From Responsive to Strategic: Shaping Your Philanthropic Journey

Stuart Burden, Managing Director, First Republic Private Wealth Management
October 10, 2022

  • Many people would like to employ an enhanced strategic approach to their charitable gifting.
  • The Four Stages of Philanthropy can help you identify where you're at in your philanthropic journey and how to gift more intentionally. 
  • The result is a strategic plan, rooted in your values, that helps you achieve more with your grants.  

For many people, the prospect of leveraging their wealth to help their community or further nonprofit causes is compelling. Globally, approximately $750 billion was donated to philanthropic organizations in 2020. The impact of these funds is significant and often vital to nonprofit efforts.

But how exactly do you get started? And perhaps more importantly, how do you build a gifting program that speaks to your values and enables you to do the most with your grants? These are questions that the First Republic Private Wealth Management team encounters regularly. They’re natural inquiries to have as you move from ad hoc responses to charitable requests to a strategic approach focused on key issues and deeper relationships with nonprofit organizations.

The purpose of the Four Stages of Philanthropy is to highlight this process of moving from responsive to strategic giving. By transitioning through the phases, you can impart more meaning to your philanthropy and create a program with lasting impact.

Why a philanthropic strategy matters

Charitable giving often begins organically. You may write a check to your children’s school foundation, make a donation in response to a neighbor’s fundraiser or donate to your alma mater. While not explicitly planned, these gifts can add up to a significant amount over the years. Without a philanthropic strategy, you may wonder whether you’re maximizing the possibilities and impact of your gifting.

Developing a philanthropic strategy brings purpose to your gifting. Creating a strategy entails uncovering what’s important to you and why and then aligning your grants with those issues and concerns. The resultant plan helps you determine the causes and organizations you want to prioritize. Having a plan in place prevents you from feeling overwhelmed with the number of issues and needs you could fund. Moreover, a philanthropic strategy also makes it easier to filter requests that don’t align with your mission. 

The Four Stages of Philanthropy 

Much like your broader financial plan, a philanthropic strategy begins with questions and a desire for structure and ends with a program that helps you achieve your goals. Here are the four stages: 

Stage 1: Responsive gifting and uncertain direction

As previously mentioned, this stage is the natural starting point for many people. At this stage, you are responding to requests for donations without a clear plan for the causes you want to support or how much money you want to budget. It’s common to feel slightly frustrated at this point. You may not have a good sense of the impact of your gifting or whether it’s making a difference.

You may be unsure of how to gauge the effects of your gifts or how to discuss your philanthropic activities with potential recipients. And you may want to cultivate a deeper relationship with nonprofit organizations — beyond being a source of funding — yet the path to doing so is less than clear. Finally, you may question whether your level of gifting can make a difference, especially when compared to large foundations. When we encounter clients at this stage, they often mention feeling “stuck.”

Stage 2: A desire for gifting focus and guidance

At this juncture, you recognize that a philanthropic strategy would be helpful, but you’re unsure where to start. During this stage, it’s understandable to have far more questions than answers. We often hear clients exclaim, “I don’t know what I don’t know.” And we receive long lists of questions. Some of the most common queries include:   

  • Are these grants too big or too small?
  • Should I make one-year or multiyear grants?
  • How many grant reports should I request each year from a grant recipient?
  • Should my funding provide general support, or should I target a specific activity?
  • How often should I meet with the organization, and what should I ask on a site visit?
  • And how many years should I support the same organization before redirecting my gifting to other causes? 

Stage 3: Identifying values and developing a plan  

Understanding what you want to prioritize and why creates the foundation of a solid philanthropic strategy. During this part of the process, you step away from the tactical questions about how to implement your giving to identify the purpose behind your charity. You might consider your personal and family history, previous experiences with giving, expectations for financial contributions and the values you want to support.

The good news is there’s no right answer. Instead, the goal is to uncover your priorities. That way, we can formulate a roadmap for gifting that reflects what’s most important to you — and ensures that you’re doing the most with your dedicated funds. Your final plan is rooted in your values. It also includes the implementation details, everything from your gifting budget to when you make donations to best practices for interacting with nonprofit organizations. For instance, many donors and foundations are moving toward a trust-based philanthropy model that provides nonprofits with more flexible funding — and often increases the impact of gifts in the process. 

Stage 4: Review and refine  

Your philanthropic strategy is not chiseled in stone but instead a living, breathing plan. With this in mind, you want to review your strategy annually to determine progress toward your goals and assess whether the plan still aligns with your values and passions. The annual review is also a great time to celebrate completed work, visit grant recipients and connect with other family members involved in philanthropy.

From reactive to intentional gifting

Developing a philanthropic strategy makes you more confident that your grants are less reactive and more intentional. In doing so, you can create a legacy connected to your values and designed to create a meaningful impact for generations to come.

Are you interested in creating your own philanthropic plan? Connect with the First Republic Private Wealth Management team today.

The strategies mentioned in this article may have tax and legal consequences; therefore, you should consult your own attorneys and/or tax advisors to understand the tax and legal consequences of any strategies mentioned in this document. This information is governed by our Terms and Conditions of Use.