How can I build a strategy for my donor journey?

Get started by asking yourself a few key questions about your goals and your resources:

• Are there any short-term or long-term goals that you have already identified?
• Do you already know how much, or what, you feel able to give?
• Would a one-off donation be enough, or do you have other assets available you could use?
• How much involvement and how much use of your time would be compatible to the other things happening in your life?
• Is there anything specific you would like to receive in return and are there any milestones you would like the charities to reach?
• How are you going to evaluate the success of your giving?

You’ll also need to do your homework. Scan the landscape to find out what is already happening in the areas you have identified. It might also help to spot missed opportunities.

Some donors find it useful to visit the 360 Giving, or the Giving is Great, websites which provide information about what other funders have been giving their money to, and what their goals have been. You can use this information to scan specific areas of interest or amounts of money that others have given and what it has been used for, and this might help you identify areas you may find of interest.

Reading charity accounts can also be a useful way to find about their work. The Charity Commission offers a searchable database that can help narrow down the field. Click here to see their advanced search.

It can help to have a structure to manage your giving rather than just using your regular bank account. It allows you to plan and manage your charitable funds. It helps you to make sure you can claim the tax incentives available for you and the charities you support. You can also benefit from professional advice.

A giving structure, of course, also requires ongoing administration, so you’ll need to assess if you’re committed enough, and you’re going to give enough, to make it worthwhile.

However, some philanthropists do choose to design a tailored structure to facilitate their giving:

1. Donor Advised Funds (DAFs). DAFs are a simple structure designed for donors who want the benefits of a structure, but don’t have a lot of time or resource for administration. Instead of setting up your own structure, you have a fund held and managed by a DAF provider on your behalf. They provide the administration and due diligence on the charities you want to support. They also make sure that you, and the charities you support, get the tax benefits. As the name suggests, even though you are transferring your charitable funds to them, as a provider, they manage your gifts according to your wishes. There are several DAF providers which you can read about here. 
    
2. Charitable Trust. If you are planning to give away a very large amount of money (in the millions) then it’s worth talking to your legal advisers about setting up a charitable trust. A charitable trust is a charitable entity that has the legal responsibility to use its resources for the public benefit. It is governed by its trustees and has administrative requirements. Charitable trusts offer a high level of control to the trustees and can be very useful for wealth owning families who want a formal structure to manage giving by the family. 
    
3. Setting up a charity. If there is a particular issue you want to address, and no one else is addressing it, then you might consider setting up a charity specifically for that purpose. Charities are regulated in the UK and you will need to set up the charity and register it with the Charity Commission.
    
   Click here to find out more about designing and building a tailored charitable trust or charity to help you give more effectively
    
4. Investing for impact. Over the last decade, the charity sector and the investment management sector have developed a range of different investment approaches that mean you can deploy funds that have a social purpose for a financial return. Charities may seek zero-interest loans that give them working capital. At the end of the term, you get your money back. They have not generated a profit, but they have given you “return of capital”. This is called social investment. If you are seeking an investment strategy that offers “return of capital” then you’ll need to find an investment firm that offers impact investments. Impact investments are made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Click here to find out more about investing for impact.

Now you have reviewed the landscape and considered the structure and approach you want to use, you are ready to deploy your gifts or investments. As a strategic donor, you might want to put in place a simple agreement with the charities you support setting out your expectations. Do you want to receive any follow-up information from the charity? Do you want to be named, or remain anonymous? Are there any milestones you are expecting to be reached?

Don’t be surprised if there is a minimum gift size for such agreements to be made. £10,000 is often the threshold.

If you are restricting your gift to a particular activity, or if you want tailored information or evaluation, then the gift will need to be considerably larger as the organisation will have to divert some of its resources to provide this information. Remember, unrestricted gifts allow charities to operate freely and to maximise the amount of resource they can use to focus on the issues that are central to their mission.

Evaluation can be tricky. There aren’t any universal measurements for impact that make it possible to compare different approaches, but many charities will keep track of the number of interventions they have made which provides an indicator of their reach. Usually, they can provide case studies too which explain how their work makes a difference.

These may be reported in their annual report or on their website.

If you are a major donor, charities will usually try to keep in touch to provide updates and information. In fact, the best way to monitor the effect of your gift is to build a relationship with the charity so that you are in their information flow.

For very large gifts, it may be possible to arrange an annual review or to seek responses to specific evaluation questions. However, this should be agreed in advance and, as the donor, you need to make sure you have provided enough funding to enable the charity to provide this tailored reporting.

Keep in mind that charities sometimes face setbacks. By building a good relationship with the charity, it is more likely that they will keep you fully informed when things don’t go according to plan. This is part of the learning journey of being a philanthropist.