Strategic philanthropy: What it is and why you should practice it

We are in the midst of the holiday season – the “giving” season – during a pandemic and economic crisis. Many donor organizations have become financially hard-pressed, necessitating that they curtail or narrow their charitable giving. At the same time, many recipient organizations – nonprofits which address educational, health, hunger, human development, housing and other social problems – face enormous new demands for their programs and services.

With these simultaneous problems of greater needs and diminishing resources, there is no more urgent time than the present for funders to reassess the what, why and how of their activities.

If your organization is not already practicing strategic philanthropy, now is the time to begin doing so.

What is strategic philanthropy? It is the practice of aligning an organization’s charitable giving with its broader mission, values and goals. It also ensures that the social good of an organization’s donations to worthy causes is matched with a corresponding benefit for the donor.

Some might find that notion cynical. We’re conditioned to think that donations of money, goods or volunteerism should constitute an altruistic act. But, as much as we like to idealize it, to some extent most charitable giving is transactional in nature.

The two common mistakes that most donor organizations make are:

1. Not being honest about their full motivation for giving and hiding behind that vague, overused phrase of “giving back to the community”; and

2. Not being focused on how doing good for the community should maximize benefits for itself.

Look at it this way: Your company, professional association, labor union, tribal government, or trade association will best be able to serve the community and your members/employees while continuing to perform acts of charity if it survives and thrives. Being deliberate about the benefits you hope to reap from those same charitable acts simply advances your organization’s staying power to perform its mission and contribute to society. When the economy is on such shaky ground as it is now, this makes especially good sense.

Strategic philanthropy can help organizations accomplish a variety of goals, including:

• Establishing (or rehabilitating) an external reputation or brand

• Bolstering the organization’s culture or internal reputation

• Asserting a leadership position on an issue or within a community

• Strengthening relationships with existing stakeholders (employees, members, customers, guests, vendors, neighbors, etc.)

• Building new relationships

• Galvanizing other donors to join in support of a cause

None of these goals is ethically compromised or compromising in and of itself. And all of them can benefit the public at the same time they benefit the organization pursuing them.

When you donate your money, goods or services, you will amplify its strategic value for yourself (and often your recipients) by an accompanying exercise of moral leadership. This can take several forms:

• Organizing your giving thematically, even packaging it as a campaign focused on a single problem and thereby bringing greater public awareness to it.

• Being a thought partner: Not just giving away some of your money, goods or time, but also your and your employees’ expertise and best thinking.

• Using the power of convening: Lending your reputation and prestige to recruit and partner with other groups to bring more resources or attention to a problem you want to be known as helping to solve or ameliorate.

Too often, organizations let vague goals drive their charitable giving. While it may cover a lot of bases, their scattershot approach to donations will diffuse their ability to make a real difference in the community and do little to advance their own strategic imperatives. Applying the principles of strategic philanthropy will help you avoid these pitfalls, better integrate your charitable activities with your core mission or business, and let you derive the maximum benefit of your good deeds.

Helping others is one of the most characteristic impulses defining our humanity. At this time when the world is so unpredictable and nothing can be taken for granted in the business and professional world, strategic philanthropy offers a way to realize the adage, “you do well by doing good.”

We’d be delighted to hear from you and help develop or fine-tune your organization’s strategic philanthropy plan.