Thinking Philanthropically

Important news! Donors might need to donate more intentionally to causes they support because there has been a revenue decline in most charitable sectors. According to Canada Helps, 57.3% of Canadian charities cannot respond to the current levels of demand and 31.5% of these charitable organizations will raise less money in 2023 than they did in 2022. In fact, the key indicator of giving trends, online giving activity, has dipped below 2019 levels. On average, Canadian community-based non-profits are experiencing revenue declines of 9% compared to 2021 and costs have risen by roughly the same percentage. The conclusion is that the needs in 2024 will be greater and the money to meet the needs will be less plentiful.

“It is very important to know the problems that you want to solve
but it is equally important to identify the precise outcomes
that you wish achieve.”

Donors can make a difference, even if a gift is modest. There is a tendency to think that the word “philanthropist” describes wealthy donors, but we can all think and act philanthropically. Hence the title of this column! So, how should all donors think and act? It begins with an effective philanthropic strategy. The three questions below are important considerations for any donor – regardless of their capacity to give.

  1. What is my charitable philosophy?

This allows a donor to identify their values and their motives. It uncovers the “why” of giving.  This can be driven by past experiences or coloured by proximity to particular causes.  Many donors are unable to clearly articulate a charitable philosophy – but they usually have one.  One of the major philosophical differentiators is when a donor has an abundance versus scarcity approach to giving.  People who embrace an abundance perspective tend to believe that they will never become poor by donating robustly.  Those who have a fear of scarcity will worry about their own financial security when they consider making a donation.

  1. What specific problems concern me and what outcomes am I seeking?

Every donor needs to identify what they deeply care about or risk responding to guilt-laden charitable marketing.  It is far better to identify a limited number of problems that you are passionate about and conduct some research to find credible organizations that are responding to those problems. This is the “who” of giving. Who should you support? You may care about people who are disconnected or hungry, animals that are in need of a home, humanitarian needs overseas, or local women who need to escape violence and abuse (just to suggest a few causes). It is very important to know the problems that you want to solve but it is equally important to identify the precise outcomes that you wish achieve. All of us should take the time to understand how the organizations that we support can make significant and measurable change happen.

  1. What giving process works best for me?

Far too often donors start by evaluating the mechanics of donating before considering the first two questions. Yet the process question is still important because it covers the “how and what”. Some donors decide to give a specific percentage of their annual income. In other cases, gifts may be driven by gains from investments or windfall income. Some donors might decide to give set amounts at specific times of the year. Others may give modestly and provide substantial legacy gifts to organizations they support as a part of their estate planning.

“The needs in 2024 will be greater and the money
to meet the needs will be less plentiful.”

Many generous people are not able to give huge sums of money, but they usually know why they are giving, they understand the causes they support, and they are clear on what they are trying to achieve.  If you are one of these generous people, thanks!

Sam Watts serves as the CEO of Welcome Hall Mission  www.welcomehallmission.com  He serves on several non-profit boards and is an appointed member of the National Housing Council of Canada.  He is the author of Good Work…Done Better www.goodworkdonebetter.com

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