In 2019, U.S. giving to charity totaled nearly $450 billion. Historically, nearly one-third of that amount takes place in December, with 12% of all giving occurring in the last three days of the year.
December and last-minute giving is often rushed, not well planned nor strategic. In order to maximize the impact of your giving, whether personal or in your business, start planning your approach to year-end donations now. There are a number of steps you can take to ensure your donations have a lasting and significant impact.
1. Engage your family members in conversations about what issues and causes are most important to them. Especially in this year of a pandemic, climate change impact, voting rights challenges, racial justice efforts, income and health disparities, and economic uncertainty (for nonprofits, too), meaningful conversations between and among generations about how a family wants to make the greatest impact are essential.
2. Giving through your business? Engage your stakeholders, especially your employees, about not only what issues and causes matter most to them, but how to more effectively involve them in volunteering and giving programs. If your company already has a matching gift program, or sponsors paid volunteer opportunities, take steps to make sure your employees are utilizing them. Unfortunately, the median employee participation rate for matching gift programs is only 9%, leaving an estimated $6 billion to $10 billion of unclaimed matching funds each year! Company volunteer programs also tend to have relatively low participation.
3. Look through two lenses, by asking two critical questions in either a business or family setting:
What difference do we want to make in our communities?
What difference do we want to make for our family or business?
Both questions are important in creating an effective strategy to achieve both internal and external goals through philanthropy. Donors who neglect one or both of these questions miss the opportunity not only to "make a difference," but also to fully engage family members or business stakeholders in meaningful communication about values, goals, priorities and lessons learned.
4. Go deep, not wide, by focusing on a smaller number of carefully selected key issues, causes or organizations. Many donors adopt the "peanut butter" approach to giving — spreading their charity thinly across a wide variety of nonprofits. Donors and nonprofit organizations alike benefit when giving is focused more narrowly, moving philanthropy from merely transactional to actually transformational.
5. Give to smaller, local organizations. 2020 has been the most challenging year for nonprofit organizations in memory. Increased demands for services and decreased revenue, combined with remote workplaces and other COVID-19 restrictions, have put many on the brink of survival. It is estimated that up to one-third of nonprofits — mostly smaller and local — will not survive the pandemic and recession double whammy. Unlike bigger organizations, such as universities and hospitals, very few local or smaller nonprofits have sizable endowments to help them weather the current storms.
6. Do your research to find those organizations that are having an impact where it matters most to you. Don't only rely on friends' recommendations, glossy mailings or fancy websites to decide which nonprofits are making the difference you want to make. Reading impact reports, examining nonprofits' publicly available 990 tax returns, speaking with staff and board members, and volunteering are ways to dig deeper, learn more and find better partners to achieve your philanthropic goals.
7. Give boldly and take risks with your giving. Many donors can afford to donate more than they already give, and this year, the need to "dig deep" is critical. And, because it seeks to solve seemingly intractable problems, philanthropy can be seen as the ultimate "risk capital." Taking calculated risks with grant making may be the only way to find new solutions to old problems.
8. Ask for help from financial, tax, legal and philanthropic advisers to guide your decisionmaking, learn "best practices" and maximize both the joy and impact of your charitable efforts.
2020 has been extremely challenging for most Americans, and it's not over yet. We know, however, that philanthropy is inherently optimistic — especially in divisive and disheartening times — by expressing the belief that we can have a positive impact on our own lives, on the lives of others and on vital societal issues. It also serves as a line of defense to protect core democratic values like equality, opportunity, fairness, inclusiveness and freedom of speech and thought. The issues and needs in our communities are great — don't wait until December to get started.
Bruce DeBoskey is a philanthropic strategist working across the United States with the DeBoskey Group to help families, businesses, foundations and family offices design and implement thoughtful philanthropic strategies and actionable plans. Visit deboskeygroup.com or @BDeBo.
