A core motivation that drives philanthropy is the desire to do good – locally, nationally or across the globe – and increasingly Australians are turning their private wealth into community benefit.
We are seeing a growing trend of people establishing family foundations – most commonly private ancillary funds (PAFs) – as a means of structuring this good, and of leaving a legacy and inspiring charitable values in the next generation.
The fundamental, some would argue universal, desire to give can however be stifled by a sense of not knowing how to do it effectively.
Alarmingly, a recent Core Data study on investment behaviour highlighted that 50 per cent of high-net-worth investors do not donate to charity because they believe their money will not be effectively used (rather than because they can’t afford it).
This isn’t just a 21st century challenge. As far back as 360BC, Aristotle wrote:
“To give away money in an easy matter and in any man’s power. But to decide to whom to give it, and how large and when, and for what purpose and how, is neither in every man’s power nor an easy matter.”
With an overwhelming number of needy and worthy organisations in the charitable marketplace, making informed decisions about funding can be challenging. Many philanthropists I speak to find that making a decision to set up a private ancillary or other fund is the simple part. Finding the right nonprofit partner, and the right project for your funding, goes much further than simply the idea of doing good.
How can you be confident that your philanthropy is going to the right cause?
1. GO DEEPER
Having a personal connection to a cause is a positive starting point, but making a good grant goes further than that. Reflecting on and questioning your own biases, motivations, and affinities can reveal new and sometimes better-suited projects for you to connect with.
2. BE DILIGENT
Before making any grant, do your own due diligence on charities of interest.
This means seeking out programs or organisations that:
- Demonstrate a commitment to their core purpose;
- Show a clear understanding of the need they are addressing;
- Have realistic and measurable goals and outcomes;
- Engage in efficient business practices; and
- Can demonstrate their social impact.
3. GET CONNECTED
A healthy dose of gut instinct does come into play. Most philanthropists say that when it comes to making a final decision between shortlisted charities, you have to listen to your heart and not just your head. Having a good ‘feel’ for an organisation, a connection with its leadership, and recognising the ‘x’ factor that simply makes one grant feel right, are important elements in the decision making process.
But feed your gut first! Meet with key people, network with interested parties, and research your cause area until you feel comfortable trusting your instincts.
Rewards of getting it right
Like any other challenge, the rewards of getting philanthropy right include a great sense of personal satisfaction. Many philanthropists talk about the joy of giving as being one of life’s most fulfilling activities.
Winston Churchill once said, “We make a living from what we get, we make a life from what we give”. Others such as David Gonski, Daniel Petre, Paul Wheelton, and Belinda Hutchinson, have all publicly expressed the joy they have experienced from giving.
To see a disadvantaged student graduate from university knowing they were only able to attend because of the scholarship you funded, or to know you were part of a medical breakthrough due to the research you supported – these are just a couple of examples of the personal joy and satisfaction that philanthropy can provide.
Strategic philanthropy – giving that is focused on causes that are unpopular or seen as too difficult to tackle by governments or corporates – can offer an added dimension to this satisfaction.
Philanthropy is a virtuous circle
Getting actively involved in philanthropy can feed your motivation to do good, and many people soon find themselves wanting to do more.
Thinking strategically about philanthropy – pausing to get your good right – will develop your confidence and understanding of the nonprofit sector. You will start to find charities that are well governed, recipients that use their resources efficiently, and projects that have a tangible social impact. And seeing the outcomes of your dollar donated to these causes will do more than good – it will feel right.
Antonia Ruffell is CEO of Australian Philanthropic Services, a nonprofit organisation that inspires and supports philanthropy.
Australian Philanthropic Services establishes and administers private and public ancillary funds and provides grantmaking advice.
For more information see www.australianphilanthropicservices.com.au.