Any organization that relies on philanthropy to operate should be planning carefully for the future. Like many things, philanthropy is an exercise in free will. People choose what to support based on their opinions, experiences, recommendations, etc. – just like they choose what to buy from a business or choose who to vote for in an election. And because of this, any organization that doesn’t at least consider adapting to changes and trends risks putting an important source of funding at risk. Strategic philanthropy is a trend that can help capture the confidence of your donors and solidify their trust going forward.

What is strategic philanthropy?

Strategic philanthropy uses planning and measurable goals to help philanthropists give more effectively. It takes many of the concepts found in the world of business (i.e., long-term planning, experimentation, collecting data, cost-benefit analysis) and applies them to a philanthropic endeavor. As larger donors and private foundations become more sophisticated, many will seek to embrace this concept more wholeheartedly. It’s especially prominent among younger philanthropists – those that grew up around a culture of philanthropy and have perhaps seen where their parents or grandparents have fallen short.

For example, an alumni wants to give a donation to a university. An idea he wants to explore is expanding opportunities for cutting-edge, personalized technology, so he stipulates that he wants his monetary donation to go towards technological advancements. He also wants to work with the university to measure the impact that this technology has over time. The university needs to openly communicate with the donor to show him where and how his dollars are being spent in order to maintain a good relationship and help ensure future donations (i.e.; providing new laptops for incoming students).

Consider the following strategies to attract and work with donors who want to give strategically:

• Non-profits have always had to justify why they should receive a large gift or grant. In the future, part of that justification may involve providing more hard data to your benefactors.
• Show a willingness to experiment. There are often many different theories for how to best tackle a complex problem. Some donors may want to experiment with different approaches to see which has the most success.
• Know when to push back. The downside of strategic philanthropy is that donors may have a difficult time ceding control. Explain that you are on the front line of the problem your organization is trying to address and sell to your donors the expertise that you have.