Social Investment: Charitable Giving & Getting by Danielle Bedasse
Updated: May 2, 2020
For most individuals, any charitable donation or investment is a very personal decision to make a positive impact on current social, health, environmental or other issues, for the public good. Here are a few thoughts on helping donors find the right cause, gift and recipient for their charitable dollars.
The Heart of the Matter What issues matter to you: Pandas or Poverty? I was reading an article that appeared in the Washington Post earlier this spring; the author was outraged that a private donor had made a $5 M gift to preserve the panda population, thus, virtually “ignoring” the plight of so many people around the world living in abject poverty. Personally, I probably would not have chosen Pandas, but that is my point. Philanthropy is really a private initiative for public good, and each and every “giver” has the inalienable right to invest in the causes or issues that matter to him or her. The first and most crucial step in determining how and where to give is making a decision about the cause or social issues that most move you, no matter what the reason.
How & where do you want to have an impact?
While the first step may seem “emotional”, don’t take that to mean that you should set aside your valuable business intuition and acumen when evaluating how to invest your charitable dollars. One of the dichotomies of the not-for-profit or social sector is that there is a multitude of ways to get involved in approaching the problem at hand. Will you choose to fund research? Or direct programming? Will you give to large charities with substantial endowments? Or take more of a “risk” with a smaller, grass-roots, but extremely effective, local charity? Will you invest in advocacy? What about the cost to cover administration? Or will you direct your funds to equipment and capital? Whatever you choose, educating yourself on the options will make the gift more satisfying and help you better understand how your dollars are working for the cause.
What level of involvement or recognition do you expect?
This may on the surface appear to be the “selfish” part of this exercise, but it is extremely relevant in determining what, where and how to best make your charitable investment. What do you want out of this transaction or relationship? Are you happy to write a cheque and simply receive a charitable tax receipt? Or do you want to be involved, to receive regular updates on your project, to volunteer with the organization or serve on the board of the charity? Do you want public recognition – your name on the side of the west wing or be named as the program “founder” – or would you prefer complete anonymity? Take the time to answer these questions honestly for yourself; there is no right or wrong, good or bad answer here. It is crucial for donors to outline and articulate their expectations both for themselves, and to the not-for-profit they have chosen to support.
Doing your Due Diligence
This is the “analyst” part of the equation. Among the 83,000 registered charities and 81,000 non-profit organizations that file annual tax and information returns in Canada, be assured, not all are the same. While this may be a controversial statement, the administration, fundraising and program delivery are all very important parts of a functioning charity. Funding one and negating the others can be detrimental to the cause. What a charitable organization does, how it goes about fulfilling its mission, how it is governed and managed, how it measures its outcomes and impact, and how it fund raises and accounts for its finances are all very important questions to ask when doing your due diligence prior to giving a major gift. It is important to understand the mechanics of the charity, and how your funds will go to work for the cause.
Navigating the “Watchdogs” There is no “SEC” for the charitable sector, however, in recent years, some organizations have endeavored to set standards for the sector and/or help donors evaluate charitable organizations for investment purposes (see below for an abbreviated list). These can be valuable bodies of information, but I recommend using them with caution – not everything is as straightforward and simple to evaluate as it may look on paper. For instance, while the watchdogs have addressed the fundraising/administration ratio of expenses to programming, often times the crucial issue that is missed is the IMPACT of the organization toward its mission. Some things will always be cheaper than others – running a food bank will rarely cost as much administratively as running a shelter for homeless teens. It doesn’t mean that one charitable endeavor or operation is better than the other. Trust that your gift, whatever the amount, is important. Use this information, along with the answers to your questions above, and most of all, your best judgment, to go ahead and make a difference in our world.
This article has been written by Danielle Bedasse, the Executive Director of Jays Care Foundation, the charitable arm of the Toronto Blue Jays baseball club. Danielle oversees the charitable granting and investment of more than $1.4 M annually in programs and projects serving children and youth across Canada. For more information about Jays Care please visit: www.bluejays.com/jayscare.
Sources for researching charities and their impact:
CRA Charities Dictorate: http://www.cra-arc.gc.ca/chrts-gvng/menu-eng.html
Imagine Canada: www.imaginecanada.ca and www.charityfocus.ca
www.givewell.org or www.charitynavigator.com in the US
In all of your research, make a point to speak with the Executive Director or Board Member of the charity you are planning to support – they can give you the most up-to-date and often crucial information about their organization.