Lasting Investments: Six Qualities of a Strong Giving Portfolio

Imagine what could happen if we put as much intentionality into our giving portfolios as we put into our investment portfolios.

It is indisputable that an investment portfolio matters. As people who strive to be wise stewards, we want to make wise decisions and live out Proverbs 3:9a: “Honor the Lord with your wealth.” We put extreme care into choosing who will manage our investments. We sign off on a plan. We refine it over time. We pay attention when a friend seems to be getting higher returns from a different plan. We are diligent because it matters. Of course it does.

What if we also applied that same skill and attention to our giving?

I talk with many families who are hoping to do just that. In our conversations, I find the term “giving portfolio” to be extremely helpful because we are talking about something more significant than a list of donations. These are not just quick one-off contributions, gifts given spontaneously at a gala or because of pressure from a friend. A giving portfolio is a carefully curated group of organizations and opportunities where you strategically invest your philanthropic resources for significant impact.

Based on what I have learned from inspiring families around me and decades of helping to steward philanthropic gifts, here are six qualities of a strong giving portfolio:

1. Aligned Values

Your giving portfolio needs to reflect what matters most to you.

Your giving values have probably been shaped by your personal experiences and background, by your family, by donations that have been meaningful to you, and by previous giving opportunities that have left you feeling unfulfilled. We learn from every giving experience, and it helps to shape a set of values to define what is important to you moving forward.

If your giving portfolio is part of family giving, it should reflect what is important across all the family members who will be engaged in the philanthropic decision-making. Determining those values can be a very spirited conversation, but I also find it to be extremely unifying to wrestle through the options and agree together on a set of values.

2. Defined Goals

To establish a good strategy for your investment portfolio, you define your short-term and long-term goals. This is equally vital with your giving.

Here are some questions I find helpful when establishing generosity goals:

• What issues or needs do you hope to impact over the next few years?
• What do you want your long-term giving legacy to be?
• How much money do you want to give away?
• What type of impact do you want to see?
• What level of engagement do you want with the organizations you support?
• How do you want to involve others around you in your giving?

I appreciate the wisdom of the Scottish-American industrialist and philanthropist, Andrew Carnegie, who said that deep joy comes when you “set a goal that commands your thoughts, liberates your energy and inspires your hopes.”

3. Diversified Investments

A strong giving portfolio balances donations across different types of causes and organizations. Just as a diversified investment portfolio can help to mitigate risk and balance tax strategies, a balanced giving portfolio can help to ensure that you avoid pitfalls, meet your goals, and establish right-sized expectations for the organizations you feel compelled to support.

When I hear about a frustrating experience between a donor and an organization, it is often based on missed expectations. By having a broad array of opportunities, you can identify the appropriately-sized investment for each organization based on its capacity and avoid placing too much expectation on one place.

4. Active Management

Establishing a rhythm of investment portfolio reviews is a crucial step. You don’t want to be overly engaged in such a way that you don’t have enough time to see results, but you also don’t want to let too much time go by without knowing if you are headed in the direction you want.

In the same way, it is essential to have a rhythm of reassessing and rebalancing your giving portfolio. I have found this is helpful to do with my clients on an annual basis. A recent study of high-net-worth families* showed that the majority (79.6%) of wealthy donors do not monitor or evaluate the impact of their charitable giving, and the majority (54.2%) are not sure whether their own gifts are achieving impact. Reviewing your giving portfolio and the impact of your giving allows you to have confidence that you are stewarding your generosity well and making wise contributions.

5. Long-term Viability

Your giving portfolio has long-term viability if your impact can sustain and grow over an extended period of time. You can evaluate this by looking at the impact that will happen over the long-haul, the sustainability of organizations and initiatives that are funded, and the ripple effects that are possible through your gift. You can also work on long-term viability by passing on the value of giving to the next generation. Will your work carry on after you are gone? Will there be ripples that last well beyond your years?

6. The Joy Test

I find that the “joy test” is the best way to determine if there is an area that can be improved in someone’s giving portfolio. If you are not experiencing joy or satisfaction in your giving, please don’t settle. It is too important, and the lack of joy suggests an opportunity to dive in, ask questions, and look at ways to make it better. It is such a blessing to be able to bless others, and to do it in a thoughtful and strategic way can multiply the joy!

I consider it a joy to have these conversations with families. My prayer is that the resources that you invest in your giving portfolio will fill your heart and shape your legacy for generations to come.

*2023 Bank of America Study of Philanthropy in collaboration with the Indiana University Lilly Family School of Philanthropy https://scholarworks.indianapolis.iu.edu/server/api/core/bitstreams/2fd1581e-c1a0-43de-a174-a3080d019fc2/content