If you have been reading the news, you would have probably heard about MacKenzie Scott is redefining corporate philanthropy. The global media does not even know how much she has donated to charities, but they have some ridiculous estimates.
She is not holding press conferences or getting in front of cameras proclaiming how she is single-handedly changing the world. She is simply giving away money to charities that have been selected after careful deliberations by her team.
What she is doing might look simple enough, but in reality, is very difficult. Most businesses that have had their first brush with philanthropy often end up making mistakes. This can be either selecting a cause that is not personal enough or engaging with a non-credible charity.
In this article, we are going to help out businesses and entrepreneurs that want to engage in philanthropic activities. We speak with experts at g2c.childrensociety.org.sg, one of the leading platforms that operate in the non-profit and charitable ecosystem. We ask them to list down five major mistakes to avoid.
List of 5 Mistakes to avoid when starting out in Philanthropy
1. Following the ‘Peanut Model’ in Philanthropy Pursuits
A lot of businesses and entrepreneurs that start out in philanthropy want to touch as many lives as possible. This makes them dilute the focus of their engagement. Giving too little to too many beneficiaries is not likely to make any major impact on their lives.
This should be avoided and, in its place, focussed engagements that make purposeful impacts need to be planned. This means that even if you are helping a small section of people comprehensively, that is always a better approach to philanthropy.
2. Having Wrong Aspirations and the End-Goals of Funding
You cannot eliminate all the trash in the ocean by giving away a couple of million in a year. Leading philanthropists believe that there is s tendency to be overly optimistic as far as engagements can make.
Rather than think about ending global poverty, it would be better to be realistic about your goals and provide complete schooling to hundred kids. Many entrepreneurs start by thinking they can do a lot and then lose momentum after a small period when they feel discouraged.
3. Thinking about Money as the only component of Philanthropy
Successful businesses and enterprising entrepreneurs have a lot more to give back to society than simply their money. They can make an impact by creating development projects, building infrastructure, or referring a trustworthy colleague who can turn the fortunes of social programs around.
Money is probably the easiest thing you can give away. Time is the most precious. You can hold training sessions, work on skill development or simply have a get-together where you and your employees are just helping out with processes in institutions.
4. Failing to Research Non-Profits and Charities before you commit
A lot of entrepreneurs and businesses simply associate with a charitable organization simply because someone has recommended it to them. They fail to do their research to find out whether the organization is a credible one or not.
It is essential to speak to individuals at the charity, go over their successes, evaluate their achievements, and see what you can bring to the table. This needs to be an ongoing conversation between their goals and yours. Else, you will feel disillusioned.
5. Micromanaging every aspect of the process
Philanthropic engagements can range from the detached to the obsessive. If you do not have a lot of time on your hands, you best leave the work of the non-profit to the professional working at the organization.
Trying to take over all aspects of their functioning based on contributing a cheque should be avoided. It can make you too involved and attached. You need to leave the day-to-day handling to the organization and look at meaningful ways of making contributions.
The Role of Emotions in Corporate Philanthropy
There is no doubt that there are significant tangible advantages for businesses that want to get into philanthropy. From tax benefits to improved business branding, CSR takes care of all this and much more. Yet, when it comes to philanthropy, entrepreneurs and businesses need to look beyond the tangible and material benefits.
However, a lot of experts have shed light on the emotional and sentimental side of philanthropy. They say that being emotional can rob you of correct decision-making. at the end of the day, entrepreneurs need to engage with activities that can make a critical impact on the lives of the less privileged.
Emotions in philanthropy should be avoided if experts are to be believed. This might force you to make impulsive decisions, without doing rational due diligence about the cause or the organization leading it. You need to be balanced when making such decisions.
There is no immediate way to help a large section of people. It requires strategic planning, execution, and measurement. This can only be done if you are bringing skills, expertise, and guidance to philanthropy in the same way you brought it to your business.
Emotions should only play a role in finding causes that you or your business connects with at a personal level. Apart from that, philanthropic decisions need to be guided by logic and reason, and not by emotions and sentiments.
The Bottom Line
Many people think that philanthropy is something that comes from within and cannot be taught. However, in most situations, we are not empathetic enough or have experiences that draw us towards philanthropy. By engaging with charitable institutions and non-profits, individuals can find themselves being a part of something bigger. This can help in positive self-development and growing awareness on a range of issues.
In this article, we have outlined the five major mistakes to avoid when starting out in philanthropy. Reading all the points in the article will allow you to start on the right foot as far as philanthropy is concerned. If you have any more questions, that you would want to raise about this topic, please do so in the comments section below. We will be more than happy to guide you on the correct philanthropic path.