Book review: “Give Smart”

Every once in a while a book review jumps into the posting schedule because I have to give it back to the library tomorrow.  I can’t extend the loan because lots of other readers have reserved it.

“Give $mart” must be a popular book.  It’s only been out for a few months, but it’s already jumpstarted our thinking. Maybe it’ll jumpstart yours.

I didn’t grow up around charity. I didn’t appreciate my church’s corporate philanthropy or our school activities, and I left those behind when I joined the military.

When I was on active duty, I didn’t make an effort to volunteer or donate. Sure, I’d contribute to the Combined Federal Campaign some years. Most of our charitable activities were done on command workdays or could be tied into a family time as a good parenting example. Our Girl Scout troop would spend a few hours at a shelter, or we’d do a beach cleanup. My daughter and I spent six months of weekends volunteering as dog walkers at our local Humane Society. But our volunteering and charitable giving occurred more by convenience or coincidence, not by plan.

Once I retired, though, some of the pieces started falling into place: we found a few local causes that we cared about, and we realized that we had room in our budget. The Internet makes it much easier to research a charitable organization anonymously, and Fidelity’s Charitable Gift Fund makes it much easier to donate anonymously. Today we can give to the causes we care about on our own schedule, and we hardly get any junk mail at all. I really appreciate being able to quietly pursue my interests without being pestered by unsolicited appeals.

I began reading about philanthropy. The research was less than impressive.

Many of the books were historical or biographical. They’d recount how Carnegie or Rockefeller or Ford developed their philanthropy. They’d analyze how other 20th-century families were torn apart by sudden wealth or generational affluenza and eventually figured out a charity plan. Some books were more descriptive: They’d tell you how to give of your time & money (donations, charitable gift funds, trusts, volunteering) or talk about things to watch out for.

Some advice sounded like a typical business book: form a family group, discuss what’s important to you, develop a written philanthropic mission & vision statement, hold occasional meetings to decide how you’re going to donate. Have the family office organize a workshop to teach the young ‘uns how to contribute to charitable causes. “Mission & vision statements”? Seriously?!? Their recommendations made the whole subject seem a lot like having a job!

A few of these books mentioned websites and blogs, so I started reading online.  I finally stumbled across Give $mart.

The authors came together from the business world and academia. Both spent their careers improving the management performance of for-profit and non-profit corporations. They served on boards of non-profits and found themselves improving those operations, too. Eventually they formed the Bridgespan Group, which works with hundreds of non-profits to improve their management and their infrastructure. All non-profits have services and back-office tasks that they have to execute just like real businesses: fundraising, dispensing funds, accounting, and preparing tax returns. Bridgespan improves that daily routine, of course, and then helps the non-profits focus on their mission.

But the authors also worked with philanthropists, and they noted that their foundations had their own “business challenges”. The difference was that philanthropists really didn’t know how they were doing because they had few tools to measure their performance. Businesses, however, have a lot of measuring tools. Corporations like Wal-Mart will quickly disappear if they don’t sell things to customers. Non-profit organizations will also quickly disappear if they can’t raise donations from the public or get grants from foundations. But foundations don’t really have to survive, because they’re supposed to give money away. They approve those grants and then get glowing reports from their grantees (who would be happy to accept more grants, of course). They’re courted by all walks of society & government to help fund other programs, too, and nobody is ever going to tell a blissfully ignorant philanthropist that their support staff is doing a crappy job.  They’re not going to tell the philanthropists that they could do better, either.

It turns out that there’s a demand for better philanthropy from the philanthropists themselves. Entrepreneurs and business executives are accustomed to performance tools and expect to see the same in their foundations. Computers and the Internet have revolutionized business and made a lot of tech execs rich, and now these same people are using the same tools to improve their philanthropy. Better still, the tools & techniques used by billionaires are now available to us little guys who want to do a better job with our pennies.

The authors focus on six areas:

    • What are my values & beliefs?
    • What will I call “success” and how will I achieve it?
    • What am I accountable for? Do I meet my self-imposed standards?
    • What will it take to get the job done?
    • How do I work with grantees?
    • Am I getting better?

Each of the book’s chapters describes one area, with plenty of sea stories examples. The authors run their non-profit group like a business, of course, and they’ve done hundreds of philanthropy case studies. They know plenty of ways to fool ourselves and to get into trouble. The solutions aren’t always very easy, but they explain how to look for the warning signs.

I noticed the parallels between pursuing financial independence and then pursuing philanthropy. You’re doing the first for yourself (and your family) while you’re doing the second for society (and maybe your family again). By the time you’ve achieved financial independence, you know all about aligning your values & beliefs with your spending. “Success” is clearly defined, and you learn very quickly to hold yourself accountable for your own behavior. By the time you reach your goal you know exactly what you need. Now it’s a matter of figuring out how to pass on your skills and measuring your own success as a mentor.

You don’t have to be a billionaire to form a foundation, but you don’t even have to start a foundation to be a philanthropist. You just have to volunteer your time or your money.

The back of the book contains another self-assessment checklist that summarizes all the areas. You could literally copy those five pages to monitor your own philanthropy progress. You could do it the same way that you monitor your budget and your investment portfolio. Like a physical-fitness test, the checklist will help you figure out if you’re doing the good deeds you intended– or if you’re just fooling yourself.

From my own experiences I’ve learned that I can’t just enjoy an afternoon at a food bank or a shelter, get a karma boost, and come home feeling good about myself. Instead I analyze the process, I try to improve efficiency or speed, and I eventually turn it into a job. I also tend to take on too many time commitments or meetings, although I’ve learned to cope with them. Maybe I’ll change that as I get older, or maybe I’ll never be very happy about working in an organization.

But I really enjoy doing philanthropy on my own. I enjoy screening charities with Internet tools. I actually like looking at their reports and their tax returns to see if they’re doing well. I’m interested in whether they can grow their “business” or whether their grants & donations dry up. I like seeing them in action or reading about them in the media. Now with “Get $mart” I can do a better job of analyzing my performance.

Philanthropy gave me the opportunity to write this book. “The Military Guide” donates all royalties to charities. Those charities were chosen by the servicemembers & veterans who contributed their stories & advice to the book, but we researched the candidates before we chose them. A couple actually had bad reputations with the people they were allegedly supporting, and one organization’s CEO had a suspiciously large salary. But Wounded Warrior Project and Fisher House were judged to be doing good work for the military, they had good ratings from charity-ranking websites, and they met our standards. Our own expenses are very low (“starving author” low), and I think we’ve done a good job of picking the right charities. We’re targeting as much support as we can with as few organizations as we need, and we’ll keep ramping up the funding as we get more revenue from the book and the blog!

Read the Give $mart blog, track down the hardcopy at your local library, and enjoy the stories as you ponder your own philanthropy. As you achieve your own financial independence, you’ll need this book.

Related articles:
Book report: Dilemmas of Family Wealth
Charitable gift funds
More military charities for “The Military Guide” royalties
Sales results for “The Military Guide”

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About Doug Nordman

Author of "The Military Guide to Financial Independence and Retirement" and co-author of "Raising Your Money-Savvy Family For Next Generation Financial Independence."
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