All Posts Tagged: Aristotle
This blog post is part of a year-long series that examines key concepts in our glossary of philanthropy services terms.
In 360 B.C., the Greek philosopher Aristotle wrote of the distinction between simply giving away money and giving it away as part of a thoughtful process.
In Aristotle’s words, whereas anyone can do the former approach, this latter approach to giving is “rare, praiseworthy and noble.” Now, thousands of years later, I couldn’t agree with Aristotle more, but with one caveat … This “noble” and “praiseworthy” approach does not have to be rare.
Rather, what we call strategic philanthropy helps anyone take their check writing to a new level; all it takes is a kind heart. Indeed, unlike traditional, more haphazard approaches to charitable giving, strategic philanthropy involves establishing milestones and metrics for impact goals, and also heavily relies on specialists to determine the best way to use available resources (such as tax-efficient assets) in combination with the right charitable vehicles and structures.Transforming a traditional approach
One of the main benefits of strategic philanthropy is its integration with an individual’s or family’s overall wealth planning strategy. This 360-degree approach helps clients boost their impact by combining the “purpose” behind their philanthropic activities with the careful deployment of capital in all aspects and areas of their lives. Additionally, by carefully assessing progress and results, strategic philanthropy enables individuals and families to measure their ongoing charitable impact, as well as set defined aims for their future impact.
For example, let’s say a family has decided that they wish to devote as much of their philanthropic dollars as possible to funding entrepreneurship opportunities for individuals in developing countries. Using a traditional approach, the family would work with investment professionals to carefully plan the family’s own investments. Then, the family would decide on an amount to donate to a non-profit organization, with little or no knowledge of the donation’s long-term effects and no plans to donate again until it “feels right” to do so.
By contrast, strategic philanthropy is based on the understanding that giving and wealth planning are not two separate processes; rather, they are both part of an individual’s or family’s careful deployment of capital. Using this approach, the same family would work with professionals to plan out their investment and charitable giving goals, to decide the most appropriate and efficient ways of deploying that respective capital, and finally to measure how well they achieved their investment and charitable goals (and plan for future goals). That way, if there is a shortcoming in the attainment of either goal, individuals and families can work with specialists to “right the course” sooner rather than later.Bringing reason and emotion together
So, if this idea of carefully planned and carried out philanthropic giving is as old as the Ancient Greeks, then why isn’t it something that everyone does? I believe that, much like the division between left brain and right brain, people tend to associate investing with reason and philanthropy with emotions. We give, whether it’s a dollar to a stranger or one million dollars to a favorite charity, because it feels good to help others in need and to support the charities that mean most to us. However, in reality, maximizing the impact of one’s giving requires the dual reason- and emotion-based approach that we call strategic philanthropy. Sure, we should give because it feels good, but we should also use our intellect and the skills of specialists to make sure that every dollar we give is creating the biggest positive change that it can.
Further, although the basic concept dates back for millennia, modern-day strategic philanthropy is to its roots what the modern-day Olympics is to the ancient Olympic games. Simply put, Aristotle could not have foreseen the complex investment and charitable giving vehicles that we have today. For that reason, even as we evoke strategic philanthropy’s classical beginnings, we at Bank of the West know that to do 21st-century strategic philanthropy right requires specialists who are well-versed in both traditional and cutting-edge charitable vehicles and structures.
In this way, it’s not only a 360-degree approach that involves taking into account every aspect of clients’ lives, but also an approach that looks both at the present impact of one’s giving and forward into the future. I think Aristotle would be proud.
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