Smart charitable giving starts with your values

by Heather Larkin ([email protected]) 205 views 

Editor’s note: Heather Larkin, J.D., is president and CEO of the Arkansas Community Foundation. Opinions, commentary and other essays posted in this space are wholly the view of the author(s). They may not represent the opinion of the owners of Talk Business & Politics.

You’ve probably got a lot of things filling your plate this holiday season. But what feeds your spirit?

From a purely practical standpoint, December is an ideal time to give to the charities you support in order to claim a charitable deduction on your 2015 taxes.

But your personal giving shouldn’t be merely one of a thousand other to-do’s on your year-end checklist; if you’re fortunate enough to have the resources to give, you’ve got a special opportunity to celebrate the causes that inspire you and bring joy to those around you.

At Arkansas Community Foundation, we partner with thousands of Arkansans to help them achieve their charitable goals. Though their lives and backgrounds are different, these donors share one thing in common: the desire to use their resources as effectively as possible to do good in their communities.

From my experience working with these donors, I’ve observed that effective charitable giving always begins with your personal values. Here are a few ways to get started:

Talk to your family about the causes you care about. The holiday season is the perfect time to teach your children and grandchildren about giving back. When you gather together around the family table, make time to share the stories that have shaped your values. Consider setting aside a portion of your giving budget to donate to a few charities selected by the family as a whole. Together, you can begin to build a legacy of giving that will span generations.

Find (and stick to) your focus. Your options for charitable giving are limitless. It’s tempting to say yes to every good cause, especially when compelling appeals arrive in your mailbox (or inbox) every day. Yet, you can have a more sustained impact when you focus your time, interest and financial resources on a need that is most significant to you. Consider dividing your charitable giving budget into two pools: leave one part uncommitted so you can respond to small requests as they arise, but reserve the other portion for organizations serving your core passion. In this way you can commit a larger portion of your giving to the organizations that mean the most to you, while leaving the door open to other needs, as well.

Do your homework. Over the past few decades, donors have become increasingly savvy about vetting the charities they support, and for good reason. Nonprofits should be held accountable for their financial stewardship, and donors should have a clear understanding of how their favorite charities operate. One of the most common metrics donors use to evaluate a nonprofit’s financial management is its operating expense ratio; that is, how much of the money a nonprofit raises goes to serve its primary mission, and how much is used to fund general operations (such as staff salaries, facilities and maintenance, etc.)

But I would argue that an operating ratio doesn’t paint the full picture; you’ve got to ask the right questions. Who is on the board of directors? Is the mission relevant? Does the organization’s approach seem feasible (that is, does it seem possible that the work the organization does on a day-to-day basis will have a meaningful impact on its mission)? Can the organization demonstrate a track record of success? It’s these questions that will help you determine if a given charity is doing work that is consistent with your values and worthy of your support.

The holiday season reminds us of all of the things that matter most to us – family, home, community, faith. How will you express your values through your year-end giving?