The Science Of Smart Giving
BusinessWeek, 12/11/06
Squeezing the most good from large-scale donations takes serious planning. Here are five success stories.
How do you give away $10 million? You could start adding zeros to whatever checks you are writing to charitable institutions and worthy causes. But if you’re going to hand over an eight-figure sum, you’ll want more than a thank-you letter and a receipt to show the tax man. Such amounts “raise a question that isn’t just material but emotional: How much impact am I going to have?” says Paul Schervish, director of Boston College’s Center on Wealth & Philanthropy.
The tricky question for philanthropists is this: In an era of Buffett-sized billion-dollar gifts, when the number of donations that topped a million dollars has more than quadrupled to 2,197 last year from just 423 in 1985, how do you sift through the multitude of good causes to find the place where your contribution can really make a difference?
The key to success is focus, according to Rockefeller Philanthropy Advisor’s Melissa Berman, who works with families to develop their philanthropic strategies. She urges families to start not with a particular charity, but with a conversation about values. Does it matter more, say, to support medical research or to embrace the arts? Once you’ve chosen a cause, search out the underdog. If, for example, everyone is giving to the American Diabetes Assn., you might want to consider supporting a diabetes group that hasn’t received much funding. Then, work with advisers you trust–be they philanthropic consulting firms, wealth managers, or friends and colleagues who have experience in philanthropy–to find the best method to put your funds to use. Giving strategies are as diverse as the causes that vie for philanthropic support. Here are five examples of how families and individuals have put their wealth to work.