In this edition of our series on “The Philanthropic Journey,” we are discussing structures and vehicles that can be used as we embark on our giving and philanthropic journey as well as why we should intentionally measure our philanthropic initiative against its impact.
Sustainable (structured) Giving
The ultimate goal in a philanthropic initiative should be to create a long-term, financially sustainable giving program.
When considering a planned and long-term approach to your giving, there are a couple of things to keep in mind, some of which are;
- It is simpler and achievable than you might think – A structured giving program can be established with as little as you can afford, meaning you don’t have to be as rich as Dangote or Elon Musk before you can leave a meaningful philanthropic legacy.
- There are many ways to give – the aim is to create a structured program that works for you. You might wish to set up a scholarship or award, give through your trust or estate in your lifetime, participate in philanthropy individually, or involve your family and friends.
When choosing a structure for your giving, many factors come into play. These include your motivation for giving, the assets you wish to invest, any constraint that may change your ability to give in the future, and the level of involvement you hope to have in your giving.
Various ways to Structure your Giving
- Local Community NGOs (Non-Governmental Organizations)
These are independent philanthropic organizations that enable local donors to contribute cash, trusts, bequests, or property as well as to create permanent endowments that benefit a geographic area, a social need, or a community group.
- Establishing an endowment within an existing Public Foundation or charitable organization
In the event, you want to provide a sustainable community-focused gift, but don’t fancy a high level of involvement, setting up an endowment within a larger charitable trust (a public foundation) is one to structure your giving.
- Family foundation
A family foundation is one way to create a framework for giving that can enable you and your family to establish a philanthropic legacy. We find that most families tend to bond better around philanthropic initiatives as the sense and fulfillment of contributing in meaningful ways to societal development and wellbeing often is a rallying point for collaboration and teamwork within wealthy families.
- Donor Advised Funds
Your giving can be centered around using returns from your investment holdings and contributing the same as part of a pool of funds that are managed independently. The funds are available for your direction and instruction to be utilized for any philanthropic initiative or project that is aligned with your wishes and preference.
- Charitable Trusts
Charitable trusts are established through a bequest in a Will (Last Testament) of the Testator.
Measuring your Philanthropic Impact
It is often said that what gets measured gets managed. One of the most significant changes to emerge from today’s philanthropists is the recognition of the need to measure and demonstrate impact. This is the area where the discipline of corporate life is being transferred into the philanthropic endeavor.
However, when thinking about measuring impact, the often-rigid measures that underpinned corporate life do not easily fit with philanthropic activities. Hence fluid measurement metrics that combine short-term goals with longer-term aims may be well utilized.
Aside from assigning metrics to measure your giving, there are known instances where just a visit to communities that are impacted, hearing stories about the lives changed by your giving, or commissioning a project site are extremely rewarding in themselves. Other measures include collation and formal recording of feedback, storytelling, and voices of individuals who have benefited from your philanthropic activity.
On the other hand, a charitable organisation should also measure the impact of their work to understand how well they are addressing the needs of the people they are trying to help, improve their activities based on evidence, make the best use of resources, communicate the impact of their work to stakeholders, and share knowledge with other funders and charities about lessons learned.
Philanthropy channeled through business-led foundations, NGOs, and charitable organisations working with the government typically adopt more structured approaches to measuring philanthropic activities than maybe family foundations. However, measuring the return on investment and the return on effort will continue to evolve and change as philanthropists have even greater access to data from the projects and causes they support.
By moving from direct giving to structured and sustainable giving, you can provide more consistent and meaningful support to the causes, community, and charitable initiatives you care about. Structured and sustainable giving offers greater personal satisfaction by deepening your connection to the causes you value. In addition, adopting a structured approach allows you to integrate your giving and philanthropy into your overall wealth management and estate planning strategy.
In conclusion, your philanthropic desire or initiative should be well structured and properly measured to ensure that it aligns with your values and remains sustainable. Our Advisors at Fiduciary Services are positioned to provide you with the guidance, support, and resources you need in your philanthropic journey. Reach out to us via email@example.com
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