You may have heard that Mark Zuckerberg recently donated 99% of his Facebook shares, valued at US$45 billion during his lifetime, to advance human potential and promote equality for all children in the next generation. He made the announcement in a letter to his newborn daughter.
Amazing, right? Many have commented that the example he and his wife are setting today is an inspiration to the world. But what if you’re not a billionaire like Mark Zuckerberg? Can you still be a philanthropist?
Getting serious about philanthropy is like embarking on a journey. It’s exciting to explore your beliefs and aspirations, learn from experts and practitioners, and experiment with different types of charities and organizations. However, the journey can quickly become overwhelming; the world’s social and environmental needs are so great that it can be hard to know where to start.
Like any good planning tool, there are certain questions you should consider in your philanthropy strategy. I recommend that emerging philanthropists consider working through these questions with their financial advisor and their families, where appropriate, as a way to create not only a strategic framework but a roadmap on how to operate their giving plan.
1. Why are you giving?
People have many motivations for giving and these often change over time. Identifying your motivations makes it easy to clearly include them in giving strategies. Some of these might be:
• heritage – ethnic or national identity creates a set of important values as well as a catalyst to support and honour that heritage
• family – honouring our ancestors can be among the strongest of motivators
• faith – many donors focus their giving around spiritual beliefs or religious practice
• legacy – those motivated by legacy seek to influence the future, and philanthropy is their public commitment to make a better world
• experience – inspiration comes from an individual’s own life
2. What do you want to achieve?
Donors make the most sustained and successful contributions when they focus on issues that connect directly to their motivations and convictions. This can be achieved using a three-step process:
• Frame the issues – different perspectives on the world help us focus on what we see
• Narrow your focus – once you have identified the areas of concentration for your philanthropy, you will probably have to narrow your focus on more specific issues
• Define the outcome you seek – thoughtful philanthropy means not only having a clear focus on the challenge you want to tackle, but also having a clear vision of what change you want to see
3. How do you wish to involve others in your philanthropy?
Reflect on who you want to include in your philanthropy, and to what extent, as well as how they will affect your goals. Plan what will happen with your charitable assets when you pass, and ensure your philanthropic intentions are honoured.
4. Which giving tool is best?
Choosing a giving or donation tool to help with your philanthropic strategy can be difficult. Focus your decision-making process on what best supports your preferences and giving goals with an assessment of the following:
• tax efficiency
• distribution to charity
• legacy options
• recognition versus anonymity
When you donate to charity, you are not simply giving money; you are aligning yourself with that charity’s mission and values. Choose organizations that fit your overall strategic giving plans, both in how you identify with the cause and their practicality.
You don’t need a billion dollars or team of specialists to implement a meaningful philanthropic plan. It all starts with an idea and a conversation. I can help.
Emerita Mercado, CFP, TEP specializes in trust and estate planning issues. She helps clients protect their assets by setting up family holding companies, private foundations and family trusts as a means of intergenerational wealth transfers. Emerita also collaborates with families and executives to create dynamic total wealth management solutions.
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