How I Give Away My Money. And Perhaps How You Can Too!
I still insist that we don’t talk enough about money in our community. I mean really talk — publicly, openly, emotionally. Philanthropy (which I’ll define as actively supporting my values with dollars) has become an increasingly important part of my own goals. If you’re in a position to give meaningfully and consistently, maybe my journey will resonate for you. And I should note that what follows represents my POV/approach, some of which is shared by my wife but she also has her own style and I greatly respect that energy.
Four Things To Consider When Donating $10k, $50k, $100k+ Each Year
- Use a Donor Advised Fund (DAF)
A DAF is a financial instrument where you can park cash, stock, and a host of other investments. You take the tax deduction when you put the asset into the DAF, and then give it away over time, letting it appreciate (hopefully) prior to distribution. It’s a really great tool to help manage appreciated private stock and offset large gains while not having to commit the donated wealth to any one particular 501c3 right away. We try to do all nonprofit giving >$1,000 from ours as well as many of our reoccurring donations.
2. Develop a Framework (or Budget)
Be intentional and consistent. Some folks set a budget — max or min they want to give away each year. I’ve never taken to that strategy, instead focusing on a three-bucket framework:
>> Support: The broadest bucket. If I see a great organization or effort, I donate $50–$250. If a friend who has skin in the game is asking me to donate to an effort they’re spearheading, $50–$250. If I read a news article that gets me mad and I can identify an organization working to solve the problem or opposed the assholes, $50-$250.
>> Support and Amplify: Basically the above but I’ll also put a limited amount of social proof against it. Whether that means via social media amplification, contacting a few friends who might also be interested or allowing the organizers to use my support in their own outreach to others (rare, but in some circles it helps to see people you know also donated). I do this for probably 1 in every 20 donations I make.
>> Committed To Your Success: The 3–5 organizations that I try to give to at meaningful levels each year — four to five figures. Besides writing a check, I’m happy to help their development and program efforts as they would like. In some cases I’ve got a relationship with the staff, in others I’m just another donor in the database, but either way, I remain consistent and step up when asked.
3. Max Out Any Employer Matching
Freeeeee money baby! Seriously, if you’re in a position to do so financially, please take advantage of any employer match. Two months left for 2021!
4. Work With Non-Profits/Beneficiaries To Leverage Your Donation
If you’re giving $1k+ and it’s not in response to a specific campaign or outreach, consider reaching out to the organization pre-donation to see if there are any opportunities coming up where your donation would be more strategic. For example, sometimes they’ll tell you about a program that has a corporate sponsor matching your gift. Most of the time they’ll be too busy to respond or just want to lock in your donation ASAP, so don’t make your contribution contingent on a conversation, but it doesn’t hurt to check.
Three Things I Had To “Get Over” To Become A Good Donor
- “Aren’t some problems so complex or large or intractable that giving to a nonprofit is a waste? What difference can they make?”
I’ve found that making small donations to issues such as climate, poverty and so on don’t make me think I’m “solving” the problem in one swoop but I approach them as votes for the people and organizations moving towards a better future. Don’t let the complexity of a problem stop you from taking first steps.
2. “But [charity rating organization] says this nonprofit spends too much on operations and not programs?”
There was a period where charities were initially judged by what percentage of operating budget went to direct programs versus infrastructure (headcount, rent, etc). As a blunt instrument this information was better than nothing but it’s short-sighted because it persists the dynamics which cause nonprofits to underpay staff, unable to invest in technology and other capacity building projects, and so on. So yes I want the places I donate to be ethical, hard-working, thoughtful allocators of my capital, but I don’t want them to be under-resourced and risk-averse.
3. “Seems like there are a few new organizations all doing similar things. Maybe I should wait to see who the best one is and just back them?”
Back them all. Or back one of them. Sometimes they’ll all succeed. Sometimes a subset of them will combine. I supported multiple new Get Out the Vote organizations during the last five year, sometimes with overlapping missions. Never regretted a single donation.
And finally, Two Downsides of Being Philanthropic
- They Sell Their Lists — Especially The Politicians
I wish they wouldn’t list trade, especially the politicians. I’ve given enough to Democratic politicians that my text, emails and voicemails usually contain messages from local, state and national candidates across the US. It’s noise and makes me momentarily annoyed.
2. It Feels Bad To Not Renew A Pledge
Per my buckets above, often I’ll give to an organization on behalf of a person or as part of a specific initiative. Often I won’t give annually to this cause unless my friends continue their involvement. Or every once in a while, I’ll shift one of my “BIG BUCKET” organizations either out of a change in my own priorities or disappointment with a group’s effectiveness. Of course I feel bad telling them I won’t be a donor again, but I’ve found it’s important that your dollars and attention are forward-looking.
If you’re fortunate enough to have gained wealth from the last decade of technology’s bull market and haven’t yet become an active donor/philanthropist please consider doing so. Thanks!