Five mistakes not to make if you want to give well

The team at Koda Capital share their tips on not just how to give, but how to do it properly 

You only have to look back over the past few months to see that in times of crisis, philanthropy is invaluable.

The philanthropic community has stepped up to assist with the catastrophic summer bushfires and the outbreak of coronavirus, which has wreaked financial havoc for struggling charities faced with increased demand for services. 

According to David Knowles, the head of Koda Capital’s philanthropic and social capital team, even though the philanthropic dollar will never be as significant as the government dollar, the power of philanthropy is something that should not be ignored. 

“It can have so much more power if donors give that dollar without too many conditions and they trust the charities to do the right thing with the dollar,” he tells Pro Bono News. 

“So much more can be achieved with that dollar than what might be achieved with a government grant that comes with many, many restrictions and conditions.” 

But, there is a right and a wrong way to do it. 

Back in 2018, Koda Capital compiled a list of five mistakes philanthropists should avoid if they want to give well. 

Knowles says given the current economic and social crisis that Australia and the rest of the globe is faced with, they had made the decision to officially publish a guide now to help donors give away their money in the right way.  

“There’s never been a more potent time in Australia for people to show that support for the community and the environment, because we’ve got major challenges in both areas,” he says. 

“It’s only going to be if the community pulls together and we fund charities to do that work, that we can hope to move forward in a very positive way.”

So if you’ve been thinking about how to make a contribution but aren’t quite sure where to start, take a look below at the five mistakes Knowles says you shouldn’t make as a philanthropist.   

Sunscreen philanthropy

It’s important to remember you can’t actually fix everything. There are simply not enough philanthropic dollars in the world to fix all the social and environmental problems. 

So as with sunscreen, it’s best not to spread yourself too thin, because if you do, it won’t actually work. Instead, focus on what you really care about and what you can realistically achieve and then try a few ways of doing it. 

Knowles says it’s alright to make mistakes while you are testing things out, see it as a trial and error exercise rather than getting it wrong. It is also an idea to reach out to other like-minded philanthropists through collective giving groups such as The Funding Network who can help you achieve your goals.  

Teenage philanthropy – assuming you know everything 

Think you know how to fix the problems everyone else has failed to solve? According to Knowles, that’s probably not true, it just means you have a “teenage philanthropy” attitude.  

This means you come to the table thinking you know all you need to know and even try to inflict preconceived ideas on people who need your funding. 

Knowles says that if he were to pick out two of the biggest teenage philanthropy crimes, they would be selecting charities on the basis of their overhead ratios and attaching too many conditions to your funding. 

Just because a charity spends more than another charity on administration, it doesn’t mean they aren’t doing good work, and by attaching too many conditions to your funding you create the risk of undue interference.  

Instead, be open-minded, ask the charity what it needs from you and do your research before making assumptions. 

Zombie philanthropy – not thinking things through

Good philanthropic decision making is all about balancing your feelings. Emotion and trust do play an important role in who you give to and how, but you don’t want it to eclipse critical thinking. You also don’t want to switch off the thought process entirely. 

Instead, Knowles suggests asking yourself some easy questions to get the ball rolling:

• What do I really care about? 
• How can I add value? 
• Am I giving or investing? 
• Do I want to be the fence at the top of the cliff or the ambulance at the bottom?
• Will intentions be matched by ability?

While these questions are “deceptively” simple, he explains that this thinking will help develop your own giving philosophy, which will guide your philanthropic practice for years to come.   

You can see the result of this kind of thinking in guidelines published by The English Family Foundation, which detail how the family uses the concept of “depth and span” when making decisions about who to support.

Cryptic philanthropy – not being clear with those you support 

Being completely open and transparent can leave you feeling a little exposed, but ultimately if you are going to be fair to those trying to win your funding, it’s your only option.  

Knowles says that too many funders leave charities guessing about their real aims, priorities and intentions, resulting in disappointment and a waste of time and effort. 

So before getting started, ask yourself if you see yourself as a once-off funder or if your funding is conditional on particular outcomes being achieved. 

He also says being clear about what your attitude to risk is is important because it will make it easier for charities to know which funding opportunity to present. In his words, why leave them guessing? 

He suggests having a look at Glasspockets, an initiative that encourages foundations to be more open in their communications, or the RE Ross Trust for an example of a foundation trying to be clear about its approach to giving.

Drone philanthropy – don’t get personally involved 

Drone philanthropy is what Knowles calls solving someone else’s problem from a distance by remote control. He says not only is this approach “potentially dangerous and misguided”, as a funder, it will almost always leave you feeling disconnected and disappointed. 

“We want to encourage people to get more involved and to learn about the causes that they support and to experience it rather than just putting a credit card number into a laptop or sending off a form,” he says. 

As a donor, you need to feel like you’re getting something out of it whether it’s a sense of satisfaction or a feeling that you’ve made a difference. 

Instead, he suggests “getting your hands dirty” by volunteering, visiting or meeting real people to get the most out of your experience and connecting with the cause on a personal level. 

He also recommends thinking beyond yourself. If you have kids, involve them in your philanthropy as early as possible. 

“It can turn out to be a real investment in them, your family unit and the society they are going to be a part of,” he says. 

Read the original list here. 

This article was updated on 11 June, to correct David Knowles’ job title from the head of Koda Capital to the head of Koda Capital’s philanthropic and social capital team.