Establishing a solid framework

The key to ensuring a return on a donor's charitable investment is to establish both a framework and an exit plan from the outset. This way, resources can be assigned for maximum efficiency and impact, increasing the prospect that a donor will achieve his or her goals.

Donors should remain in close communication with their charity partners to build a relationship of trust and encourage expectations to be met, or even exceeded. It is important to retain a level of critical oversight, however the donor should take care not to put in place onerous administrative procedures that could be overly taxing on the charity partner. It is always a delicate balancing act to manage reporting and control mechanisms with fostering the trust needed to develop a fruitful relationship.

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Good governance

Impact measurement is an essential part of good governance and may form part of a wider effort to strengthen trust in the charity sector. The key aim of philanthropy is to be good at doing good, but measuring outcomes is not always a straightforward task.

Understanding impact is vital for donors to assess performance and to decide what charitable projects or activities to undertake in future. Impact measurements also show how philanthropic organisations are driving change, demonstrating value to stakeholders, enhancing accountability and providing valuable information for future decision-making.

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Continual process of improvement

As with any business or investment project, philanthropic work evolves over time. It is an on-going process of reflection, refinement and improvement to ensure consistency and continuous advancement. The evaluation process can be outlined in the steps below:

Consider whether the project meets the agreed objectives. Ask whether there are any obstacles that could prevent the charity partner from achieving the objectives the donor intended.

Reflect fully on the successes and any shortcomings. Assess whether the charity's strategy is working, determine whether the social impact aligns with the intended change, and evaluate how this could be achieved more effectively.

Recognise that each step on the philanthropy journey informs the next. A donor may seek help externally and compare notes with other philanthropists to get a critical and independent view of each philanthropic initiative. Careful analysis and meticulous planning will ensure a sustainable and measurable impact in the next charitable endeavour.

At Lombard Odier, as a seventh-generation family business, we understand the needs of our clients. For more than 200 years we have helped them in their quest to nurture and pass on their assets and legacies to future generations. Today many high-net-worth individuals are rethinking philanthropy. As they bring new, unparalleled ambition, we work together with them to build a new paradigm in effective philanthropy, to structure and maximise the catalytic effect of philanthropy for the greater good.