ST. CROIX INSIGHTS
Stop Donating to Non-Profits
BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC
Stop donating to Non-Profits. I know, how can I make such a bold request with all the good work non-profits are doing in our community and world. But hear me out so you can make even a bigger impact on your resources then what most people are doing today.
I have a host of clients who are very philanthropic and their checkbooks demonstrate it by donating to non-profits. And one of the parts of my role as their financial advisor is to help them fulfill their goals by helping causes they are passionate about. It’s so cool when we discuss how they want to impact the world and how to best achieve that.
Yet one of the biggest mistakes I see individuals make it they give money to every organization that contacts them. They feel compelled to give, but what real impact is a donation of $15 or $25 to 10, 20 or 30 organizations a year. I’d argue that it’s probably not all that much impact or the impact you’d really like to have. One of my clients, “Julie,” had many conversations around this subject. If you were a non-profit and just contacted her to discuss your organization she’d probably give you donation. But what impact is that really having?
Just to be clear about giving to non-profits, I just finished the book called “The Promise of a Pencil,” – a great read. It talks about how one person with an idea and $25 started on a mission to open 500 schools in improvised countries. Not only did he do it, he’s still going. What I’m outlining isn’t saying don’t give or work on making impacts. I’m just saying let’s be more purposeful. The author, Adam Braun, said that “…in Western culture we are taught that those of us with ample resources and money should share our prosperity with those who have less. I’d thought of charity as a simple transaction, a one-way street…When we give handouts to those in poverty, we do them a disservice. We create a cruel cycle of dependence.” Adam may have started with $25 but he went all in.
Over the years we developed a gifting philosophy for “Julie.” Who and what did she feel passionate about and where did she truly want to impact while living or even after her death. We now have clarity and she stopped giving to every charity so we could become even more impactful. But we had one more step which wasn’t going to be easy.
Going forward “Julie” would only donate if her donations were matched. Now it’s typical she’ll give her favorite organizations $5,000 or $10,000 at a time, multiple times throughout the year. She has six favorite charities she’s doing this for! But the catch is her donation needs to have matching funds to create a bigger impact. Now that’s cool.
Having been on non-profit boards and helping organizations raise money, I can tell you they are able to find other organizations and individuals to match donations. It’s an additional way to encourage new and more money. If you can turn one dollar into two, why wouldn’t you do it? So why not do it when it comes to your planned giving? Everyone wins.
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