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Philanthropy that Makes an Impact

How to ensure your dollars to do work this giving season

Back Web Only Nov 12, 2015 By Barry Brundage

If you really want to make a difference, it is not a matter of how much money you give, but how well you give it. Many donors want to make a large impact, yet surprisingly, those who want to truly make a difference may want to focus on a smaller scale. Here are three suggestions for donors who are interested in making a direct impact:

Education

It is often said that children are the future. That’s why education is an ideal focus for philanthropists. With the right educational footing, children can be better prepared for success throughout their lives.

There are a number of options for philanthropy at various levels of giving within the education field. Here are a few to consider:

  • Donate to a private primary or secondary school: Often small private schools are run on a shoestring budget. Donations can make a big difference to them.
  • Fund a scholarship: This is a great way to make a real difference for disadvantaged kids, whether it is at the primary, secondary or college level. It can be life-changing to receive an education they would not otherwise be able to access.
  • Endow a professorship: You can help a college or university bring talented professors on board to increase the school’s expertise in an existing subject area, or to branch out into a specialty area that they have not had the funds for in the past.
  • Starting a school: Founding a school in a developing country can make a large difference to the local population. The strength of the U.S. dollar in emerging markets may also enable your money to go much further than you might expect.

Microlending

Microlending is a unique way to support nontraditional borrowers, such as women and minority business owners in developing nations. It typically helps those who don’t qualify for traditional loans due to their size, scope or the constraints of the local infrastructure. When done correctly, it can support innovation and job growth — especially when the capital is combined with practical business training.

Microlending can help the recipients get their business on track by giving them access to capital they would not have otherwise. In addition, donors may have the opportunity to share their own business expertise in addition to their funds. For those who find the process too complicated, there are also established international organizations that are experienced in microlending

Venture Philanthropy

If you would like to make an impact closer to home, you could consider making a grant to local nonprofits using the technique known as venture philanthropy. Borrowing from venture capital strategy, it focuses on strategic growth and measureable results.

Grants can be a good way to work with small, local nonprofits. They can allow you to target your money toward a very specific purpose — such as building a homeless shelter or purchasing new equipment for a sports league. To expand your impact even further, you can consider challenge grants. Incentivize the organization to raise funds by offering a 1-for-1 or 2-for-1 match to encourage others to add their support.

Outsource

For those who have more money than time, there is another alternative. Though you might prefer a direct gift, you may not have the time to research several nonprofit organizations in your chosen gifting area to ensure that your funds create the impact you desire. In this case, there are organizations that can oversee your donations — for a small percentage of the gift. These specialized groups have insight into which local nonprofits excel in various areas of interest. They also typically track statistics to demonstrate how past monies have made an impact in your community.  

As we approach the busiest giving season of the year, donors should be thinking of how to make the most of their money. Finding a high-impact opportunity may take some research, but the returns can make it all worthwhile. Whether a scholarship, a grant to a local charity or helping a young entrepreneur get their start, when done well (and in consultation with a financial and tax advisor experienced in this area), you can make a real difference in the lives of others.

U.S. Bank and its representatives do not provide tax or legal advice. Each individual’s tax and financial situation is unique. Individuals should consult their tax and/or legal advisor for advice and information concerning their particular situation.

This information represents the opinion of U.S. Bank and is not intended to be a forecast of future events or a guarantee of future results. This information is not intended to serve as a recommendation or solicitation for the purchase or sale of any particular product or service. It does not constitute advice and is issued without regard to any particular objective or the financial situation of any particular individual.

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