particular focus, effective philanthropists will frame the issue by determining which angle they wish to address. Framing the issue typically involves people, places, or institutions.
For example, let’s say the high-level issue is health care.
People: You could frame the issue by examining the challenges that the elderly face with health care.
Places: You could frame the issue by examining the challenges that Americans face with the health care system.
Institutions: You could frame the issue by examining the challenges that organizations that offer free health care face. For example, Planned Parenthood.
Framing the issue is meant to help narrow the scope of your research. Once you’ve done your preliminary research, it is time to choose a focus.
#3 Narrow the Focus
Framing the issue can still be too broad for an effective philanthropic strategy. Of course, if someone stops there it’s not to say that their donating efforts are in vain. It just could be more effective if they continued to narrow the focus.
Continuing with the example above, let’s say you are disheartened by the health care system within the United States and want to do something about it. Narrowing your focus could look like, addressing the lack of accessible health care for women in Oakland, California. From there, you could identify all of the non-profits in the area that are working in the local community to fix this issue.
The reason for narrowing the focus is ultimately because you want to get to the root of the problem and eradicate it. All too often, philanthropy is used as a vehicle to throw money at a problem and not used as a means to fix the issue entirely. Funding the solution, rather than funding the problem, requires having a clear focus on the challenge at hand, a clear vision of the change you wish to see, and a clear strategy for accomplishing this.
#4 Work closely with the community
Once you’ve determined your area of focus, it is time to work closely with the communities you wish to serve. Philanthropists who are simply chasing fame will show up for a photo op and never talk to the individuals who are working very hard to create real change. Ultimately these donation dollars do more for boosting the image of the philanthropist and less for the communities they claim to care about. Talk to the policymakers, ask the non-profits to share their biggest roadblocks, get out into the community and talk to the folks who would benefit from all of these efforts.
#5 Create a strategy
Whether you call it a goal, an outcome, or a solution, it’s important to define the end-result of your efforts. Once you have the end in mind, reverse engineer to create milestones that will be indicators of progress along the way. This reverse engineer process will help inform the strategy you need to take to be an effective philanthropist.
