How to make charitable donations that also boost the economy.

Advice on how to make the world better.
May 20 2009 6:43 AM

Charity as Stimulus

How to make charitable donations that also boost the economy.

Do you have a real-life do-gooding dilemma? Please send it to ask.my.goodness@gmail.com and Patty and Sandy will try to answer it.

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Dear Patty and Sandy,

Where should I donate to provide economic stimulus as well as charity?

—Cindy in Chicago

Patty:

Cindy, the basic principles for individual giving shouldn't change much in this economy—or really ever. Continue to use your donations to support and strengthen organizations that are doing the best work in the areas you believe are most important.

The best nonprofits are weathering the storm by tightening their belts, cutting costs, and eliminating less-essential activities to ensure a relentless focus on the highest-priority efforts. While this may limit their potential for growth in the short term, it isn't entirely a bad thing. If these efforts improve efficiency, they can end up being good for organizations and their missions. Some organizations are going even further and merging with groups that have overlapping missions or pooling shared activities to ensure no dollars are wasted. This is even better. If a top-notch nonprofit you support is doing this type of efficiency review, you may want to signal your support by upping your donation this year, giving them the additional flexibility to make strategic changes. While we should all be disciplined about giving as much as we can every year, this is a particularly important time to double down your giving if possible.

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If "economic stimulus" is one of the areas you believe is most important, then I would say you should focus on a single issue that supports job creation in your community—job training programs that provide needed skills, child-care programs that support mothers while they look for or go to work, service programs that prevent families in short-term crisis from falling into homelessness or joblessness, microcredit for new entrepreneurs, and so on. Since none of us can do much to prop up the financial sector personally, supporting job retention and creation is the next-best stimulus.

Sandy:

Does philanthropy, especially personal charity, always have to be strategic and leveraged? I'm all for trying to maximize efficiency and efficacy, but what about giving just to make sure that our neighbors aren't suffering?

While it's important to make sure that the best organizations come out of this mess alive, it's also important to make sure we think about those individuals who have been hit worst by the recession. The unemployment rate is 8.9 percent, 15.8 percent if you count the underemployed or those who have given up looking for jobs, and higher for poor African-American and Latino communities. One out of every 194 households received a foreclosure notice in the first quarter of 2009. And, unsurprisingly, cities are seeing an influx of newly homeless individuals and families.

Unfortunately, the increase in need is being met with a decrease in government help, as bankrupt states slash social-services funding in an effort to balance their budgets.

The Chicago Community Trust is putting out a monthly report on the impact of the economic crisis locally and is funneling donations to local organizations providing food, shelter, and heating to those who need it most. In fact, it is currently matching every $1 you give to the Unity Challenge (focused on supporting local service agencies) with $2 from the trust. Other community foundations have similar programs to help the most vulnerable, like the Neighbors in Need Fund in Washington, D.C., or the Building Resilience Fund in Seattle. So if you are lucky enough to have some money to spare, follow my mom's advice and give to the organizations you want to thrive, but also to your local safety net providers.

Do you have a real-life do-gooding dilemma? Please send it to ask.my.goodness@gmail.com and Patty and Sandy will try to answer it.

In our ongoing effort to do better ourselves, we're donating 25 percent of the proceeds from this column to ONE.org—an organization committed to raising public awareness about the issues of global poverty, hunger, and disease and the efforts to fight such problems in the world's poorest countries.

Patty Stonesifer is the chair of the Smithsonian Institution Board of Regents and a senior adviser to the Bill and Melinda Gates Foundation, where she was president, then CEO for 10 years. She spent the first two decades of her career in the technology business, where her last job was senior vice president at Microsoft.

Sandy Stonesifer works on issues related to adolescent girls' health at a nonprofit based in Washington, D.C.

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