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Balancing Your Portfolio of Giving | Generosity Gameplan

Sep 8, 2014 at 9:44 AM

Pareto principle in generosity and philanthropyI encourage clients to think of their charitable giving and volunteering as a portfolio they need to balance and diversify, similar to a financial portfolio.

You can look at the range of sectors—social, financial, political, environmental, educational, medical, religious, and cultural—and check in with your heart as to which areas you want to be active in. Some of your headline issues (the causes that you are most passionate about) may overlap, allowing you to address more than one sector through one organization.

In your portfolio, you will probably have charities that just have to receive your support because of your position in your family or your community. But once your heart’s desire is clear and you are focused, the heart-led part of your portfolio will hold the most significance.

Think of the Pareto principle of 80/20. Spend 80 percent of your currencies on the 20 percent of organizations and issues that are most important to you, and 20 percent on the remainder.

One of our clients is a car dealer who is very generous and responds to almost every request: the high school band, the hospital, the YMCA, and many others. He feels like he must respond to be a good citizen and also so that the goodwill transfers positively to his business.

After creating his Generosity Gameplan, it was clear that he and his wife were deeply committed to kids with special needs. As they evaluated their portfolio of charitable gifts and volunteering, this heart’s desire was only getting 20 percent of their generosity, while all other causes were receiving 80 percent.

Over three years, he flipped this formula. He promoted his interest for kids with special needs, making it clear to the community and signaling that all other causes would still receive support but at more modest levels in deference to this clarity.

Do you need to rebalance your giving portfolio? You can learn more about how to identify and prioritize your headline issues in my book, Connected for Good.

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