Is Your Charitable Giving a “Gift” or an “Investment”?

Posted by 15 Oct, 2011

Recently I was speaking with some donors who said they had dropped the word “gift” when referring to the money they give to charities and now only speak about their philanthropy as “investments”.   This made me question:  “Is all charitable giving really an investment?”

With an investment, you expect a return, and you usually expect that return to be better than what you initially invested.  Sometimes the investment does not deliver as well as you expected.  When that happens, we sometimes withdraw from that particular investment or we stay the course and hope it corrects itself over time.  We watch our investments, we take corrective action, and hopefully we also reap positive returns.

A gift is something you give someone that you do not expect any return on.  You do it out of the sheer joy of giving something to someone else to make them happy, to wish them well, to congratulate them.  We do not worry about a gift. Once you have given the gift, you do not watch what happens with it, you do not take any corrective action and you certainly do not expect to see it again.

When you give a donation to a charity, no matter how small your donation, you always expect a charity to make good use of your funds.  Yes, you may give your donation for the sheer joy of giving; however, you probably do think about it from time to time, and in fact may follow up with the charity to see how they actually spent your money and what impact it had.  Sometimes you will find that the charity did not produce the results you had anticipated.  Sometimes  corrective action needs to be taken by the charity to get back on course and sometimes, as a donor, you need to know when to stop giving to a particular charity if indeed they are not fulfilling their mandate, or your expectations. It is very similar to how you make and monitor your investments.  You do expect something in return for your charitable giving, and it can  indeed can be called an “investment”.  I think I will join the converted and replace the word “gift” with” investment”  when I refer to my charitable giving.  How about you?  Share your thoughts with us:

Categories : Terry Smith

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