Focused Giving vs. a Portfolio Approach

Conventional wisdom indicates that it’s best to be focused when it comes to charitable giving and even volunteer activity.

Charity Navigator, for example, includes “Concentrate Your Giving,” among its list of Top 10 Best Practices for Savvy Donors.

“When it comes to financial investments, diversification is the key to reducing risk,” they argue. “The opposite is true for philanthropic investments…Spreading your money among multiple organizations not only results in your mail box filling up with more appeals, it also diminishes the possibility of any of those groups bringing about substantive change as each charity is wasting part of your gift on processing expenses for that gift.”

I’ve heard similar arguments made about other forms of giving – particularly, in-kind donations of time, skill, and energy.

You can have more impact if you focus on one cause, on one organization.

I don’t think I agree with that.

Not that there’s anything wrong with focusing on just one organization, but there’s nothing wrong with diversifying, either.

The fact of the matter is that there a lot of issues, and there are a lot of complex problems which need to be solved. And there are a lot of great organizations doing important work.

A good organization has a focused mission and vision, but I think a savvy donor is capable of supporting many issues and causes.

The right balance is different for everyone, of course, but I personally like to have a healthy handful of organizations to engage with personally and financially.

With this approach, it’s important to know your limits – don’t make commitments beyond what you can sustain, for example – but it allows you to delve into a range of issues, while providing space to reflect upon why those issues are important for you, and how you see them as connected.

We’re not trying to solve just one problem here, folks. There is so much work to do.

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