The Essentials of Philanthropy: Passion, Purpose, and Action

The desire to give back and help others is one of our most ennobling instincts. The satisfaction of seeing our efforts make a tangible difference is one of our greatest rewards. If you are beginning to explore philanthropy, or if you are reassessing your ongoing efforts, the question you may be asking yourself is what you need to get from having a desire to making a difference.

It’s tempting to jump directly into the complexities of philanthropy, such as the numerous worthy causes, the many styles of giving, and the wide range of financial structures for sustaining your efforts. Our advice is to step back momentarily and consider the three essential foundations for any philanthropic effort: passion, purpose, and action.

Essential #1: Passion is Fuel

Philanthropy is a commitment of money, time, and effort. Without passion, even the best-intentioned efforts may be unsustainable. What motivates you? What is your inspiration? What do you want to dedicate yourself, your family, and your resources to achieving?

For some families, the answer is evident from the outset. They may have a history of giving or have deeply shared beliefs that lend themselves to philanthropic works. Other families may need to explore the possibilities. Finding your passion may require reflection, discussion, and prioritizing among the various prospects. Here are three questions to help spark the conversations:

What do you want your family to be known for?

The family names Mayo, Pew, and Guggenheim have become synonymous with philanthropic efforts. If you could choose a single, powerful legacy to be associated with your family name, what would it be? Set aside logistics for the moment and allow yourself to be visionary.

Can you inspire multigenerational passion?

There are financial structures that may sustain multigenerational efforts. But what about multigenerational passion? Drawing younger and rising generations into family philanthropy may mean listening to them and being open to new ideas and potential paths that you may not have considered on your own.

Are you hands-on, person-to-person, or big-picture?

How you want to pursue your vision may be just as much a part of your passion as the causes you choose. For example, does your vision for fighting homelessness include swinging a hammer on a building site, working one-on-one with families, or organizing logistics? Build your approach around your vision.

Essential #2: Purpose is Direction

Passion is about vision and inspiration. Purpose narrows your focus by defining a tangible objective for your passion. For example, ending world hunger may be your passion. But your immediate purpose in service of that passion may be feeding people in the community, funding sustainable farming in the Third World, or raising awareness to inspire action.

The more precise your purpose and the more grounded it is by insight, the more likely you will find success and satisfaction. Purpose is ongoing and can be redefined, expanded, or refocused within your passion as your efforts evolve. Be ready to do some investigating by:

Engage with people already pursuing related philanthropy.

Seek out the benefit of their experience, including their thoughts on philanthropy in general and the specific challenges and opportunities in the areas you want to explore.

Talking to volunteers on the ground.

Talk to people doing frontline work. What have they discovered? What do they see as needs or gaps in ongoing efforts? Ask them what people on the outside don’t understand or may find surprising.

Digging into the research.

This may be a compelling way to involve the rising generation. Ask them to read research into the issues published by foundations, academics, and other sources. Ask them to help identify needs and opportunities.

Essential # 3: Action is Getting There

Action turns the fuel of passion and the direction of purpose into the first steps of the journey. Action may include the logistics of how you intend to pursue your efforts, the financial structures you may create to sustain them, or how you plan to measure success.

In other words, action is where the journey can get complicated. As with any journey, GPS can keep you moving in the right direction. Consider creating a mission statement as your GPS.

A mission statement that captures your passion, defines your purpose, and maps out the action is more than a valuable exercise. It’s a critical tool for creating clarity. You can (and should) develop mission statements for any public foundation you establish to pursue your philanthropy. Still, you can also start closer to home by crafting a family statement that can get everyone aligned.

Lido Advisors, LLC is an SEC-registered investment adviser. Please note that SEC registration does not denote any particular competence or ability and no inference to the contrary should be made. For complete information on the services we provide and our fees, please review our Form ADV at adviserinfo.sec.gov, call (310) 278-8232, or mail us at 1875 Century Park East Suite 950, Los Angeles, CA 90067.

The information contained herein reflects Lido’s views as of the date of this newsletter. Such views are subject to change at any time without notice due to changes in market or economic conditions and may not necessarily come to pass. Lido has obtained the information provided herein from various third-party sources believed to be reliable but such information is not guaranteed. Any forward-looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. Lido is not responsible for the consequences of any decisions or actions taken as a result of information provided in this newsletter and does not warrant or guarantee the accuracy or completeness of this information.

Past performance is not indicative of future performance. The information in this report is for informational purposes only and should not be relied upon as the basis of an investment or liquidation decision. Nothing in this report shall be construed to be a solicitation to buy or offer to sell any security, product or service to any non-U.S. investor, nor shall any such security, product or service be solicited, offered or sold in any jurisdiction where such activity would be contrary to the securities laws or other local laws and regulations or would subject Lido to any registration requirement within such jurisdiction. All content herein has been obtained from sources deemed to be reliable, but is subject to unintentional errors, omissions and changes without notice, and is not warranted as to its accuracy or completeness. You should not rely on the information contained herein, and should rely solely on, and carefully read, the appropriate offering and related subscription materials relating to any specific investment product before making any investment decision.

Not all investments are suitable for all clients. It should not be assumed that any security listed or any recommendations made in the future will be profitable or without loss, including risk of loss of principal, or will equal any prior performance. All investments involve the risk of potential investment losses including the potential risk of loss of principal as well as the potential for investment gain. Further, the prior performance figures indicated herein represent portfolio performance for only a short time period and may not be indicative of the returns or volatility each portfolio will generate over a long time period. The performance of the portfolios should also be viewed in the context of the broad market and general economic conditions prevailing during the periods covered by the performance information. Any references to future returns/risk are not promises of the actual return the client portfolio may achieve. Before investing, investors should seek financial advice regarding the appropriateness of investing in any securities of investment strategies discussed. Not all investments are suitable for all investors.

The information herein is not legal, such as trust or estate planning, advice, or tax advice. Any such information is provided for illustrative purposes only and must not be relied upon without the benefit of the advice of your lawyer and/or tax professional. Lido specifically disclaims any liability from any reliance on such information. Lido is not a legal service provider or tax professional and does not offer legal or tax advice. Should you desire to obtain tax or legal services or advice, you must enter into your own, independent engagement agreement with a licensed attorney or tax professional.

Lido specifically disclaims any and all liability arising from the information or illustrations presented in these materials and is not responsible for the consequences of any decisions or actions taken as a result.

Lido Insights