2. Factor in attitude to risk

The second step is to determine the method of solving the issue. Should your client focus on a specific location, or are they thinking more nationally or internationally? Do they want to try to change an entire system or help solve a problem for a specific group of people? 

Understanding the difference your client wants to see will help to determine potential routes forward. Grassroots organisations generally work within communities. Whereas organisations working to create systemic change aim to address the root cause of an issue and alter the mechanisms that hold the problem in place, to create long-lasting change.

Systems change is harder to achieve and so a better fit for donors with a higher appetite for risk. Creating such high level change is also an opportunity for philanthropic leverage – using philanthropic capital to influence how others (donors, governments or corporates) give to good causes. If successful, there can be enormous impact.

There is value in both approaches and it may be worth adopting both approaches to tackle an issue from multiple angles.

3. Consider how to give to chosen charities

There are different ways to support a charity; committing to funding a charity for several years to allow the organisation to plan, or making larger one-off donations to different organisations every year, etc. If your client wants to support a portfolio of different organisations, adopting a hybrid approach might be a good idea.

While there’s no right or wrong way to give to charity, it’s worth considering:

• Supporting the running costs or overheads of an organisation, so that they’re not restricted in their ability to perform, can operate more effectively and can plan for the future.
• Speaking to the charity beforehand to understand what type of funding, and over what time period, would be most useful to them.
• Making multiyear commitments to charities that align with your client’s giving strategy, alongside smaller one-off donations to humanitarian issues or personal causes.

4. Map a timeframe

How long does your client want to keep giving for? Do they wish to give all their money away in a matter of years, or do they see the next generation continue giving beyond their lifetime? Depending on their preferences, they may want to consider how much they give away now to factor in the longevity and sustainability of their giving.

When thinking about a timeline for a giving strategy, consider the nature of the issues being addressed. Many issues facing the world today could be solved by a concentrated release of philanthropic capital. So, should funds go to charity now or be held back to solve future issues? It’s very difficult to predict the needs of a future world, but if your client would like to set up their giving to continue after their lifetime, then future-proofing their strategy with enough flexibility to be relevant to future generations should also be considered.

5. Consider investing philanthropic capital

Investing some of the capital to preserve the levels of the philanthropic pot is also worth considering. At CAF we’re not regulated to give financial advice, but you may want to think about:

• Aligning investments with your client’s values or chosen cause areas, ensuring any investments don’t contradict the missions of the charities due to benefit from these funds.
• Determining if it’s even worth making investments, depending on the volume and speed at which funds pass through their donor advised fund. Alternatively, a social investment loan through CAF Venturesome, can achieve a social as well as financial return.