Creating a Purposeful and Purpose-filled Philanthropy Practice | Part 3 of 3
Some donors feel that their giving is transactional, not transformational. It’s important to understand that some level of transactional philanthropy will always exist. We live and work in communities that we want to see thrive, and we are often asked to support organizations that help us to maintain healthier, flourishing societies. Community nonprofits certainly need your transactional donations.
At the same time, we can also seek transformational donor experiences by selecting a few organizations that are aligned with our key focus areas, in an effort to go “deeper” and generate meaningful impact.
Here are some of the factors that donors may consider in determining their preferences for impactful engagement:
- Geography: Are you a donor who gives to organizations located in proximity to you? Or is the nonprofit mission more important than the specific location that is being served?
- Going Wide vs. Going Deep: Some donors favor the “Peanut Butter” giving method, spreading their philanthropy far and wide (like peanut butter on a sandwich). Others believe in going deep, selecting just a few partners to support, sometimes in more significant amounts.
- Time Horizon for Change: How patient are you and your family with respect to outcomes? For some donors, immediate impact is desired. Donating healthy snacks to a childcare center, giving blood, and buying theater tickets for under-resourced students would be examples of immediate impact. Other donors with a longer time horizon may want to help build new classrooms; co-create a new program that allows a well-performing organization to extend their reach; or fund professional development for nonprofit leaders. Some donors take an even longer-term view, and fund advocacy organizations, hoping to create policy outcomes that could sustain generational change.
- “General Operating Support” (GOS) is a type of grantmaking that allows nonprofit Executive Directors and their teams to use dollars for necessary expenditures. Nonprofit leaders often tell us that this kind of flexibility is truly the most beneficial, as unrestricted funds allow the team to focus on what they do best: delivering goods and services to their clients in need.
- Evaluations: Consider how (and whether) you want to be apprised of the ways in which your donation has created impact. Outcomes reporting can be built into program delivery. If this is important to you, consider working with the nonprofit to create measurable evaluation metrics that are beneficial, not burdensome, and tell the impact story with nuance and specificity.
These are just a few of the ways that your philanthropic acts can be customized to fit your interests, needs and vision.
Reach out to your Moneta advisor and our Chief Philanthropy Officer to help guide you on a purposeful and purpose-filled journey.
Transactional philanthropy refers to everyday charitable giving, like donating to your local public radio station, a cancer charity walk, or your child’s school fundraiser. These gifts are valuable and help communities thrive. Transformational philanthropy goes deeper, involving a more intentional partnership with a nonprofit where your time, talent, treasure, testimony, and ties are uniquely situated to help that organization succeed in ways that are meaningful to both you and them. Both have an important place in a well-rounded giving strategy.
Peanut butter philanthropy refers to spreading your charitable giving thin across many organizations, much like spreading peanut butter across a sandwich. While it may feel like your dollars aren’t making a big enough difference, this type of transactional giving is genuinely valuable. Nonprofits rely on these donations to keep their communities thriving. The goal isn’t to choose between peanut butter philanthropy and deeper giving, but to find a balance that works for you and your family.
General Operating Support, or GOS, refers to unrestricted charitable donations that nonprofit leaders can use for any necessary expenditure, from staff salaries to utility bills to overhead costs. Unlike restricted gifts that are designated for a specific program or purpose, GOS gives nonprofit leaders the flexibility to make good decisions and focus on what they do best: delivering goods and services to the people they serve. Despite being one of the most needed forms of support, it is also one of the hardest for nonprofits to secure.
Measuring philanthropic impact starts with an open conversation with your nonprofit partner before any gift is made. Most established nonprofits already have evaluation processes built into their program delivery, so the key is understanding what outcomes reporting already exists and how you can align your expectations with it. The goal is to identify measurable metrics that tell the impact story with nuance and specificity without creating additional burdens for the nonprofit team.
For many donors, geography plays a significant role in their giving decisions. Some feel deeply connected to the region where they grew up, built their careers, or where their family has roots, and proximity drives their philanthropic choices. Others are more mission focused and location agnostic, choosing to fund organizations doing important work regardless of where they are located. Neither approach is more right than the other. What matters most is understanding what drives your giving decisions and building a strategy that reflects your values and your vision for impact.
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