During my discussion with Sybil Ackerman-Munson, a nonprofit professional and founder of Do Your Good, a foundation advisor helping donors give to the nonprofits they care about the most, which got me thinking about my own giving.
What is giving, why is it important, and why should an entrepreneur care?
There are many ways to give back - shop local and support small businesses, adopt a street, volunteer, financial giving, and many others.
I am going to focus on the last one: financial giving.
To breakdown financial giving I am going to make three different giving buckets - these are my own personal buckets and the way I view the financial giver: donor, fundraiser, philanthropist. Let’s break this down…
By definition a donation (excluding healthcare donors here) is something that is given to a charity, especially a sum of money. In short, being a donor is giving a sum of money to a charity, and this includes the entrepreneur's time (time is money!), but there are other types of donations.
A recurring gift is one an entrepreneur may make annually, quarterly or monthly - it simply means there is a recurring sum of money being donated to a nonprofit 501(c)(3).
*note: A 501(c)(3) charitable organization is able to solicit for public donations
An entrepreneur can donate stock. Simply fill out a stock transfer* form from a brokerage and a stock can be transferred to a charity.
*note: the deduction is limited to 30% of the entrepreneur’s adjusted gross income (AGI)
The one-time donation is just that - maybe the entrepreneur is at the grocery store and they ask to round up to the nearest dollar for the local children’s hospital. Saying “yes” makes the entrepreneur a donor. However, it leads to another form of donation: fundraising.
If clerks are inquiring at checkout for a donation, the store is most likely fundraising for a specific cause, and an entrepreneur can be a fundraiser too.
A fundraiser is a person employed to raise funds (as for an institution or political cause). GoFundMe has to be one of the best known fundraising platforms - almost anyone* can start a campaign to raise funds for their respective causes.
*warning: don’t be a jerk and create a fake cause to raise money for personal gain.
Lastly there is philanthropy.
Philanthropy is the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.
Being a philanthropist is a little more in-depth than being a donor. A donor might donate from emotional impulse - the clerk asking to round-up for the local children’s hospital, but a philanthropist aims at the root cause of social issues by establishing long-term approaches.
An endowment is a great example of being a philanthropist, and something I hope I can leave one day.
An endowment is a nonprofit's investable assets, which are used for operations or programs that are consistent with the wishes of the donor(s), and there are 3 types of endowments that I will not get into in this piece.
Here is how I want to be a philanthropist through an endowment: I want to leave an endowment fund, a large sum of money in an interest growing account, to provide free business education in underserved communities.
I am defining underserved communities as those communities with schools with 50% or more of their students on free or reduced lunch. I want the Gabriel Flores Endowment to provide free business education in those communities, and the money in the endowment fund should provide enough funding to self-support the program for decades and that is why an entrepreneur should care.
Becoming a donor, fundraiser or philanthropist helps bring meaning to the entrepreneur's life. I always feel much better about my Mt. Dew and Cheetos purchase after rounding up to the nearest dollar at the cash register, and I feel very confident that if I am able to generate enough wealth, an endowment will help support the mission of The Shades of Entrepreneurship™ for many years.
And that mission is interviewing entrepreneurs to support the future entrepreneur.