As an advisor to many philanthropists, I have long-enjoyed a ring-side seat to the rewards of charitable giving.
Unfortunately, I have also watched smart people give away money assuming that since it had charitable purpose, it would be sure to do good, and the thought of questioning it further, to them, was ludicrous. This is similar to the attitude that clients have when they buy art: they simply fall in love with it and don't question the cost.
We all know that the most successful outcomes in traditional investing are the result of hours spent ensuring that one’s investments are well-positioned and earning the appropriate amount of return for the risk taken. To combat this, metrics that measure the impact of philanthropy dollars have become increasingly mainstream and pervasive in the grant-making arena. But after having spent far too many years trying to convince people to give based on metrics alone, I got off of my lofty soap box and took a step back. These days, I remind myself that using my client’s good intentions as a starting point then steering them to more relevant measurement models tends to beget the most impactful results.
Randy Kaufman is Senior Vice President at EMM in New York City. Read the rest of her article here.