As we swing into a new year, you may be tempted to assume that the time for charitable giving is behind us. But really, what organization wouldn’t welcome your donation any day of the year? Let’s break with tradition, and get a leg up on your 2016 philanthropic activities.
When It Comes to Giving, You’re Not Alone
As the London-based Charities Aid Foundation (CAF) describes it, “The impulse to give, to help others if you can, is a natural human instinct.” It’s easy for that “data point” to get buried in the barrage of breaking news we read to the contrary. But if we adopt a long-term, evidence-based perspective on charitable giving, we can find much more room for optimism. For example, consider these global observations:
Myanmar, one of the world’s poorest nations, is also THE most generous. In its annual World Giving Index, CAF assesses “generosity” on three levels: helping strangers, donating money to a charity, and donating time to an organization. Based on its most recent data, CAF found that Myanmar ranked highest in donating both time and money, with a whopping 92 percent of those surveyed allocating a portion of their hard-earned money to charity.
Some of the world’s wealthiest families have been dedicating the majority of their wealth to philanthropy. Most recently, Mark Zuckerberg and his wife Priscilla Chan made headline news by informing their newborn daughter that they were going to pledge 99% of their Facebook shares to a giving mission, to make the world a better place for her. GivingPledge.org has been quietly accumulating a collection of similar pledges for years from ultra-wealthy families, both famous and unknown.
Most of the rest of us appear to be doing our bit as well. According to a June 2015 Giving USA press release: “Americans gave an estimated $358.38 billion to charity in 2014, surpassing the peak last seen before the Great Recession.” This figure represented the highest level of giving measured in the organization’s 60 years of reporting on it, with more than 70 percent of the donations coming straight from individual donors. Here’s to us regular folk!
Good Evidence for Great Giving
Effective giving can leave donor and recipient alike feeling better off. As Warren Buffett described in his philanthropic pledge: “Were we to use more than 1% of my claim checks (Berkshire Hathaway stock certificates) on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others.”
But we want to emphasize the word, effective. As we presented in this post, “Worst-Spent Charitable Intent,” there are some real stinkers out there. According to this Tampa Bay watchdog report, some charities have been known to spend less than 1 percent of their budget on direct cash aid. Heaven only knows where the rest of the money goes, but clearly you don’t want your generosity to be wasted on bloated bureaucracy, or worse.
Contrast these figures to GiveDirectly.org, where an average 91 percent of every dollar is being put directly into the hands of impoverished people in Kenya and Uganda. The organization then uses a portion of its remaining funds to follow up with its recipients, assess the effectiveness of its program, and report its findings clearly and effectively to donors.
Efficient, Effective … Accountable
Efficient, effective and accountable is the name of the game. For giving, just as for investing, it’s essential to heed the evidence, lest your best intentions and ingrained assumptions run afoul with the real-life outcomes of your generosity.
As usual, empirical analysis is the only way to separate philanthropic fact from fiction. One excellent resource we’d recommend on that front is William MacAskill’s book, “Doing Good Better,” and the affiliated website www.EffectiveAltruism.org. Based on his research as a graduate student at the University of Oxford, MacAskill observed that, “the best charities are hundreds of times more effective at improving lives than merely ‘good’ charities.” In short, if you’re going to give, you may as well give to the best.
Last but not least, if you are charitably inclined, you might as well cut yourself a tax break while you’re at it. One option to consider on that front is to make use of Donor Advised Funds, as we’ve described in past posts.
Have we sparked your interest in pursuing more intentional giving in 2016? As always, we would welcome the opportunity to hold a Cogent Conversation® with you about your evidence-based philanthropic intent, this year, and in the years ahead.