Monday, March 15, 2010

Microphilanthropy as Financial Planning

I attended YNPN's discussion last Friday given by Rebecca Schreiber of Solid Ground Financial Planning, titled "Micro-philanthropy: Making a Big Impact with Small Contributions." I showed up expecting to hear several iterations of "Never doubt that a small group of thoughtful, committed citizens can change the world," but instead I heard something much more selfish.

Schreiber centered most of her talk on how charitable giving, particularly small, recurring amounts, can actually help balance your budget. She did touch on how easy it is to be a part of that small group of committed citizens in the digital age, as well as a brief overview of giving advice, but what interested me the most was her discussion of how charitable giving can help you prioritize your purchases and get your financials in order.

"Anything that makes us stop and think 'Is this really what I want to spend my money on?' is a good thing," said Schreiber. Taking a step back to think about where we want to donate is an important part of smart giving/social investing, but that framework for decision-making can also apply to more typical, everyday transactions.

Schreiber said that the feeling we get from making a donation should be the same feeling we get from every purchase or financial transaction. We should feel confident about every purchase just as we feel confident that the donation we make is going to the right cause. This discernment will help to make less sporadic purchases and keep an eye on budgeting.

Taking an intentional step to give and give regularily may also help some of us (younger) people budget for the first time. To prioritize smart giving is to prioritize smart budgeting, as we need to be aware of our financials to be able to give back. We also need to know how much we have to know how much we can afford to give, and Schreiber answers the difficult question of how much to give by suggesting "No more than you save." (Of course, this then asks the question, How much to save?) She underlined the importance of smart giving, both in recipient and quantity, to ensure "your ability to give in the future."

Overall, I thought the presentation, while not exactly what I expected, helped me see charitable giving in a new way. I know it's unreasonable to think I can feel as good about every purchase I make as I do with my social investments (and it might not even be good to feel good about them), but it is interesting to think about how the tangible benefits of giving go not only to the recipient, but also to the donor. 

The full version of the presentation is here, posted with permission.


  1. Jeff,

    Great post, especially for someone with a small-ish paycheck thinking about giving.

    One thought I had is how people could pool their small donations to make a bigger impact. The idea is this: get 5 friends together who each chip in $75. This is a meaningful large donation, but when put together with four others, it becomes $300. Much more.

    When I thought more about this, I realized that this is what happens anyway when an organization receives multiple donations. Duh.

    But I think I see a few upsides:
    -In trying to find other people you create opportunities to talk about philanthropy and giving.
    -This exerts social pressure on people to give. Assuming you do so in a tactful manner, I would consider this a good thing.
    -One person's initiative could lead to 2, 3, or 4 people giving who otherwise might not have given.

    In essence, this is the opposite of the "I'll donate $1 for everyone who joins this facebook group" group. Instead, it's "come join me in giving to X charity." Everyone feels like they're part of something bigger and you raise awareness (and money) in the process.

  2. Mark,

    I think you make a great point, something that the presentation did mention that I neglected to include.

    In some ways, I feel like the social-networking philanthropy sites I linked to in the post (Kiva, Prosper, Donors Choose, etc) create this sort of aura around giving. If you want to give $50, but don't know what you can do with it, its a great feeling to go to Kiva and see that 20 others have done the same thing and together, you've helped fill a loan.

    But I also think that actually going to people and saying "Hey, donate to this with me" is much more compelling than social networking sites, as its more personal/ more aggressive. It also creates a greater connection with the individual and makes them more involved (as we both learned from our experience with SEG.)