The “50/30/20” Rule: A Framework for Fulfilled Giving
📷 credt: Piret Ilver via UnSplash
How do you design a giving strategy that is manageable but effective?
There are virtually unlimited amounts of causes, issues, and areas to give to. Do you care about the arts? Are you focused on the environment? Do you feel especially connected to a particular community of identity? Do you want to give in your local community, or across the country? It’s easy to be overwhelmed and, without taking the proper steps, easy to be unfulfilled in your giving.
If you have resources and are in a position to give, it’s natural to fall into a reflexive giving mentality – giving haphazardly in response to requests as they come in. This often leads to frustration, because it can result in not feeling connected to what you’re supporting. A critical first step toward fulfilled giving is intentionally setting your giving priorities. With so many opportunities and needs, getting too hung up on the “best” or “most needed” funding is a recipe for frustration. While prioritizing by need is critical, it’s also critical for your fulfillment as a donor to focus on the issues that light you up. Finding the issues and organizations that you are going to bring the most to – not just your money, but also your time, energy, intellect, curiosity, and networks – will result in you giving more, giving more effectively, and being more fulfilled in your giving.
Another critical step to philanthropic fulfillment is determining an approach or framework to guide your giving. However, giving strategies and approaches are often more complicated than they need to be, and can lead to overthinking, inefficiencies, and frustration. We recommend a simpler framework – the “50/30/20” rule. This framework will help you both focus your giving to ensure your resources are going to the issues that really light you up – and the freedom and permission to say “yes” and “no” to other giving opportunities as they arise.
50% – Passions and Priorities: This category is for the 1-3 organizations within your priority area that you most believe in and are committed to. For these groups, we encourage you to not only make the large financial commitment, but also the personal commitment to yourself to really engage – consistently reading their weekly newsletters and communications, having conversations with staff and stakeholders, finding ways to give outside of financial vehicles, prioritizing attending their events, and so on. Making this kind of commitment and building it into your practice will naturally facilitate the kind of due diligence you ought to be doing for larger gifts – and, most importantly, will result in you being much more connected and fulfilled in your giving.
30% – Community and Obligations: This category is for ongoing mid-level gifts that are tied to your community and/or your social obligations – gifts to your church, synagogue, or temple, groups you used to be involved in, to the arts organization you love, your alma mater, the programs your children are involved with, the workplace giving drive, etc. We all have a set of institutions we support regularly, and we recommend that you build them into your plans in advance. Remember, these are mid-level gifts, so we encourage you to give yourself permission to make them smaller – and also permission to engage with them in a commensurate way: to do less due diligence than the groups in your 50% bucket, to not read every newsletter and communication, to not attend every event, and so on. In addition, for this level, we encourage you to be proactive: reach out to them early and say, “I’m renewing my gift this year for X amount.” They will appreciate your proactive support – and you’ll be able to politely decline later asks in the year and be free of the pressure of those solicitations and by being able to say honestly, "I already gave."
20% – Heartstrings and Friendships: This category is reserved for impulse giving and is not pre-planned – those gifts for times of crisis, when you go to an event and feel moved, when a friend asks for your support for an upcoming fundraising event, and so on. By budgeting for this category, you will be empowered to give yourself permission to just say “yes” – without the due diligence – and, most importantly, allowing yourself to experience the joy of giving in the moment without fretting about your budget. Setting aside money for gifts that are spontaneous is a critical part of being fulfilled in your giving.
We believe that this framework will not only lead you to be more fulfilled in your giving, but also will enable you to principally act and respond to requests, particularly when saying “no.” By establishing a framework and plan for your giving, you can respond clearly and honestly: “I have a plan for my giving, my main priorities are X, Y, and Z, so this is where the majority of my funds go. However, I think your work is also important, so I will continue to support you at this level.” This kind of response depersonalizes the “no” – and empowers you to say it from a much more grounded and principled place.