Optimizing Charitable Gifts

Charitable donations matter

They matter to the charity doing the work and they matter to the donor. Charities often forget what the donors value. It is only the charity itself only sometimes.

Fund raisers should know

Donors often see charities as an extension of themselves. Charities are doing the work they might do if they had the time and skill. Money is their surrogate. They “hire the charity” to do something they see to be valuable.

As with others they hire, their measurement may be a little different than the charity thinks. Would they be excited if a hired contractor had a grand ball? Maybe, but not because they saw it advance their purpose. Flashy headquarters? Maybe, but more likely they have learned to dislike unneeded overhead. Media coverage? Maybe, but again, how does that help solve the problem?

Donors should know

Marketing matters. Just like a business, a charity must communicate value for people to give them money. That costs money and it is not directly attached to the problems. Charity is competitive. Some money must be directed to getting more money. A charity with no money directed to marketing will fail.

There may be a net gain in outcome to “waste a little money” on publicity and creature comforts that make staff feel better and be more productive.

Not every year is like every other. Charities need a reserve to deal with the dips in donations. There are few activities that are one and done. The Shriners do not build a hospital and walk away. Think longer than one year. Don’t be offended by a charity holding invested capital.

An overview

I came on this image and thought it reconciled the conflicted viewing points. Give it some thought both as a charity seeking funds and a donor rationalizing the donation budget.

Clarity of purpose and an understanding of reasonable outcomes will make everyone’s task easier.

Then there remains the method

Yes doesn’t happen without how. Motivated donors should consider becoming perpetual donors.

If you stick to annual gifts, the charity will eventually lose your revenue. You can become a perpetual donor by giving capital in your will or while living. If you want them to have $3,000 per year plus inflation, they will need about $100,000 invested to get that outcome.

Fitting the gift into your investment plan, your lifestyle plan, and your estate distribution plan, is a bit technical, but not challenging. Use tax effects to help you. Consider life insurance. It is uniquely capable at providing money in an estate situation.

Take a look at How to Give Away Your Taxes.


I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

One Comment on “Optimizing Charitable Gifts

  1. Thank you, Don, I truly value your dedication and your ability to convey profound truths in a very easy manner. My day is not complete without a dose of your inspired writing irrespective of the subject. Your generosity is a blessing to all of us who follow you. May God give you long life

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