Main Street Philanthropy
Most folks are confused by the idea of philanthropy. There’s a perception that it is only for the ultra-wealthy, and primarily for the purpose of impacting charitable organizations. However, experience has revealed that there is tremendous benefit and improvement in the lives of those responsible for the giving as well as a positive influence on the individuals or organizations that are being benefited by donations. The dollar amount of a gift is far less important than the process leading up to, and actual act of giving.
What is “The Challenge”?
The Main Street Philanthropy Challenge is a six week program that brings the lessons learned through philanthropy from the ultra wealthy to the students and families of Main Street.
Working in groups of three to five, participants will:
In addition, students will be provided with classroom education on various aspects of the non-profit/philanthropic world, including organizing and working with volunteers, the importance of philanthropy to solve social issues, and lessons in financial literacy in making wise investment decisions.
Who will participate?
Participants can be from existing groups, associations, school classes, or private families. Although groups typically consist of three to five individuals, the program works well with multiple groups working simultaneously. Ages can range from school age kids, (12 or 13) and up; nearly anyone can benefit from the program, and the depth of education materials can be adjusted based on skill set and experience.
What will they gain?
The program was designed based on developing skills in areas that have proven to be problematic in individuals’ and families’ abilities to protect and grow wealth. Participants in the Main Street Philanthropy Challenge will benefit in several unique ways: increased trust and communication among participants, expansion of preparedness and understanding of financial concepts, an appreciation for the need and purpose of philanthropy in our society, and for many, increased self-esteem and confidence by being on the giving side of philanthropy.
What a week! It’s hard to believe that this 6-week program has come to an end – it seems like yesterday we were introducing the concept to our students at McPhatter Middle School! Nonetheless, here it is, and this week we got to pile into vans and drive to non-profit organizations to deliver checks. I couldn’t be more proud of these students and the progress they have made in this program. From never having heard the word to “philanthropy”, to becoming true philanthropists! The work they have done in identifying organizations and evaluating them – both in subjective quality and the more objective measurement of their financials, they now understand more about investing in good businesses than most of us will learn in a semester course from a textbook. (At least I’m convinced of this – but I may be biased in my opinion.)
We were joined in our journey by Michelle and Joni, two wonderful individuals that were the benefactors of this program, providing the funds for these students to distribute. They flew in for the day to meet the students and see first hand how they would be dividing the donations. From their feedback, I think they felt very good about the impact that has been made on these students. As I’ve mentioned in the design of this program, the actual donations are important, but it’s the process that the participants go through that is truly the value here. The concept of Main Street Philanthropy can be used in any group, association, family, etc.
One of the more interesting parts of the day for me was to observe how each organization handled receiving the funds. We could quickly tell the level of experience that each have in fundraising. Some knew exactly how to receive a donation – making the donors feel wonderful, appreciated, impactful, and wanting to do more. Others expressed appreciation, but seemed to miss a bit on the opportunity that could follow. I’ll enjoy hearing how, or if, they leverage this story into more donations. The organizations that were selected: San Diego Humane Society, Father Joe’s Village, Becky’s House, PLNU Health Promotion Clinic, ARTS (A Reason to Survive), & Playwright’s Project. All great organizations!
All that said, this day was about these students getting to reap the rewards of their hard work these past 6-weeks. They won’t be getting a check to spend themselves, they’ll get something better: the gift of giving. Seeing their faces and the pride in delivering checks is not something I’ll forget. When we surveyed the class, nearly everyone raised they hands that they felt they would be much more likely to give of their time, talents, and resources in the future, as a result of this program. I don’t expect to be able to track that to confirm, but if even one life was impacted, and that results in a gift that may not have otherwise happened, several more lives will be positively impacted. From one to many; creating future philanthropists, strengthening bonds with each other – that’s what this is about.
A fine day in my life! Looking forward to the next group to participate!
Does a business with the best of intentions make for a good investment? Entering Week Five of our Six Week Philanthropy Challenge, we set out to help students grasp the quantitative side of our evaluation. They’ve identified casuses they’d like to support, located and visited organizations that support these causes, and have performed a level of qualitative analysis. Now, it’s time to get into the numbers.
