Why You Should Approach Philanthropy Like a Business Exec
It’s easy to donate money to your charity of choice and call it philanthropy. While generous, this passive form of philanthropy is often short-sighted and limited in its potential. Business executives who really want to make a difference in the causes they support will fare better by treating their philanthropic mission as an entrepreneurial venture. Not only are the chances of success enhanced, but the personal rewards are dramatically increased.
Successful philanthropies operate very much like a business enterprise with an organizational structure, core values and mission, and short-term and long-term goals. Business executives with experience running and operating a business can use their skills and knowledge to help these organizations flourish. Consider these five key reasons why you should approach philanthropy like a business executive:
1. Create Scalable Systems
Whether you’re supporting a local food bank or an organization that helps wounded warriors, the organization will be able to grow and expand faster when it has a scalable mindset and the appropriate systems in place. Starting small and testing different initiatives is prudent in the short-term but there should be a constant focus on how the operations can scale once the model is proven. Retaining the option to expand is a common practice for business executives that can save money in the short-term and help the company build upon any successes on a larger scale in the long-term. Consider serving as an advisor to instill the mindset of prudently growing when the opportunities present themselves.
2. Work with the Right People
All good business owners know that success is related to the quality and talent of their team. Encouraging a team mentality, while collaborating and facilitating the appointment of talented board members and employees can help to create a solid foundation for the charitable organization to grow. You will want to work with organizations that invest the time and energy to recruit suitable volunteers and experienced contributors for their cause, as it signals more than a passive commitment. Like any business, the people involved will be what drives success.
3. Demand Organizational Efficiency
Philanthropic organizations should be treated like a business in that the basics of cash flow are critical to accomplishing the mission. Too many organizations are focused on “doing good” without devoting the time to understanding the simple financial mechanics of sustaining oneself. Evaluate the budgets to ascertain sustainability. When these aren’t in place, educate staff to their importance. Unless the organization can sustain itself through steadily attracting more and larger donations, it will not last. Consider how the organization is managing its money so you aren’t donating to a cause that may not end up using the money wisely. Offer financial or accounting advice if you have a financial background so the organization can develop an effective money management system.
4. Focus on Creating Solutions
Throwing money at a problem can help to solve a few people’s isolated problems in the short-term but it doesn’t do much for a broader mandate. You’ll need an entrepreneurial spirit to identify the root causes of the targeted problems the philanthropy is addressing in order to come up with effective long-term solutions. These solutions may be novel or adapted from others. It doesn’t matter where the ideas are generated because once they are embraced they belong to the organization. Help identify the most effective solution to address the problems as this will be essential to attract additional funds.
5. Build and Execute a Plan
Every successful business executive appreciates the value in developing a strategic and tactical plan and then relentlessly focusing on it. This process forces thinking about challenges and opportunities and prioritizing limited resources. Most philanthropies, especially newer ones or those strapped for resources, are in desperate need of this critical step. This is an area where business experience can be invaluable to ensuring a charity maximizes its capabilities.
Approaching philanthropy like a business executive can help you make choices that will have the most impact in the community, and possibly beyond. From offering to help create a scalable business model to recognizing talented volunteers, there are several things you can do to help your charity of choice grow and thrive with your support.
This post was originally published on GreensteinFamilyFoundation.org
About Jeff Greenstein
Jeff Greenstein is an American entrepreneur and private investor based in Seattle, Washington. He is currently the President of YIS Capital, an active philanthropist and passionate dealer and collector in contemporary art. Related to these interests, Jeff is a co-founder of the Greenstein Family Foundation and the Greenstein Lab.
