Leave a Legacy – Tips for Emerging Philanthropists
by Mashum Mollah Investing 15 October 2024
You’ve been more fortunate than most, and you’re ready to share some of your good fortune with the wider world.
There’s just one problem. You’re not sure where to start. You don’t have any philanthropic role models in your life, for starters.
That’s okay. The world is full of generous people who’ve thought intentionally about how, where, and — maybe more importantly of all — why to leave a legacy for future generations. Their actions offer a valuable road map for emerging donors.
If you could ask them directly, they’d tell you to do these five things soon.
Learn From Others
If you are new to philanthropy, you don’t have to reinvent anything; everything is already laid out, and all you have to do is learn from others.
To learn about the ways of philanthropy, you have to read similar books, blogs, and articles, listen to podcasts, and follow the latest philanthropy trends.
If you wanna be a part of active learning in matters of philanthropy, then you can join forums, communities, and online groups.
Create a Long-Term Financial Plan to Determine How Much You’ll Need for Yourself
You can’t give away money you don’t have. And you certainly don’t want to give away more money than you can afford to while you’re still on this earth.
To avoid these outcomes, create a long-term financial plan before you begin planning your philanthropic endeavors.
You can work with a certified financial planner or, if you’re confident in your own skills, calculate how much you’ll need to live on based on your expected income, assets, spending, market returns, and life expectancy. Consider, too, how much you’d like to leave to your direct heirs.
Research Organizations That Align With Your Values and Goals
Once you know how much you can afford to give away, begin researching organizations that line up well with your personal values and philanthropic goals.
To start, you can use publicly available information on the organizations’ websites and through resources like Charity Navigator, which rates nonprofits on key quality metrics.
As you proceed, you may need to do more in-depth research, including conversations with your financial advisor and the charities. You must feel confident that your funds will be spent wisely and aligned with your values before writing a check.
Decide How You Want to Manage Your Charitable Funds
If you have a considerable amount of funds to disburse, you may want to set up a special-purpose vehicle to do so efficiently and with minimal tax impact.
One option is a donor-advised fund, a pool of individual donors’ contributions managed by a registered nonprofit organization. You can join an existing donor-advised fund or set one up yourself.
Connect With Donor Contacts at the Charities You Support
Before making any substantial gifts, it’s a good idea to make contact with donor liaisons at each charity you may wish to support.
Having in-depth conversations with these individuals confirms that your values and mission really are aligned with the organization’s. It may provide additional reassurance that our money will be well looked after.
They also offer an opportunity to make a more detailed giving plan, such as endowing a scholarship or purpose-built fund or staggering contributions over a period of years.
Experiment and Iterate
A great way to start your philanthropic journey and tips for new philanthropists is to try and learn new things and gain valuable life experience from them.
You can easily experiment with different and new tools, approaches, methods, and even partners in your philanthropic journey.
Through these experimentations, you can test out your assumptions, hypotheses, and unique strategies around a controlled trial or group.
From these outcomes, you can collect conclusive data, evidence, and feedback to support your hypothesis.
Consider Leaving a Legacy Gift
You need not give everything away during your life. A charitable bequest, or a set aside in your will to an organization you support, is an excellent way to efficiently and proactively engage in philanthropy without too much hands-on work.
A charitable bequest can also fund longer-term or larger projects than your annual charitable contributions, creating helpful synergies with your day-to-day philanthropy.
Is Philanthropy Changing?
The ways of philanthropy are apparently changing towards diversification, growth in attitude, and a more humble approach toward inclusivity. Five distinct ways have been identified regarding the changing nature of philanthropy and tips for new philanthropists.
- Philanthropy is shifting from focusing on capital to actually focusing on competence.
- The motivation to work in philanthropy also shifts from a passion for working alone to a mix of both passion and pragmatism.
- The relationship between impact leaders also shifts from peer coordination to total collaboration.
- The approach towards problem-solving has changed from staging interventions to pursuing innovations.
- Within an organization, the scope of work has shifted from quick temporary fixes to long-term involvement.
How to Encourage the Newer Generation of Philanthropists?
- Share your philanthropy story
- Be a hands-on guide
- Create meaningful roles
- Talk and listen
- Share your philanthropic knowledge
- Get them in the game
Wrapping Up!
It’s a deceptively simple aspiration, leaving the world better than you found it. It’s a pity so few of us take it to heart.
By thinking now about how you’ll leave a legacy tomorrow, you can chart a different course. And while you’ll hopefully enjoy many long, happy years ahead, there’s no harm in asking difficult questions now. After all, none of us knows what the future may hold.
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