Reconsider your end-of-year disbursements
by Meg Crosby
With December comes the giving season; and for nonprofits it is typically the most profitable month of the year as donors rush to take advantage of tax deductions. As you sit down to make your year-end giving decisions, I offer a few things to consider.
Invest for Impact
More than likely, you will be asked for a donation this holiday season. It may be by a Salvation Army volunteer ringing a bell over a red kettle outside Kroger, a co-worker urging your participation in a United Way campaign, or a friend hosting a party for you to learn more about a specific cause. If you are like me, you respond to all of these methods because someone you know asks you to give. The vast majority of giving is relationship based. The problem with that is that it often results in a scattershot approach to philanthropy versus a strategic one.
Peter Frumkin, director of the Nonprofit Leadership Program, writes, “Although the amount of money given away every year continues to rise, there are lingering doubts about what billions of dollars backed by good intentions have ultimately produced.”
We need to give with more than good intentions — we need to put our investment to work so that it has the greatest possible chance to provide a return in the form of moving the needle on some of the serious challenges our community faces. According to Crutchfield, Kania & Kramer’s Do More Than Give, “Donors who do pick a strategic focus are able to achieve more than donors who scatter their funding and attention across many disparate causes.”
Do Your Homework
Once you’ve settled on a cause, it will be important to find the best way to support progress in that area. A pair of websites launched by the Community Foundation of Greater Memphis, and supported by many other local foundations, aim to help educate Memphians on our community and connect them with nonprofits working in their particular areas of interest or geographies.
WhereWeLiveMidSouth.org is an online dashboard that aggregates public data on many of the city’s vital statistics from population and income to green space and transportation.
WhereToGiveMidSouth.org is a nonprofit directory with a wealth of information on each nonprofit, including its mission, financial information, program descriptions, and a listing of key staff and board members.
I would also recommend taking a look at an organization’s annual tax filing, the IRS Form 990. Most 990s are accessible online and have information on sources of revenue, list of key donors, and salaries of key employees.
You may ask, “What should I be looking for?” In my humble opinion, the answers are sustainability and impact. What is the business model? Are there other sources of revenue beyond individual donations? Is the organization supported by a broad group of donors or a small group? Are the salaries for leadership reasonable? Is there an endowment to provide a financial safety net in the case of a crisis? How is impact measured and are results trending positively? Does the organization actively collaborate with other nonprofits for greatest impact?
Do More Than Give
When you find something that is worth your money, it is also worth your time and your mind. From Do More Than Give: “Donors have something valuable to contribute beyond their money. The clout, connections, business know-how, and political savvy that foundation leaders, business executives, and many individual donors possess are key resources in advancing causes — resources that nonprofits often lack.”
I have seen volunteers do amazing things from lobbying for political action, arranging complex real estate deals, facilitating strategic planning sessions, and creating logos and websites, to coaching staff members and providing lunch for the weary staff. All of these tasks add much needed capacity and skills to nonprofits. What might you be willing to roll up your sleeves and do to further your cause and increase the return on your investment?
Memphis is one of the most generous cities in the country. Think what we can accomplish if we not only give with heart, but we also give smart.
(Editor’s note: Meg Crosby is the board chair for the Community Foundation of Greater Memphis.)
Meg Crosby is a principal with PeopleCap Advisors.
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