I am sharing my column with a guest, Charlie Bresler, Ph.D. Charlie is currently Executive Director of the nonprofit, The Life You Can Save. He spent seven years as a graduate professor of psychology followed by a career in business during which he became President of The Men’s Wearhouse.
I would wager that you have never thought of yourself as a “philanthropist.” But according to Laura Arrillage-Andreseen, a well-respected Silicon Valley billionaire, Stanford professor, and philanthropist, “a philanthropist is anyone who gives anything -- time, money, experience, skills, and networks -- in any amount to create a better world.” Like you, I never thought of myself as a philanthropist and it is still very hard for me to think about myself that way since I am not that wealthy nor am I at all famous. But I have learned you don’t have to be Bill Gates or Warren Buffett to be a philanthropist.
In 2008, I decided to resign my position as President of The Men’s Wearhouse and attempt to use my time, skills, and money to make a positive impact on others beyond my nuclear family and the employees at The Men’s Wearhouse. Prior to that decision, my wife and I had given money to nonprofits in a typically reactive, not very well thought out way. Evidence suggests that our behavior was like that of most people: we weren’t very generous relative to what we could afford to give and we did virtually no research on the impact of our donations.
But I was lucky enough to encounter Peter Singer’s book, The Life You Can Save, which really woke me up. I kind of knew I was selfish and overly focused on myself and my family, but I had never considered changing my behavior much. I am not suggesting I had some kind of religious conversion and that I went from being self-centered to being magnanimous or an ascetic. But my wife and I did make some significant changes like donating significantly more to help the most effective NGO’s, while significantly reducing our discretionary spending —like eating out and housing costs—while still retaining a comfortable lifestyle and being generous with our children.
Hopefully, I can share some of our insights about giving more effectively and generously in a way that could be helpful as you approach this “giving season.” Think about the amazing opportunity you have to not only change lives, but to change MANY lives, by putting just a little thought into how to best share a little of your literal and figurative “good fortune” with those who are not nearly so fortunate.
Be Intentional: Think Carefully About What You Want to Accomplish with Your charitable donations.
- What are your core values? This simple exercise may help you identify those.
- Do your past donations reflect those values?
- If not, what drove your previous donations? Is your giving based on what others expect of you? Or on which organizations send you the most solicitations, nicest calendar, or address labels? Do you give to a charity that fights illnesses family members have suffered from? Your alma mater? Are your donations going to large, well-known nonprofits that may not be the most impactful, but are top of mind?
- Are you willing to challenge your charitable reflexes?
Be Informed: Get facts, and use them to guide your giving.
Until recently, people had little access to information about which charities make the most difference. In recent years, the real impact of charities worldwide is being investigated and reported more accurately and transparently. This has shown us that: 1) Not all interventions contribute positively; 2) Some interventions make a huge contribution, often at very little cost.
- 85% say they care about nonprofit performance, but only 35% do research on any gift (Hope Consulting)
- For Domestic Giving, explore The Center for High Impact Philanthropy’s website.
- Approximately 95% of the $265 Billion that individuals donate in the U.S. goes to domestic charities. But consider “getting the most bang for your buck” by donating to highly effective (Non-Governmental Organizations) NGO’s working in the developing world, where a dollar goes dramatically further. For example, visit The Life You Can Save's website. We recommend carefully screened organizations that reduce suffering and premature death in the developing world for extraordinarily little money relative to the impact.
- Focusing Philanthropy recommends both domestic and international nonprofits that are carefully investigated by the founder and his staff.
Be Impactful. Make a real difference with your gift.
- How many people are helped by this gift? At The Life You Save, we’ve created an Impact Calculator to answer just that question.
- What would have happened if I hadn’t made my gift? Some nonprofits need your money more than others (e.g. they are excellent, but fewer people know about them), thus the marginal utility of your donation is much greater. Consider investigating smaller nonprofits in the cause area that you think is both impactful and meaningful to you.
- Here is a link to a great discussion and TED talk that may change how you think about charitable overhead.
- A Harvard Business School study found that giving money to someone else lifted participants' happiness more than spending it on themselves (despite participants' prediction that spending on themselves would make them happier).
- Think about how this applies to yourself.
Make it a Habit.
- Giving isn’t just for the holiday season. Think about how you want to incorporate giving into your life and your legacy.
- For your legacy, make clear designations as you do your estate planning and leave specific instructions behind, like in a legacy planning system like Future File.
I don’t generally like bumper stickers, but this one really is relevant for all of us -- live simply so others can simply live. Let’s all try to remember that this giving season.
Carol Roth is a national media personality, "recovering" investment banker, dealmaker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation.
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