The month of December is a great time of the year… ’tis is the Giving Season!

I remember visiting a billionaire in his office about this time last year. I was there to try and get him interested in giving to one of two building projects (one was for a $AU90,000,000 medical research institute in Tasmania; the other one was for a $AU80,000,000 medical research institute in New South Wales). The foundation that I was working for at the time had contributed millions to both projects, as had the federal government and the respective state governments, as well as the grantees themselves. On behalf of the grantees and my employer, I was “on the road” visiting high net-worth Australians to solicit major gifts to help complete each of the capital campaigns so that construction of the new buildings could begin.

After some pleasant conversation, I gave a brief presentation on each of the projects – how much they would cost, how much had already been raised, the significant needs that each project would address, as well as the potential benefits to humanity, and so on.

I had met this man on a number of occasions. He is a wonderful guy – well-respected, with a reputation as a “giver.”

He told me that while both projects looked worthwhile, “all of his money was tied up.”

I told him that “I understood” and wrapped the meeting up shortly thereafter.

While I was disappointed, I wasn’t upset. After all, it’s his money and he should do with it exactly what he wants.

Upon reflection, I thought “Of course his money is tied up! He’s a billionaire. It’s invested – in operating companies, real estate, the stock market, and so on. He doesn’t have it in his desk drawer!”

Having worked for a major international philanthropic foundation, I knew well the protocols of having quarterly grant budgets, and quarterly cash-flow projections to meet our pledges. And the related complexities of converting assets to cash on a timely basis so that we met our grant commitments. But somehow I had not translated that knowledge to the other side of the desk. It was a valuable lesson, and it well illustrates one of the key differences between being a grantmaker and being a fundraiser.

Now, whenever I sit down with a high net-worth person or would-be philanthropist, I try to ask this question early on: “What is your annual planned giving budget?” Or something similar…

The answer will tell me a number of things, but the most important thing is that it will give me an indication as to whether I am talking to a planned giver or a non-planned giver (or someone in-between). In reality, there is a continuum, and it is often based on a number of factors including years of experience in giving, amount available to give, and one’s zeal for giving.

If I am talking to a planned giver, the conversation will likely progress though a number of topics that include the quantum (budgeted amount) of annual giving, the type of projects she/he is attracted to (or at least an overview of past projects or grants), how giving requests are analysed and vetted, what projects are under consideration at present, etc.

With a planned giver, I know two key things right up front: 1. They have an annual giving budget, and 2. They systematically prepare to convert their assets into cash to meet this planned budget. In other words, they give regularly, and they have systems and procedures in place to make it happen.

If the person does not have an annual giving budget, or talks about “a gift I made a few years ago,” they probably are not a planned giver – not in the way that I define it – with an annual budget, cash-flow forecasts to insure assets are liquid at the appropriate time, etc.

Now please don’t get me wrong – everyone has to start somewhere and the occasional giver or opportunistic giver may very well turn into a planned giver at some point down the road. And they are definitely not a non-giver. But it is a very different starting point and I’m glad that I learned this lesson.

So what does this have to do with you? Because whether you’re a battler or a billionaire, it still boils down to the same two key things: What amount am I going to give away this year (your planned annual giving budget) and when am I going to give it away (your cash giving budget)?

Hopefully, you’ve read the Metrics section of this website. If not, check it out. It outlines four levels of annual giving (the platinum standard, the gold standard, the silver standard, the bronze standard), all based on giving away up to 1% (one percent) of your net assets each year. They are guidelines for planned, annual, sustainable giving.

We budget for our mortgage, our vacations, our retirement. If you are a planned giver, you also budget for your giving.
How else will you know what amount is available to give? And how else will you insure that the cash funds are available when you need to make the gift?

Of course, there are many other questions and challenges involved in the giving process. What will I give to? How can I be sure I am giving to the right cause? How can I be sure they will spend my gift wisely? All good questions.

I will cover many of these questions in future blogs. But if you are serious about regular giving, think about becoming a planned giver (If you are already a planned giver, Bravo!). Start by asking yourself one question: How much do I intend to give away this fiscal year? Then, make sure that you have the appropriate amount of cash on hand when you need it. It’s not the only place to start, but it’s a good one!