Impact giving: The power of collective giving
Reflecting on the pandemic and its profound effect on our communities, it's hard not to think about the incredible need our nonprofit organizations have faced this past year, and the importance of giving back to society. Giving back can take on many faces and it’s crucial to understand that it doesn’t have to be monetary or done alone. There is great power when many people join forces in a common goal. Across many nonprofit organizations, we’ve witnessed the significant impact of individuals banding together, especially those formed with the goal of encouraging members to pool their assets to make a highly meaningful transformational gift, or perhaps a number of them. It’s worth noting, however, that placing a focus on impact giving is not just reserved for organizations. Wealthy individuals (and more specifically, women) are showing the power of their wealth through impactful donations.
A wonderful example of this power is the numerous Impact 100 organizations around the country and globally. Impact100 was founded by Wendy Steele in 2001, with the goal of creating a new and expanded outlet for women’s giving. Steele launched this organization with the goal of empowering women to see themselves as activists by utilizing large grants to make an impact in their communities1. Over time, many other Impact100 organizations were founded with the same objective of making transformational gifts within local communities.
Another benefit, albeit non-financial in nature, is the strong sense of community that the organizations created. They bring people together within a community who may not have otherwise crossed paths, with the intent of collaborating toward a common goal and bettering their local communities. For instance, within New Jersey there are four Impact100 organizations with focus throughout the state, and Impact100 organizations in at least 25 states2. These organizations espouse the concept of “the power of one multiplied by many.” The global pandemic highlighted needs in so many areas of the country and globe. It also brought out the power of the uber wealthy to help organizations and populations that are regularly underserved.
Another strong example of impact giving came from MacKenzie Scott (ex-wife of Jeff Bezos, founder of Amazon.com Inc.). She committed to give away $4.2 billion of her wealth, focusing much of her gifting on higher education institutions – including several tribal colleges and historically Black colleges and universities – food banks and local affiliates of the Goodwill Industries International. Scott’s team conducted much of the due diligence to determine where they wanted to gift. They also didn’t want to give the gifts with strings attached. The magnitude of the grants received by many of the educational institutions far outpaced anything they had received before, or even held in their respective endowments. Scott also focused on donations to local organizations devoted to assisting communities3.
In New Jersey, for instance, the NJ Pandemic Relief Fund, via the Community Foundation of NJ, was a beneficiary of Scott’s generosity.
Of course, not everyone has $4.2 billion of assets to give away. But the point behind impact giving is to be able to collaborate with others to make a difference. Three of the key benefits of giving are impact, sense of community and altruism.
Through collective giving, since the power of one is multiplied by many, smaller gifts can be pooled together to make larger, more impactful and transformational gifts. Collective giving can make a big difference, especially to smaller, more community-driven organizations.
Sense of community
Working and giving together for a common goal, whether in person or virtually, requires coordination and teamwork. The value of partnerships and friendships created when working together for a common benefit is immeasurable and often enduring.
Not only does it feel good to give, but the giving spirit is infectious. A study by James Fowler of the University of California San Diego, and Nicholas Christakis of Harvard University, was published in the Proceedings of the National Academy of Science. This study showed that when one person behaves generously, it inspires observers to behave generously later, toward different people4.
Impact giving doesn’t have to take the form of monetary donations. Simply working together to accomplish a community project or volunteering as a group can create a similar impact. One of the biggest challenges for nonprofits during the pandemic was finding enough volunteers. Having to socially distance and limiting exposure to others was difficult for many nonprofits. As social distancing protocols loosen, there’s more opportunity for people to come together to volunteer at local organizations or at community gardens and the like.
Great progress can be made in small increments. It’s the cumulative effort that counts, and the positive results that such effort generates.
1 About Us – Impact100 Global
ABOUT THE AUTHOR
Lesley Draper, CFP, CTFA
Lesley Draper is a Partner and Wealth Advisor. She is responsible for managing client relationships, advising families and individuals on financial planning, tax planning and investment management. She received her BS from Purdue University in West Lafayette, Indiana. She is a CERTIFIED FINANCIAL PLANNER™ professional, a Certified Trust and Financial Advisor (CTFA). She is currently studying for Charitable Advisor in Philanthropy (CAP) designation. She is passionate about giving back and co-chairs RegentAtlantic's Neighborhood Nonprofits team and serves on multiple charitable boards, including P.G. Chambers School and Morristown Festival of Books. Prior to joining RegentAtlantic, Lesley was a Vice President at Citi Private Bank and subsequently spent 11 years at U.S. Trust Company of New York in the Financial Planning and Family Wealth departments. Lesley enjoys golfing, fly fishing and resides in Montclair, NJ with her partner Bob, two German Shepherds and four rescue cats.
This information is for educational purposes and is not intended to provide, and should not be relied upon for, accounting, legal, tax, insurance, or investment advice. This does not constitute an offer to provide any services, nor a solicitation to purchase securities. The contents are not intended to be advice tailored to any particular person or situation. We believe the information provided is accurate and reliable, but do not warrant it as to completeness or accuracy. This information may include opinions or forecasts, including investment strategies and economic and market conditions; however, there is no guarantee that such opinions or forecasts will prove to be correct, and they also may change without notice. We encourage you to speak with a qualified professional regarding your scenario and the then-current applicable laws and rules.
Different types of investments involve degrees of risk. Future performance of any investment or wealth management strategy, including those recommended by us, may not be profitable, suitable, or prove successful. Past performance is not indicative of future results. One cannot invest directly in an index or benchmark, and those do not reflect the deduction of various fees which would diminish results. Any index or benchmark performance figures are for comparison purposes only, and client account holdings will not directly correspond to any such data.
Our clients must, in writing, advise us of personal, financial, or investment objective changes and any restrictions desired on our services so that we may re-evaluate any previous recommendations and adjust our advisory services as needed. For current clients, please advise us immediately if you are not receiving monthly account statements from your custodian. We encourage you to compare your custodial statements to any information we provide to you.