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Make a lasting impact: 5 tips for charitable giving

Individuals 10.26.2021 7 MIN

You might be thinking of giving back to your community. Maybe you have a cause you’re already involved with, in which case, good on you! But if you aren’t quite sure what to look for when picking a charity where you can devote your energies, you may need a little guidance. Nicolette Rabadi Jaze, a vice president who focuses on sustainable investing in Goldman Sachs’ Merchant Banking Division shares some tips to get you started.

In her role, Nicolette spends time learning about the neighborhoods where Goldman Sachs is making real estate investments and finding opportunities to participate in locally driven community-building efforts.

Nicolette advocates for giving back locally because you get to really see—and experience—the impact of your dollar. Working with smaller organizations also means you can be more involved. With that in mind, here are her five tips for picking a local charity where you can devote your time and energy. 

#1: Follow your passion

It may seem obvious, but your first step when it comes to giving should be to identify an organization that supports what you’re passionate about.

“Your philanthropic investments should be personally meaningful,” Nicolette says. “Typically, where most people go with this is something that feels really good or with something that looks familiar like a large organization that has widespread marketing campaigns.” These might include areas like education, disaster relief or hunger/food insecurity organizations. But she recommends digging deeper to find out what specifically appeals to you.

For example, take education, which is a very broad cause. Are you passionate about expanding youth literacy programs? Or would you feel good about sponsoring a scholarship for students in a particular community or demographic?

The takeaway here is to narrow in on your passions—either through the cause itself, in a particular location, or finding something you can really get involved with that impacts your daily life.

#2: Don’t be afraid to marry your interests

Given the range of nonprofits out there, Nicolette often recommends doing some online research to find a nonprofit that combines your interests. For example, you may care about animal welfare and supporting individuals suffering from an illness. You might find an organization that takes shelter animals to patients at a local hospital for therapy visits.

“We often think about social issues in defined buckets, but many times, the root cause of some issues leads back to multiple underlying factors,” says Nicolette. “Supporting organizations that tackle several issues at once could amplify the impact of each dollar you give.”

She also notes supporting causes you care about at the advocacy and policy level can have a real, lasting impact.

#3: Do some homework on the organization and look at its actual impact

Once you’ve identified an organization that you’re passionate about, you should research the nonprofit’s management team, board of directors and operating budget. 

According to Nicolette, “It’s important to understand how the organization is run, who is making the big decisions and how much they spend on actual programming versus administrative costs.” In other words: are they using their dollars efficiently to address their mission?

Thankfully, this type of information is readily available for 501(c)(3)s nonprofits, through their publically reported financials. In most cases, you can find it on their website. 

There are also sites like Charity Navigator and GuideStar, which make the financial research relatively easy.1 These sites can give you a quick snapshot of a nonprofit’s financials and can tell you how effective an organization is at achieving its mission relative to how much money it spends.. 

Something to keep in mind when looking at an organization’s financials: nonprofits do need to pay their employees and (literally) keep the lights on. So while some organizations might appear to have an expensive operating budget, take a look instead at their overall effectiveness. 

“Costs might be higher but impact might be greater,” explains Nicolette. “For example, a New York City-based nonprofit will likely have costly rent and overhead expenses to maintain a physical presence in the areas where their programs are delivered or their clients are served.” 

You can also do a recent news search on the nonprofit you’ve identified. Search around and see what, if anything, pops up. 

On the hyperlocal level, Nicolette suggests doing more hands-on research. Request to go on a site observation, or talk to a board or staff member. These interactions can give you real perspective on the impact the organization is making.

#4: Consider how involved you want to be with your chosen organization

This is one of Nicolette’s key pieces of advice when it comes to supporting local charities. Presumably you want to donate because you can afford to and you care about getting involved with a specific cause. If you’d like your involvement to go beyond writing a check, figure out what kind of access your gift grants you.

With big nonprofits, realistically your donation is going to be one of many among hundreds of millions of dollars.

On the other hand, a donation of the same size at a smaller, local nonprofit may give you access to events and volunteer opportunities with people in your community who share your passion for the cause. In Nicolette’s words, “Giving a larger amount to a small organization is going to give you more visibility and access to that organization. And more opportunity for you to have other kinds of impact.” 

For what it’s worth: you don’t have to be involved beyond donating, and all nonprofits still need, and appreciate gifts of any amount. But if you’re the social or roll-up-your-sleeves type, it’s great to get the additional opportunity to give back.

#5: Maximize your donation

While this point is admittedly not about choosing a charity, think about your involvement with a nonprofit organization as an investment. “Smart investors will tend to look for creative ways and tools available to advocate and maximize the impacts of their investments,” says Nicolette. 

With charitable donations, taking advantage of your employer match, if offered, should be a no-brainer. More than 18 million individuals work for companies that offer matching gift programs and 65% of the Fortune 500 offer those programs.2

However, an estimated $4 to $7 billion of the funds earmarked for a match go unused each year, so there’s a lot of room for potential impact here.2 Find out if your company offers this perk, and if they don’t, you can always ask if they’d consider it.

There are also ways to regularly donate. Many nonprofits allow you to enroll in monthly or recurring donations and some might offer payroll deductions—but keep in mind, your company has to allow that, too. 

However you decide to give and whatever organization you choose, make sure it’s personal. “If you want every dollar to make an impact, honing in on the aspects that are meaningful to you is where you’re going to get the most out of your donation,” advises Nicolette.

1Any link to an Internet site sponsored and maintained by a third party is provided solely as a convenience to you, and does not constitute an endorsement, authorization, sponsorship, or affiliation by Goldman Sachs or Ayco. Neither Ayco nor Goldman Sachs has reviewed or tested any information, software, or products found on the site, and therefore makes no representations regarding the content or sponsors of the site or the suitability or appropriateness of the products or transactions described therein.