Smart Giving: What’s Your Plan?
If you financially support nonprofit organizations in Northwest Arkansas and beyond, thank you for helping provide the critical services and economic value those entities bring to our region. The quality of life offered throughout our communities would not be possible without the generous contributions of donors like you.
As we enter into the most charitable season of the year, many donors take the time to create or review their personal Giving Plan. Ask yourself: Are your gifts being maximized for the greatest possible impact? Are the causes you support sustainable? How much of your money stays in Northwest Arkansas? Are you seeing the best return, in terms of community impact, for your charitable investment?
If you can’t answer these questions, consider creating a Giving Plan. Most of us could stand to be more organized with our giving, and often, it’s the lack of planning and forethought that prevents would-be donors from supporting worthy causes. Knowledge (and planning) is power - and giving with intention can be very rewarding.
Here are 5 steps to help create your personal Giving Plan:
1. Decide your annual giving budget.
Deciding your annual giving budget (or range) ahead of time is the first step toward organizing your giving. Just like budgeting for living expenses or vacations, taking the time to think through how much you intend to give to charitable causes takes the guess work out of giving when the time comes, and empowers you to make decisions you feel good about. During this process, you should consider any tax planning needs you may have for the upcoming year.
2. Pick your causes (and consolidate your giving).
Consolidating your support to fewer organizations (rather than spreading smaller gifts to many) can help your gifts go further for the causes you care most about. Giving $100 each to two organizations, for example, as opposed to $25 each to eight organizations, consolidates the impact of your personal giving budget. Of course, you don’t have to give the same amount to each cause and the larger your giving budget, the more organizations you can support with impact.
It’s important to consider your personal goals as well. Do you want more of your money to be used locally, or nationally and globally? Which causes need your support the most? Do you want to retain a membership to some organizations (usually smaller gifts) or would you like to become a major donor (usually $500-$1,000 starting level) of others? Major gifts, particularly to local organizations, can yield added benefits such as recognition and perks in the community that may be important to you, your family, or your business. Decide how you want to distribute your giving budget so that you are ready to make informed decisions when asked.
3. Decide the timing, frequency, and duration of your support.
All gifts are helpful to a nonprofit - and so is predictability! Reliable, regular donors are crucial to nonprofit organizations because they allow them to budget with more certainty. Deciding to support your top causes at least annually over a period of years provides clarity for you, and it helps the nonprofit build a reliable base of donors so critical to their long-term stability and success. Also consider giving monthly. Many organizations offer a monthly giving option, allowing you to spread your giving throughout the year while providing sustainable monthly income to the nonprofit.
What if you want to make a large, “one-time” gift? Large gifts help nonprofit organizations finish key projects, build critical operating reserves, or make important investments in capital improvements or equipment they would not otherwise be able to complete. These gifts propel the mission of an organization in a major way. If you are considering a large gift, decide if you can also remain an annual donor on some level, engaged in supporting the ongoing needs of the organization. Either way, your gift will be greatly appreciated.
4. Don’t restrict your gifts.
As a nonprofit director, I can assure you that fundraising to cover core operating expenses (the people, facility and equipment needed to do the work) is a huge energy sink and an ongoing concern for most organizations. When gifts are restricted by the donor to a specific program or item, however, the organization must honor those restrictions even if the funding could be better spent in other ways. If you’ve carefully selected the nonprofits you are supporting, you should be able to trust them to use your money in the best way they see fit.
That said, of course, there is a time and place for restricted gifts, and sometimes the nonprofit, especially of larger donors, will ask you to support a specific campaign, program or need. Or perhaps you have a strong connection to a particular aspect of their work and simply prefer to support that component. Talk to them and see what they most need, and where your gift can best meet both goals.
5. Leverage your gift.
Maybe you work for a company that offers an employee charitable gift matching program? Or perhaps an employee volunteer program that allows you to give financially while encouraging your coworkers or company to do the same and volunteering as a team to support the cause? Does the nonprofit promote an annual drive where your gift might be matched by other supporters? Talking to the leadership of the nonprofit is a good place to start in exploring these options. Sometimes your $100 donation can turn into a much larger impact for the organization. You can also offer your gift as the match for other donors, encouraging new or continued donations toward the cause.
How do you select a nonprofit to support?
Selecting where and how you’ll direct your charitable giving starts by deciding what you and your family care most about. Nonprofits serve many roles in the community, from providing housing and meals to the homeless, to providing safe spaces for children, to infusing art and culture into the community, and protecting our natural environment. Follow your passion and consider any political or religious causes that may be important to you in the upcoming year as well.
Once you know what general causes you want to “zero in on” for the next few years, research the organizations that best provide those services. Are they local, or will your funds be used elsewhere? How long have they been in existence? What are the financial management practices of the organization? What are their long-term goals and strategies? Do those strategies create lasting change?
Don’t be afraid to call them up, ask questions, and get to know the staff and leadership of the organization. You can also review their most recent IRS 990 tax form and their Annual Report (if they publish one) to learn more about their governance practices, financial management and impact.
There are many nonprofit organizations doing good work in Northwest Arkansas. Whatever causes you choose to support, we thank you, because - DONORS MATTER!