How – Giving Approaches

Giving Approaches

There are many different ways to be a philanthropist and the syle of approach is personal to the individual. In recent years, the study and practice of philanthropy has grown rapidly and there is now a great deal of literature, and supporting professionals, which deal with various options. Here are a few of the different approaches available to philanthropists. Most philanthropists adopt one or even more of these approaches when giving in order to maximize impact.

Type of Philanthropy

Charitable philanthropy

Unconditional donations to non-profits/community-based organizations.
Usually an upfront assessment of the project with little follow up.

Grant-making philanthropy

Grants to non-profits, usually with conditions attached.
Based by set criteria and usually approved by Trustees or Board members.
Some follow up with report submitted.

Strategic philanthropy

Similar to grant-making but selection criteria lines up against a clear strategy and theory of change.
Clearly articulated outcomes and impact expected with M&E processes.

Operating philanthropy

Philanthropist sets up entity to run charitable programs of their own (Foundation).
Foundation channels money exclusively to the implementing non-profit or will directly support a non-profit to run programmes.
Rarely, if ever grants to outside organizations.

Large scale, one off donation

Driven by a vision to establish a “bricks and mortar” capital project (legacy).
Completion of project marks the end of relationship (Building a school/hospital).

Social entrepreneurship

Applying principles and techniques of entrepreneurship to address social development issues.
Directly engaged with the execution of programs (intensive hands on management).

Social finance

Soft loans to social development organizations (non-profit or for profit).
Patient capital with longer repayment time and lower interest rates.
Ability to repay loan and interest is often a key consideration.

Venture philanthropy

Applying principles and techniques of venture capitalists to address social development issues.
High engagement approach to improving the performance of social change organizations with finance and other non-financial resources, such as business management skills.
Full M&E procedures undertaken.

Investment philanthropy

Similar to venture philanthropy whereby the philanthropist seeks to build and grow an org over the long term by investing in the capabilities of the organizations, not just individual projects.
Full M&E procedures undertaken
The investor can look for both social and financial returns.

Impact investing

Philanthropist makes an investment into a for-profit/ non-profit/ NGO, with a clear expectation of a financial return as well a social or environmental benefit or “return”.

Social investing

Similar to impact investing the emphasis is on the investment the philanthropist makes, with the expectation of a return.
The return is measured by an improvement in some social or environmental issue.
There may also be a financial return, usually below market rate.
This definition helps to differentiate the “social investor” from a “normal” investor

Achieving More Together

Relationship Between Donor and Donee

A community-based organisation or a non-profit organisation is more likely to be closer to the communities, its development issues and have a deeper understanding about the types of interventions that are required.

The Power of Collaboration

This motivation to collaborate stems from the belief that philanthropy is not just for the wealthy, and that it provides a way to feel connected...

Case Study: Building a Firm Foundation for Philanthropic Giving

A critical question to consider is who defines the real problem? Should one’s giving be based on an area that a philanthropist is passionate about?

It’s important for philanthropists to make deliberate, long-term commitments to causes and issues. This provides an opportunity to learn more about the issues you care about, and over time refine your giving to achieve maximum impact.