ForbesLife Executive Woman
Making Less Do More
Jan Alexander, 12.16.09
It's the time of year when every cause in the world comes calling.Charities, hard-hit by a year of recession, need your philanthropic contributions more than ever. But chances are your own assets have barely begun to recover, so it's especially important to give wisely. Just as you've had to readjust your investment portfolio for a changing reality, think of philanthropic giving as another kind of portfolio. Unlike an investment, however, philanthropy is most effective when you strive for focus rather than diversification; instead of spreading your generosity around, settle on one or two causes as your priorities. That way you can get to know more about your recipients and what will help them thrive in tough times.
SAYING YES WHILE SAYING NO
Having a tight focus will force you to say "no²--a particularly tricky word in a season when friends, colleagues and clients are inviting you to charity galas. This time of year even "invite² is a loaded word. But there are occasions when you might agree to buy a table, or at least a seat, because let's face it, charity galas are as much about the well-turned-out attendees networking and fueling their future earning power as they are about raising money for a cause. Some nonprofits have to be a part of your portfolio in the name of friendship, family or professional ties, but you can offer something other than money, such as professional expertise.
"I'm inundated with requests, but I'm being much more selective this year,² says Julie Gilbert, who runs the Minneapolis consulting firm WOLF (Women's Leadership Forum), which she developed as an executive at Best Buy to boost corporate awareness of women as customers. "If it's a cause I'm passionate about I'll buy one table instead of three. If it isn't, but I'm really close to the person asking me, I say no but ask, ŒHow else can I help you?' I try to pull in my network and offer introductions to powerful people who might engage in that cause.²
It has become acceptable--indeed it's a common practice this year--to ask friends to pay for their seats at a charity table instead of inviting them as your guests. When it comes to turning down requests, Susan Fitter Sloane, who runs an etiquette consulting business called Global Matters in Middleburg, Va., suggests planning an "elevator statement.² "I prepare an explanation I could rattle off if someone corners me on an elevator asking me to give to a cause that isn't part of my focus,² she explains. Her current focus is women's heart health. Since the schools that Fitter Sloane's childrenattend don't fall under that rubric, she offered to donate expertise instead of money and wound up providing a tutorial on dining etiquette to students at the College of William and Mary.
If you feel pressed to do something for a gala in lieu of being there, you might donate art or other tangible treasures for the silent auction. You will get a tax deduction for the fair market value of the item rather than the winning bid.
MAKE YOUR MONEY WORK HARDER
A financial pledge is almost as useful to nonprofit recipients as immediate cash. Donors of large sums often spread their gifts over a period of anywhere between three and ten years. For the donor a deferred gift offers a deduction against future tax increases if it's structured so tax deductions are taken in the years of the payout. For the recipient a pledge of, say, $50,000 over a period of ten years means $5,000 less that the charity has to raise each year. The charity can also publicize your pledge to encourage others to give.
Margot Franssen, who founded the Body Shop Canada, sold the business in 2004 and has since devoted her time to philanthropy for women's causes. She is looking into various long-term-giving strategies, including taking out a life insurance policy and making a charity the beneficiary. "I'm not cutting back the money I give, but I'm spreading it out over longer periods,² she says. The life insurance option is a particularly long-term strategy, since the charity does not receive the money until the donor dies, but a simple term insurance policy is inexpensive and can pack a wallop as a pledge.
DO WHAT WOMEN DO WELL--COLLABORATE
"For a long time women have seemed to be more eager to affiliate with other philanthropists than men are,² says Ellen Remmer, president and chief executive of The Philanthropic Initiative (TPI), a nonprofit advisory service for donors. Remmer is also the director of her family's eponymous foundation, which frequently collaborates with other philanthropists to boost the scope of programs for at-risk girls.
Remmer's view is borne out by a recent study by the Forum of Regional Associations of Grantmakers, the Center on Philanthropy and the University of Nebraska. The study, called "The Impact of Giving Together,² examined giving circles--grassroots groups of individuals who make joint decisions about where to give their money. Exact statistics are hard to come by, but the researchers concluded that 500 such circles across the U.S. have given more than $100 million to charities and that giving circles are increasingly popular among women.
Pooled money can go further because donors save on administrative costs, but collaboration can also harness collective ideas; a group can be much stronger at building awareness of a cause and making things happen than one or two individuals.
There are many ways of pooling your resources with other philanthropists.
You can join a giving circle or start your own, teaming up with other philanthropists for a particular project. You can also give money through a community foundation, a group of individual charitable funds. The national Women's Funding Network has information about collaborating on its Web site, www.womensfundingnetwork.org, and the Forum of Regional Associations of Grantmakers offers advice about starting a giving circle at www.givingforum.org.
You might also consider making yourself a business partner of the nonprofits you support. "What we're starting to see more of, partly because of the recession, is philanthropic giving where you use your resources to help a nonprofit develop a sustainable business,² says WOLF's Gilbert.
She developed a business for the White House Project, a nonprofit organization dedicated to training and encouraging women to run for political office. While the project already offered two-day training programs in various cities, Gilbert got the idea to create an online training module that would reach a much wider clientele. Women now pay fees of $20 to $50 for the course, all of which becomes revenue for the organization. "I don't think this would have happened if I hadn't had to think about alternatives to large gifts,² she says. "Otherwise I would have written a check, but a check doesn't always change the game.²
Factoid source: Fidelity Charitable Gift Fund.
Jan Alexander has written for the Wall Street Journal, Newsweek, Money and Institutional Investor.
This article appears in the winter issue of ForbesWoman, a Forbes Media licensee.