When it comes to financial investments, diversification is crucial to reducing risk. The opposite is true for philanthropic investments, says Stephen Samuelian. It is not uncommon for charities, non-profits and NGO’s to be founded by dedicated and well-intentioned people who have experienced a life event that has motivated them to make a difference. These good-hearted individuals may have little prior business or operational experience. They may lack the disciplines, processes, controls and strategies that make organizations and businesses successful, notes Stephen Samuelian. He advises those individuals contemplating a year-end gift or grant to a charity to do their due diligence, as they would with any other investment.
According to Stephen Samuelian, informed donors generally don’t respond to the first organization that calls for help. They take the time to identify which causes are most important to them and they are specific about the change they want to bring to their communities or to the world at large. They look for a charity with competent management, a clear vision and mission, a solid program, policies and procedures, financial and operational controls, etc. Wise donors do not drop money into canisters at the checkout counter. This is an easy way for scam artists to take advantage of one’s goodwill, reveals Stephen Samuelian. It is usually advisable to limit donations to groups with granted tax-exempt status under section 501(c) (3) of the Internal Revenue Code.
If you’ve really taken the time to identify an efficiently-run charity that is involved in a cause that you are passionate about, you should feel confident in giving a monetary donation. Support your favorite charity for the long haul, says Stephen Samuelian. Become a partner in the charity’s efforts to bring about change, because only with long-term, committed supporters can a charity remain successful long-term.