How To Build A Meaningful Charitable Process For Your Firm

Fall is here, and that means gala season is just around the corner.

This is the time when many of the wonderful nonprofit organizations in your town are working hard to meet their fundraising goals. They do great work promoting arts, supporting vulnerable communities, and advocating for change, and you want to help them. But this also happens to be your busy season and time is in short supply. Having to make a decision in response to every request can quickly turn what should be a rewarding experience into an overwhelming one.

This is a great opportunity to lean into our strengths as planners and think ahead. Putting in place a charitable giving plan for your firm will help you reduce stress during busy season and feel confident that your firm’s giving is aligned with your goals and priorities.

As with a financial plan, you should start with reviewing your core values (if you are not sure what yours are, here is a handy guide). Action-based values are especially great since they will allow you to quickly see whether a charity’s work is hitting the mark. If you have staff, you should think about involving them in this process, as well. This will not only serve as a team-building opportunity, but it will ensure buy-in and prevent any second-guessing of the way you will use the firm’s funds.

What Speaks To You

The next step is to identify areas of giving that speak most strongly to you. Review your & your employees’ donations from the last few years and look for patterns. Are you inclined to support arts organizations? Do you love helping animal charities? Are there organizations you love so much, you can’t wait to donate every year? Once you have picked your top two or three areas of interest, double check them against your values.

Let’s say that after going through this exercise, you realized that you and your team are passionate about education. But now things may get a little complicated. Should you support a charity that is working to increase state funding for schools? Should you support one that provides free after school programs for local kids? Or should you support one that is researching the best approaches to keeping kids engaged in their schooling? After all, one could argue that these are equally important endeavors when it comes to the promotion of quality education. In fact, there are usually at least five ways to approach any given issue - direct service provision, policy advocacy, community organizing, legal action, and research. Now you may be starting to really see the origin of the choice fatigue you’ve been feeling! Thankfully, there is a helpful quiz that you and your team can take to help identify the approach that is best suited to you. Ultimately, this is the time to lean into your values once more and see which of the approaches matches your philosophy.

This exercise should leave you with a short list of organizations that you are excited about. As with any investment, you will want to perform a bit of due diligence; task someone on your team with looking into each of the nonprofits to check for any red flags. The big ones are lack of representation from the served communities, poor labor practices, and shaky financials.

Execution

Now that you have identified the kind of impact you would like to make, it’s time to talk numbers. Setting a budget is a great way to have both a ceiling and a floor for your giving. Alternatively, you could commit to donating a percentage of your profit (or better yet, revenue) to ensure that your philanthropy grows along with your firm. You may also want to consider adding a time component, along with money, by incentivizing your staff to volunteer for the causes you select. In addition to a budget, you will want to determine a cadence - once a year, quarterly, monthly, etc.  Select whatever works best for your firm’s cash flow and commit to sticking with it. It is also a good idea to set a timeline for revising the plan with your team.

Once you have clarified all of these details, memorialize the plan! Write it down and make sure to share with your team. Even better, post a visual representation of the plan in your office. This is now another way that your firm lives its values. And the ability to refer to your plan to make quick decisions in response to asks is just an extra perk!

  Liliya Jones is the Director of Operations at Modernist Financial, a B Corp RIA based in Portland, Oregon. Follow her on LinkedIn or connect via email at hello@modernistfinancial.com

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