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Last week, in Tucson, a bunch of billionaires, led by Warren Buffet and Bill Gates, gathered to talk about giving away their fortunes .
I wish more women would do that...talk about giving away money. And I don't mean to Visa, Starbucks or Saks. Philanthropy is where the power (and the fun) is. And you don't have to be a billionaire (or millionaire, for that matter) to participate.
Philanthropy is usually the least thought out, most disorganized part of our financial activities.We know charitable contributions save us taxes. But the question we rarely ask is: How can I maximize not only my tax benefits but the power that philanthropy gives me?
The more thought and planning you give to your charitable donations, the more—so to speak—bang you get from your buck—financially, socially and emotionally. To this end, I put together Six Principles of Powerful Philanthropy:
1. Educate yourself financially. The number one reason women don’t give more is lack of knowledge. No matter how much money a woman has, if she’s afraid, insecure, and/or ignorant around money, she’ll be restrained in her giving . In a recent study, 73% of women felt that passing money to children and causes is important, but only 14% have conducted detailed financial planning to ensure an effective wealth transfer.
2. Get your financial house in order (with your spouse, if you have one). Review your finances regularly. Smart money management follows 4 rules:
- Spend less
- Save more
- Invest wisely
- Give generously
These rules must be followed in this order. Giving without following the first three rules is an act of self sabotage. Not only do you jeopardize your future security, but you diminish the impact you can make with your money.
3. See yourself as a philanthropist in your own right. Too many women don’t engage in planned giving is because, if they’re not a Carnegie or Rockefeller, they don’t think they have enough. Not so. Small amounts can add up to big changes. Another reason, women think it’s their husband’s money, so charitable donations are his responsibility. But women outlive their spouse and will ultimately be in charge of the family estate.
4. Give serious thought to the legacy you want to leave. I once saw a poster with the word: “will it matter that I was?” Ask yourself: How do I want people to remember me? What changes would I like to see in the world. What do I value most? Does my giving reflect my values?
5. Work with professionals. Figuring out how much is possible and advantageous to give is a complex issue. It should be a team effort. Find reputable estate planners, attorneys, financial advisors and accountants. Studies show, however, nine out of 10 people don’t mention charities in their will. So if a professional doesn’t bring it up, you be sure to.
6. Make it a family affair. Use philanthropy as a way to teach kinds about values, money management, and life goals.
The most powerful philanthropists are not the ones with the highest net worth. They are the ones who are financially educated, financially secure, and passionate about a cause. Don't you want to be one of them?
