There are many ways to put your charitable dollars to work—from recurring donations to social media fundraising campaigns—but it’s easy to feel overwhelmed. In five simple steps, you can create a comprehensive philanthropic giving strategy that’s both efficient and impactful.
Consider the Wilson family. Alex and Jamie recently retired after selling their successful food distribution company. Prior to the sale, they established a Donor-Advised Fund (DAF) and made a seed gift to help reduce income taxes and facilitate future giving. Grateful for their good fortune, they knew finding purpose through philanthropy would play a big role in the next phase of their lives. But as the dust settled from the sale, they didn't know where to start.
In our previous work with the Wilsons, family legacy and philanthropy emerged as top priorities. So did instilling the values of generosity and altruism in their children. Yet while the Wilsons volunteered frequently as a family, they hadn’t discussed their financial charitable intent with their children. Wasn’t it time to formalize a plan?
Finding Common Cause
A retired teacher, Jamie enjoyed helping children through art and supporting community theater. Through this work, she envisioned creating a resource hub that provides children with education, art, and music classes to help them learn skills and uncover new talents. Alex also cared deeply about the arts, but his top concern was fighting hunger. His company previously hosted food drives where employees and their families packed meals for children in underserved school districts to take home throughout the summer.
After discussing the causes each cared about individually, the couple identified Arts and Culture, Education, and Children’s Hunger as common themes. To incorporate their extended family into the decision-making, they asked each child and grandchild which charities they’d like to nominate for grants each year.
Reflecting on Catalysts
Like many philanthropists, most of the Wilsons’ giving revolved around personal passions. But situations that allowed them to see their generosity in action also inspired them. In discussing past catalysts for giving, they decided family tradition should play a larger role going forward. So, they planned to establish new family traditions around giving back and involve their grandchildren from a young age. Passion, impact, tradition: these felt like potent elements for inspiring a legacy of giving for generations to come.
Selecting Target Locations
Once Jamie and Alex prioritized their principal catalysts and causes, they thought about where they wanted to focus their resources to achieve their desired impact. For Arts and Culture, working in their local community—where they had roots and felt deeply connected—seemed to make the most sense. But when it came to Education and Children’s Hunger, they decided to branch out into state-wide initiatives. To encourage involvement, they left geographic decisions about the “short-list” of other nominees in their children’s hands.
Allocating the Charitable Budget
While all these causes were important to the Wilsons, they weighted their top priorities more heavily. The couple earmarked 45% of future grants for organizations focused on Arts and Culture, 15% for Education, 15% for Children’s Hunger, and reserved 25% to support the causes nominated by family members. To top up the seed gift they made to their Donor-Advised Fund, they vowed to donate appreciated stocks from their portfolio each year to ensure their legacy flourished.
Communicating the Plan
The Wilsons shared their giving strategy with their family while facilitating a conversation around each person’s philanthropic goals. Each Thanksgiving, they plan to host a family meeting to review all charitable gifts for the year, discuss family members’ nominees, and assess their charitable budget to ensure they’re on track. This structure laid the groundwork for the family’s involvement and established a framework for making decisions together. After memorializing and communicating their plan, the Wilsons felt confident that their philanthropic legacy will be fulfilled.
A Five Point Plan for Philanthropy
What can you learn from the Wilsons? A philanthropic plan isn’t just for private foundations and large nonprofits. Families can build a strategy to align their giving with their charitable priorities in five steps:
- Identify the causes that matter most. While each cause can be deeply personal, look for themes that resonate. What other areas might be missing? Discuss your priorities with your partner or other family members to explore differences and shared interests.
- Reflect on the catalysts that inspire your giving. Are you motivated by current events, personal appeals from friends/colleagues, disaster relief, recognition, tax benefits? Use these drivers to help hone your specific giving plan.
- Select target locations. Where do you want to make an impact? The target can range from helping an individual or local community to an entire country or even the world.
- Allocate your charitable budget. Determine your giving capacity and size your charitable budget. Then, rank your top causes and catalysts, assign weights, and allocate charitable dollars accordingly. Will you distribute your gifts equally, or concentrate your giving on your top priority and divvy up the remainder? Keep in mind, these are just targets—you’re not locked in and can still respond to changing needs.
- Communicate your plan. Once you’ve finalized your giving strategy, share it with your loved ones and key beneficiaries. If you choose to involve your family in your philanthropic mission, discuss your individual and shared goals and set expectations for implementing the plan. Consider how you will measure your impact and articulate the changes you wish to see.
A Living Document
Set aside time each year to review your plan and evaluate your progress. Where was your giving greater or less than anticipated? You may realize that a larger portion of your giving was focused on a specific area—such as global hunger—and that you want to lean into that cause more heavily. On the other hand, you might notice that appeals from friends and coworkers overshadowed your impact in the areas that matter most. Having a strategy in place will help refocus your giving on your highest priority causes and catalysts.
- Morgan Campbell
- Associate Director—Wealth Strategies Group