Passion and Strategy
Can you believe we are in mid February-
Today I will discuss strategy
I truly believe that philanthropy done strategically can accomplish great things. There are many ways that one can execute their philanthropic strategy the two most common ways are by utilizing
Donor Advised Funds
Starting a private/family Foundation that will live out the donor’s mission.
If a donor chooses to begin their own private Foundation one of the first decisions they must make is whether they want the foundation to exist in perpetuity or not. Does the donor want the organization to sunset after a certain time period or after the Foundation’s funds have been distributed.
Both of these methods have their strengths and weaknesses.
Donor Advised Funds are a great way for donors who have many interests and are not yet ready to pour their assets into one initiative to begin their philanthropic journey.
Donors are able to contribute to an organization’s and mission as they wish throughout their lifetime. There are many ways to channel Donor Advised Funds – Some options include using Investment firms or other banking firms. Another option would be using a Community Foundation /Community Fund. Donor advised funds began in the 1930’s and have seen great growth in the late 2000’s, even today they remain an extremely popular vehicle for private donors. .
A second option includes
Starting a Private or Family Foundation- A private Foundation is an organization that is created using the donors funds to support initiative(s) the founder(s) are passionate about. Funds donated through a private Foundation can be acknowledged publicly or privately/anonymously. A private Foundation allows a donor to be strategic and innovative in how a donor chooses to impact the initiative it wants to effect. After one chooses to begin a Foundation along with selecting it’s board of directors/trustees should be whether or not they want to the organization to continue in perpetuity or have a date to sunset or close it’s doors.
If an organization chooses to continue in perpetuity one of the first things the foundation should think about is succession.
Will the organization’s successors be able to live out the organization’s mission with the same pass as the original Founder’s.
Who will have the same passion as them to continue out their mission.
Passion is the one trait that a donor brings to a their philanthropic initiative that is invaluable.
If an organization chooses to sunset then the organization should have a plan on how they plan to close their doors to grantees- do they simply close up shop or is there a plan to sunset and if yes, when do they plan on sunsetting.
I will be writing more about both of these vehicles in future posts. One thing to keep in mind is when a donor chooses to support an initiative is PASSION and PASSION is the one thing that money cannot buy.