corporate
The Giving Chronicles: 3 key principles to effective philanthropy – making it happen!
Effective philanthropy is charitable giving that has impact, where resources are allocated effectively and efficiently to produce the greatest positive influence. For donors, the process of selecting charitable partners and philanthropic projects is often a satisfying one. The challenge is how should those partners or projects be chosen? How can donors reconcile the spontaneous desire to give with the need for a carefully structured approach to giving?
To quote Aristotle: “To give away money is an easy matter and in any man's power. But to decide to whom to give it, and how large and when, and for what purpose and how, is neither in every man's power nor an easy matter."
Giving effectively is as important a challenge as giving to what is worthwhile, and requires having a solid strategy in place to find partners who can best fulfil the donors' goals. Lee Wong, our Head of Family Services for Asia, outlines 3 key good giving principles that can guide donors towards the right projects and partners on their philanthropy journey:
The Giving Chronicles : Making It Happen
1) Assessing objective factors
Choosing the right partner involves evaluating and assessing objective factors. These include the organisation's structure, the track record of the foundation or charity, any future initiatives, the management of its financial and human resources, transparency and accountability. Subjective elements that may help in this assessment include the beneficiary's sense of confidence, understanding, resourcefulness, openness and pragmatism.
Choosing the right partner involves evaluating and assessing objective factors
Useful sources of information for this evaluation include the organisation's website and annual reports, its mission, strategy and theory of change. You can then weigh the concrete impact of their work, the credibility of the management team, and look beyond marketing and image to question whether they are on track to achieve their objectives.
Donors may be tempted to give based purely on the recipient organisation's administrative costs, but this is to be discouraged, as administrative costs depend on many factors, and will vary according to location and scale of impact. For example, the cost of delivery of masks and hand sanitizers to Cambodia may not be the same as the cost of supporting a home for the elderly in Singapore.
Read more about 8 factors that influence philanthropic giving in Asia
2) Defining a specific project and period of engagement
Charities and foundations may often prefer generic support and being given a free rein, but it would be wise to define a specific project jointly with the chosen partner. This way the beneficiary and donor can better establish a relationship, and the donor can get to know their partners and measure the impact of their support.
It takes time to build a relationship and to bring about change, and this gives an opportunity to build a relationship based on trust and information sharing
A practical period of engagement – while there are no hard and fast rules – is between 3 to 5 years. It takes time to build a relationship and to bring about change, and this gives an opportunity to build a relationship based on trust and information sharing. The risks, of course, include recipient dependency, especially if the annual donations exceed 25 percent of the partner's operating budget.
Find out about the importance of open communication in planning for family succession
3) Open communication and flexibility
It is important to keep the lines of communication open and to be prepared to be flexible should a project face unexpected changes. Hence it is useful to agree on an exit strategy with the partner at the outset to help mitigate some of these risks. The partner can then plan accordingly based on the timeline, knowing when the support is coming to an end, and the donor will be able to move on knowing that a significant and lasting impact has been made.
