Six basics of wise giving:
3. Choose your giving method
Your chosen giving method will depend a lot on your goal. If your goal is broad, you may want your support to be diversified (e.g. grants to support community development including a variety of activities). If your goal is narrow you may find a single charity or cause to focus on.
We have identified four key methods of giving.
- Donate to existing programmes or organisations
- Contribute time and services
- Provide grants
- Partnership funding
This section contains things you need to consider for each method of giving.
This approach is preferred by individuals, businesses and organisations who want to deliver funding to a known activity or organisation at the lowest cost, for example bequests, sponsorship, or cash donations. Things to consider are listed below.
- If investing in other organisations, do they have a mission, vision or goal that is aligned with your stated goal?
- Check the organisation has a robust governance structure with a track record for good management and financial accountability.
- Which organisations are achieving positive impact in your desired area? (e.g. locally, or nationally) and do they have evidence that what they do works?
- Charities Commission registration is recommended and can be identified by a registration number on donation forms, or by searching at www.charities.govt.nz Registration ensures strong accountability for the use of funds. It also means your donation is tax-deductible.
- Small organisations that may not (yet) be registered with the Charities Commission, but are known for helping children in need, may also be worth supporting. You should be aware that they may be less accountable for their use of funds.
- Giving through straight donations does not usually confer rights to control the use of your giving. Rather, this is a low compliance, low cost, way to fund activities you think need it.
Businesses and organisations with particular expertise can give time and services to help children. Some businesses operate as social enterprises. Social enterprises are activities run by organisations whose main goal is a social outcome and for whom profit is only a means to sustain the ultimate social benefit. Other businesses or organisations give time and services as part of their social responsibility or ‘triple bottom line’ reporting.
Business giving helps a business through its ‘social licence to operate’ in a community. It promotes customer loyalty and supports employee satisfaction. The following are things to do or consider when contributing time and services to children’s needs in a community.
- Build relationships with your community. Foster a sense of ‘belonging’ for your business in that community through your giving. Your employees are members of the community and often, also parents, who can tap into the understanding of local children’s needs.
- Can you offer a fixed proportion of services as ‘pro bono’ work, for example dental services, legal services, or installers of home insulation and efficient heating?
- Can you give expertise, such as business advice, to support social enterprises?
- Can you share goods or services you have purchased? For example use existing advertising slots or campaigns and co-advertise the philanthropic cause at the same time as the business’s products or services.
- Offer your employees a chance to volunteer to support your agreed goal.
- Consider how you will communicate your giving. How will you let your customers know what you’re doing and the goal of your giving?
Providing grants is a powerful way to maintain strategic control over the direction of your funding, while being responsive to the needs of the community. You can allocate portions of your total investment to support different parts of a whole strategy (known as portfolio management).
Some other things to consider with this method of giving are:
- Do you have the right mix of skills for grant making (see the next section)? This includes the capacity to deal with applications for grants.
- If funding other people, do they have a governance structure, financial accountability, and skilled staff or volunteers to deliver the activities?
- Does the grantee have an evaluation capacity (or are you prepared to fund one independently)? This is important when it comes to managing your grant-giving portfolio and improving its impact over time.
- If you are funding newly established organisations, allow sufficient time for them to get up and running. This can take several months if recruitment and planning are required.
When there are large, complex social problems that need addressing, partnerships and collective impact by a number of players are valuable methods to create solutions. Consider collaborative, coordinated methods that can achieve collective impact or ‘more bang for shared buck’.
- Partners need to agree together a common goal, work together to develop the strategy and decide on the investment mechanisms.
- Partnerships usually require annual commitments for a significant number of years to achieve positive impact. It can take years to join NGOs and align funding.
- Determine the level of accountability, reporting or evaluation. What is reasonable here may vary with the size of your contribution(s).
- You should have an agreed exit strategy to ensure sustainability and optimising outcomes of investments. This means that if your funding is not achieving your stated goal, you can direct it next time to activities that are more likely to be successful.
Partnering and co-investment are powerful ways to achieve beneficial outcomes. Philanthropy New Zealand has developed advice and examples of collaborative investment methods e.g. collective impact investing. Read about these in How to work together.