An Argument for Focusing Charity Dollars

The following is an excerpt from an article in:


The New York Times
Saturday, December 22, 2012

An Argument for Focusing Charity Dollars

By PAUL SULLIVAN

THIS is a time of year when solicitations for donations are coming at you from every direction, and for good reason: the end of the year is when people make most of their gifts to charity.

But these requests for money, from the checkout line to the mailbox, can pull well-intentioned people in too many directions and turn an act of generosity that should lift the spirits of the donor and help a worthy cause into another stressful obligation.

This onslaught and a story I was told this week — more about that later — got me thinking about the argument for focused giving, for picking an area that you care about and putting most of your philanthropic dollars into it. This is something my wife and I have done for many years and have found very rewarding: it has made us more knowledgeable, passionate and involved in the area we support.

Patrick Rooney, associate dean for academic affairs and research at Indiana University’s School of Philanthropy, said he did not want to deter people from giving away their money however they wanted. But he added, “You’re better off to target three, four or five charities and give larger gifts to a small number of charities as opposed to giving a large number of small checks.”

Part of the reason is that a single larger gift could do more good. But that was not the only benefit. “From the recipient organization’s perspective, having a gift from $1, $100, $1,000, to $100 million, there are some transaction costs,” Mr. Rooney said. “You’ve got to book it, deposit it, acknowledge the donor and cultivate the donor for future gifts. If you have a lot of checks for $5 and $10, you have a lot of transaction costs for a relatively small gift.”

The other side of this debate is equally valid: it’s your money, and if you want to give a little bit to 27 different groups, that’s your choice. As Melissa Berman, president and chief executive of Rockefeller Philanthropy Advisers, told me: “Philanthropy is voluntary. When someone tells you how your money is supposed to be used and in what proportion, that’s called a tax.”

I can appreciate both sides. But I spent this week talking to a group of people focused on one cause — breast cancer research. Their desire to support this cause, which has had great success, made an interesting argument for being more selective with donations. Here’s the story.

For more, visit www.nytimes.com.