The unprecedented outpouring of generosity that our country has in the face of worldwide disasters proves the power of an exercise that I use with my philanthropy planning clients. As Thanksgiving and the year-end "giving season" starts, you might find it useful for yourself or your company!
When developing the budget policies for their foundation or company, I ask the planners to stand and recall the last charitable donation they wrote on their own checkbook and how much it was for. I tell them that as we go through the exercise, they should sit down when they feel that the amount we're proposing would cause them some sort of personal pain or injury.
Think about that last check; let's say it was for $500 to the Minneapolis Institute of Art. I ask them to double that amount. No one ever sits down for $1,000. I ask them to double the $1,000 to $2,000. People might not sit down, but they might start feeling uncomfortable. They have a charitable budget or a pre-set idea of how much they feel is right to give to that charity and this is getting out of that range. Let's double that again to $4,000. Quite a few people are sitting down now. This has eaten up all of their charitable budget for the museum and most of their other charities. At $8,000, almost everyone has sat down. Their budget is exhausted. But they also know that they did not give at their true capacity when they wrote out that $500 check. They didn't stretch their giving.
There are a couple generous people still on their feet. They may have budgets, too, but they realize that there's a lot more money in their net worth that can be given. They know that there are other ways to stretch their budget to make that exceptional gift without disturbing their giving to other charities and without hurting their lifestyles. They give paid-up life insurance policies, or appreciated stocks. They give those larger amounts by pledging over time.
The billions of dollars that private citizens will donate to the Red Cross, Salvation Army, and dozens of local organizations like Hope for the City when all is said and done about Hurricane Katrina will be a result of most Americans making stretch gifts. There is a precedent for this kind of stretch giving: Relief to the families of the 9/11 disasters.
Charitable giving boomed in 2001, with a substantial percentage of it going to 9/11 families. Unfortunately, most people failed to be truly expansive in their giving and other causes suffered substantially from this "robbing Peter to pay Paul" method of philanthropy. Most American "sat down" when they thought they couldn't give more.
Other donors sustained their giving to charities dedicated to the disaster relief long after the dust had settled, mostly at diminished levels. Over all, donations to American charities had pretty much reverted to their pre-9/11 levels by the end of 2003. Just like rubber bands, most donors who stretched to respond to 9/11 snapped back to writing smaller and fewer checks. They began to feel "compassion fatigue." They sat down.
When you review the donations you and your business have made to relief for victims of Hurricane Katrina, ask yourself how you felt about stretch-giving. Ask yourself to consider the long-term needs and how long you feel that you can stretch to continue giving at that level.
Look at this as an opportunity not only to provide short-term aid, but also to make long-term investments through nonprofit organizations to address the social problems that were exposed with such harsh reality through these tragedies. Then find ways to make it happen. Call in your broker and review your portfolio. Look at your business plan and see how you can integrate this kind of giving into your operations.
Think about how good it feels when we stretch after sitting too long -- perhaps after an enormous Thanksgiving dinner -- and then stretch out that stretch giving throughout the year.
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