You might be asking yourself, “Hey, what qualifies a finance guy to give me advice on charities?” Well, contrary to what may be popular belief, an expert in finance and investing could provide some unique insights on charitable giving that you won’t find elsewhere.
According to The Guardian, public trust in charities has hit a record low after research from the Charity Commission found that,” people are concerned about fundraising techniques and how charities spend their money.” I think we’ve all seen headlines from some of the many charity scandals where supposedly not-for-profit organizations take money intended for charitable causes and allocate it to lavish corporate expenses or executive bonuses. With a bit of financial insight and leverage, we can find a few strategies that can make the money you donate as effective as possible.
1. Research a Charity’s Rating Before You Donate
An incredible NGO that offers a great tool for researching charities is Charity Watch, which gives every charity a grade from A to F based on their independent research on how efficiently charities use donated funds in advancing a cause and inciting positive change. Consider this part of the same due diligence that financiers and investors must do on companies before investing – we all know how common red flags like accounting errors and ambiguous financial models can make companies riskier investments. Hold charities to the same standard.
2. When Investing, Consider Making Social Impact (or CSR) a Factor
Corporate Social Responsibility (CSR) is a corporation’s drive to measure and assume responsibility for its social and environmental impact, and thankfully, it seems as if this has become a norm among most companies - particularly most of those in the Fortune 500. Although most companies have a division that deals with CSR, and some publish quarterly CSR reports, each company places a different emphasis on the importance of CSR. The truth of the matter is that some companies may just be engaging in CSR initiatives to cover up or divert attention from less positive things or past scandals. However, other companies make social and environmental impact a core part of their mission, and with a few minutes of research you can discover whether the company you’re looking at is truly committed to the cause. Find out how long the company has been engaging in CSR projects, how effective those projects have been, and if that company’s competitors are doing something similar.
3. Affiliate Yourself with a Cause
As the practice of matching other people’s donations becomes increasingly popular, it’s important to make sure your network of socially conscious peers is aware of the causes you support because it can multiple the impact and volume of your donation. Attaching the weight of your name, your brand, and your following to a cause in a public forum like a personal website or public posts to your social networks creates a much bigger impact than you think. All you have to be able to do is articulate which cause is most important to you and why. Like and Follow the social media pages of the biggest organizations fighting for your cause. By showing your network that you champion a particular cause, you make yourself approachable to others who also support the cause and have experience with charities that work with that cause or issue. To many people, the endorsements they trust the most don’t come from companies or the government - they come from their friends. Be the friend that recommends and advocates for the charitable cause, and in doing so, open up the opportunity to encourage others to match your donations, research charitable giving, and spread awareness of the cause.
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Renato Negrin Travels
As a world traveler, Renato has developed a truly globalized perspective. Him and his wife Siu care deeply about issue that affect people around the world and want to focus on contributing to organizations that can drive positive change.