Take strategic approach to philanthropic endeavors
Research is key step upon deciding focus of givingOctober 26th, 2017
Giving back not only feels good, but it can also be good business. Many companies and business leaders see charitable giving as a benchmark of success when they have the resources to give back to the community.
Natural disasters and tragedies have been headlining news sources daily, pulling at heartstrings and bank accounts. According to Giving USA, donations from individuals totaled $281.82 billion and made up 72 percent of the charitable donations pie in 2016. Corporate giving increased by 3.5 percent to $18.5 billion and made up 5 percent of all charitable giving in 2016.
Like most expenses, charitable giving is wisest and most efficient when it is well thought out and intentional. There are various factors to consider when developing personal and business plans that give back to the community.
From a business perspective, it can be a coordinated strategic effort fueled by company morale, a leadership personal focus, or customer interests. Corporate giving can happen in many forms, such as cash donations, in-kind support, and goods or services.
You are ready to give. Where do you start?
Pick your passion: Crafting a giving plan starts with questions. What is the catalyst for giving? As a business owner, are you looking for a charity that aligns with your company’s mission and vision? Are you looking to support the charities that are important to your employees or customers? As an individual or family, reflect on the source of passion and visualize a goal for making a difference.
Assess resources: Give the same thought to giving as you would any expense. How much time, energy, and resources do you have to give back without disrupting your business or household’s sustainability and security for growth? When is the best time to give? Does it need to be during a specific time of your fiscal year? Just like any business plan, look forward to one, three, and five years and set benchmarks for dollars, volunteer hours, and in-kind services donated.
Weigh the benefits: Giving back isn’t a one-way street. There are benefits personally and professionally with positive morale, brand reputation, referrals, and tax deductions. Consider those components when developing your plan for helping the community. Be humble, authentic, and creative in your charitable partnerships. Writing a check doesn’t have to be the highlight of your giving. Developing relationships with charity recipients, board leadership, and community organizers can tell a story that illuminates the passion from which it was born. Organizations are interested in long-term partnerships that go beyond the tangibility of money.
Do the research: Your areas of focus are clear. Your resources are accounted for, and the benefits are listed. Now what? It’s time to research the charities that will benefit from your success and planning. Giving tends to start from the heart and will end up there when it comes full circle. It’s important to perform due diligence when choosing a charity to ensure your money and resources are being used efficiently and ethically. Better Business Bureau Wise Giving Alliance urges corporate and individual donors to consider these tips:
•Take the time to check out a charity to avoid wasting your generosity by donating to a questionable or poorly managed effort. The first request for a donation may not be the best choice. Be proactive and find trusted charities that are assisting. Visit Give.org to verify if a charity meets the BBB Standards for Charitable Accountability.
•Keep in mind not all crowdfunding sites do a thorough job of vetting individuals who decide to post for assistance after a tragedy or a disaster, and it’s often difficult for donors to verify the trustworthiness of crowdfunding requests for support. When donating to a crowdfunding campaign, it’s best to make the donation to someone you know personally. Also, understand the fee structure, refund policy, and tax implications of giving to a crowdfunding campaign.
•About 80 percent of states require charities to register with a state government agency—usually a division of the state Attorney General’s office—before they solicit for charitable gifts. If the charity is not registered, that may be a significant red flag.
•Watch out for vague appeals that don’t identify the intended use of funds. For example, how will the donations help victims’ families? Also, unless told otherwise, donors will assume that funds collected quickly in the wake of a tragedy will be spent just as quickly. See if the appeal identifies when the collected funds will be used
•Families may decide to set up their own assistance funds. Be mindful that such funds may not be set up as charities. Also, if collected money is received and administered by a third party such as a bank, CPA, or lawyer, it will help provide oversight and ensure the collected funds are used appropriately, such as paying for funeral costs, counseling, and other tragedy-related needs.
•Never click on links to charities on unfamiliar websites or in text messages or email. These may take you to a look-alike website where you will be asked to provide personal financial information, or may download harmful malware onto your computer. Don’t assume that charity recommendations on social media have already been vetted.
•After funds are raised for a tragedy, it is even more important for organizations to provide an accounting of how funds were spent. Transparent organizations will post this information on their websites so that anyone can find out without having to wait until the audited financial statements are available in the future.
This is a personal giving choice, but an established charity will more likely have the experience to address the circumstances quickly and have a track record that can be evaluated. A newly-formed organization may be well-meaning, but will be difficult to check out and may not be well managed.
Not all organizations collecting funds are tax exempt as charities under section 501(c)(3) of the Internal Revenue Code. Donors can support those other entities, but keep this in mind if they want to take a deduction for federal income tax purposes. Also, contributions that are donor restricted to help a specific individual or family aren’t deductible as charitable donations, even if the recipient organization is a charity.
BBB Wise Giving Alliance is a standards-based charity evaluator that seeks to verify the trustworthiness of nationally-soliciting charities by completing rigorous evaluations based on 20 holistic standards that address charity governance, effectiveness reporting, finances, fund raising, appeal accuracy, and other issues. Learn more about the 20 BBB Charity Standards and local charity reviews at Give.org.
For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2016, people turned to BBB more than 167 million times for business reviews on more than 5.2 million businesses and charity reports on 11,000 nonprofits, all available for free at BBB.org.
Kirstin Davis is the Spokane-based marketplace director for the Better Business Bureau Serving the Northwest.