Giving with Purpose: Tips for Effective Philanthropy

Posted on March 1, 2019

Courtesy of:  Robin Hamilton, Financial Advisor
Branch Name: Morgan Stanley Naples
Phone Number: 239-449-7863
Web Address: http://fa.morganstanley.com/themosaicgroup

Giving with Purpose: Tips for Effective Philanthropy

Historically, charitable giving rises about one-third as fast as the stock market.1 In 2017, Americans gave over $410 billion to charity, with the majority of charitable dollars going to religion, education and human services.2 Among high net worth households, approximately 91% give to charity.3

Engaging in philanthropy—as an individual or as a family—can be one of the most meaningful and transformational aspects of your life. The benefits of charitable giving extend far beyond the dollars you donate or the financial benefits you may receive, such as tax savings or cash flow from charitable gift vehicles that provide distributions. When charitable giving is tied to issues—values and causes that are collectively important to you and your loved ones—it becomes more than a gesture or a transaction. It enables children, parents, and grandparents to join together and work toward addressing or alleviating real problems in your local community or in the world at large. In this way giving becomes a family affair or even a family tradition, that is passed from one generation to the next.

Getting Started with Effective Philanthropy

Every dollar you put into the world has an impact, but how do you ensure that your charitable giving aligns with both your values and the change you hope to see in the world? Here is a quick roadmap for practicing strategic giving and maximizing your impact.

Step 1. Find your philanthropic passion. The first step in your giving journey involves finding your philanthropic passion. Start the process of purposeful philanthropy by considering what matters to you and what you hope to accomplish. Ask yourself the following questions:

  • What fields of interest would we like our philanthropy to address?
  • What criteria will we use to identify which organizations to support?
  • How important is having control over how our gift(s) are used?
  • How will we measure our impact?

Creating individual or family mission and vision statements around philanthropy help ensure that your giving is guided by a consistent set of values and goals. Once you’ve established your guidelines for giving, you will want to identify causes, issues, and organizations that you would like to support. Charity-ranking organizations such as Charity Navigator or BBB Wise Giving Alliance can be useful for assessing a nonprofit organization’s financial health, operational transparency, and accountability in reporting on progress.

Step 2. Choose ways to give. There are many ways to give back, whether you choose to give money directly to a charity, create financial vehicles to facilitate giving or donate your time to volunteering for a nonprofit organization. Each of these ways has their advantages and disadvantages, and your Financial Advisor can help you determine which method(s) of charitable giving will allow you to practice purposeful philanthropy while still pursuing your other financial goals.

Step 3. Practice strategic giving. You want your giving to count, and you want to know that your charitable dollars are making a meaningful difference. To maximize your impact, you may want to consider pooling your giving with that of other like-minded individuals and families who support the same cause. Or, you can choose to tie your gifts to specific programs or initiatives so you can track the effectiveness of your philanthropic dollars. It is also a good idea to stay engaged with the nonprofit organizations you support by requesting impact reports or even communicating with their leadership to understand their progress.

Taking the Leap to Investing with Impact

Your philanthropic potential is not limited to the gifts you give to causes and organizations that are important to you. The way you choose to invest your wealth can also help you achieve meaningful philanthropic outcomes. Impact investing—also known as investing for the three P’s of people, planet and profit—involves seeking environmental, social and governance benefits alongside a financial return. If you are interested in learning more about how you can align your investment portfolio with your purpose, talk to a Financial Advisor with experience in impact investing.

Footnotes 

1 The Foundation Center.

2 Giving USA  2018.

The 2016 U.S. Trust Study of High Net Worth Philanthropy conducted in partnership with the Indiana University Lilly School of Philanthropy.

Disclosures

Article by Morgan Stanley and provided courtesy of Morgan Stanley Financial Advisor.

Robin Hamilton is a Financial Advisor in Naples at Morgan Stanley Smith Barney LLC (“Morgan Stanley”). She can be reached by email at robin.hamilton@morganstanley.com or by telephone at 239-449-7863..  Her website is http://fa.morganstanley.com/themosaicgroup.

This article has been prepared for informational purposes only. The information and data in the article has been obtained from sources outside of Morgan Stanley. Morgan Stanley makes no representations or guarantees as to the accuracy or completeness of the information or data from sources outside of Morgan Stanley. It does not provide individually tailored investment advice and has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this article may not be suitable for all investors. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.

Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning, charitable giving, philanthropic planning and other legal matters.

The returns on a portfolio consisting primarily of Environmental, Social and Governance (“ESG”) aware investments may be lower or higher than a portfolio that is more diversified or where decisions are based solely on investment considerations. Because ESG criteria exclude some investments, investors may not be able to take advantage of the same opportunities or market trends as investors that do not use such criteria.

Robin Hamilton may only transact business, follow-up with individualized responses, or render personalized investment advice for compensation, in states where she is registered or excluded or exempted from registration, http://fa.morganstanley.com/themosaicgroup  or FINRA Broker Check http://brokercheck.finra.org/Search/Search.aspx].

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