August 20, 2008 | Read Time: 1 minute
More donors today consider their charitable gifts to be “investments.” What are the implications of this new mindset for charities?
Sean Stannard-Stockton, a financial adviser to wealthy donors, describes a few of the implications on his blog Tactical Philanthropy. Among his observations on why it matters that donors are seeing giving as investing, rather than spending:
- Donors may start thinking about philanthropy as a percentage of their assets, rather than of their income. This could translate into a big jump in giving among wealthy donors, many of whom have assets that are far larger than their incomes.
- Donors take a longer-term approach. They are “‘investing’ in the continued success” of a charity, rather than “‘buying’ the right to feel” as though they’ve helped someone.
- Corporate donors see “corporate social responsibility” as an investment in a community where they derive profits, rather than a cost they seek to minimize.
- Charities begin viewing donors not as “customers” who they must “separate from their cash,” but as investors and stakeholders in the organization.
- Wealth managers start advising the philanthropy of their clients, as they realize that giving is not “a cost that should be minimized” but an “asset-allocation question that is directly intertwined with their clients’ broader wealth-management needs.”
What do you think?