Most non-profit organizations’ tax returns (Form 990) can be found on-line. However, for most of us, sifting through a tax return has about the appeal of a root canal. To make this a little easier for them, we first went over some basics on taxes, why we file returns, and what can be found in them. We discussed what it means to get a tax deduction for making a donation to a qualified charity. (Do you know the difference between a tax deduction and a tax credit?) Finally, we went through the returns for the organizations they had selected and visited. While there is all sorts of information that can be pulled from an 990, we focused on a few key items: expense ratios -programs, management, and fundraising; the cost to raise $1, and their short term sustainability (how long can they last on liquid assets if fundraising and revenue was to stop – a situation some have come close to experiencing these past two years). If you’d like a copy of our worksheet on Form 990 Quantitative Analysis, shoot me an email!
I was extremely impressed at the ability of the students to jump into a tax return, pull info out, and do the calculations. It turned into a fun, healthy competition over which organizations had the best ratios. Who was most efficient? Who would survive the longest? In one case, a student made the observation that he had noticed while visiting that they sure could have used air conditioning in one of the facilities. After doing his analysis, the organization seemed to be flush with cash, perhaps too efficient in some of their ratios, and probably could afford to add air conditioning. Great observation; now we need to share our findings!
Once we completed the math, it was time to really evaluate which organizations they would choose to support. For some, the additional analysis had made them more confident in their decisions, for others, they were taking a second look at which they would fund. Each group has two or three that they will choose from. Some will completely fund a single charity, some will split evenly, and another will spread different amounts based on their analysis and findings. As with any big decisions, we suggested that they sleep on the decision, and report back with their final conclusions. Groups must all agree before any distributions are made.
Next Tuesday, joined by the generous family that has made these donations possible, we’ll be climbing into vans, touring organizations, and delivering checks! Seeing the progress and growth of these students is truly amazing. They’ve come from little or no understanding of charity or philanthropy, and transitioned themselves into true philanthropists. The comment we received last week, “I never realized how hard it is to give away money” was music to my ears. They get it! It’s not about hand outs; it’s about making an impact. It’s about making sure that our participation helps those we intend to help.
Do you donate your personal capital? Time, skills, or financial resources? Are you participating in charity or philanthropy? Need some guidance in how to be more intentional with your giving? I have a list of nearly 20 students that are qualified to help! Week Six coming around the corner; good times!
Week four, two remaining, and the world seems to be coming back into balance. In this past week, our students have reached out to several more organizations, several have already visited them, and there is excitement in the air about the good work that they are doing. While several of them are sold and ready to send checks, they’ll now be visiting a second and third organization to have a comparison. There are a lot of great groups (several that could use some help in training the people that answer the phone), countless great causes, so this part should create a good opportunity for some critical thinking on which to select.
Our class session dealt with the difference between Qualitative and Quantitative analysis. While most of the students weren’t familiar with these two words, they were quick to break them down into words they did know – quality & quantity in order to muster meaning. They were right on. We focused on the qualitative assessment that they’ll be doing while volunteering and visiting these organizations. They were provided with the “23-Questions that should be Asked of an Organization before Donating.” (Send me an email if you’re interested in receiving the list.)
Next week, we tackle quantitative analysis. Most of this involves understanding how to take information from the IRS Form 990, a public document for non-profit organizations. We’ll be obtaining data and looking at specific ratios that are important to an organization’s long term stability. Program Expense Ratios, Cost to Raise $1, Revenue and Debt Ratios, Short Term Sustainability, and several more. This might get a little complicated, but I think even partial retention for these students will pay off. My guess is there are very few folks anywhere at any level that perform this level of analysis before giving. Who knows, maybe one of these students will get hired for this work by a large foundation. Or maybe I will! ha ha!
The great piece of feedback this week from students was that “it’s really hard to give away money!” How about that! A great realization. Anyone can write a check or throw cash at someone in need. There is no shortage of need. If I wrote checks to every person at the stoplight with a cardboard sign, would I be helping? Maybe. Or maybe not. Why not be intentional about it? Let’s find organizations that with proper support that will make positive, lasting impact, and build from what we’ve done. And here is the difference between charity and philanthropy!
Like the story of Oseola McCarty, I think that if one of these organizations recognizes what these students are doing and captures their story, what they’re going through and learning, they may have a wonderful opportunity to cultivate additional donors.
Thems my thoughts, penny for yours!