There is a great need in the world for philanthropists and those who give back to their communities. Philanthropy helps to support important causes, giving money back to distressed parts of the population. Philanthropists can choose to support large national concerns or local community projects. People who simply donate to a cause are not philanthropists, though their generosity is very much needed in the world. Philanthropists must also make an effort to be involved in the organization they are supporting.
Many entrepreneurs like Prakash Charan make philanthropy a large part of their lives. Charan describes how philanthropy works and offers tips for people who want to start a lifestyle of charitable giving.
Sharing Your Profits
When a philanthropist is successful in their business, they often donate a portion of their profits to charity. Charitable donations are valuable, but they do not go far enough to constitute philanthropy. A philanthropist will also be part of decision-making and strategic planning for the organization in question.
Entrepreneurs who share their profits with deserving organizations should be encouraged. It is a selfless act to give to a charity, especially when an entrepreneur is trying to grow their business. Most often, entrepreneurs who have already achieved a measure of success begin to invest their profits in deserving organizations.
Researching a Charity
Before a philanthropist invests in a charity, they need to do due diligence in examining the charity’s finances and operations. To see how efficient a charitable organization is in terms of using its donations for services rather than paying high executive salaries, you should consult with your state attorney general’s office and with the Better Business Bureau. A charity should be using at least 50 to 60 cents on the dollar to go directly into its programs rather than overhead and expenses. If these organizations are licensed, it does not mean that they have been approved by the state.
It is a good idea to thoroughly research how the organization operates and to examine any problems they may have had in the past. If they have experienced a scandal due to misuse of funds, you will want to make sure that this has been remedied before you give them any more money.
You should have a full understanding of how a charity gives back to the community. For example, the Girl Scouts work directly with children to promote learning and to build a productive community. If your personal ideals conflict with those of the charity, you may want to consider supporting something else instead.
Different Forms of Giving
Philanthropists have several different choices when it comes to how they want to support their designated organization. Lump sum gifts are appreciated, together with targeted grants for specific activities. A monthly donation is often the most useful. Philanthropists can also make provisions in their wills to donate land or buildings to their charity of choice. This can be an important gift well in the future.
Philanthropists do have tax advantages that need to be fully understood. Philanthropists should be aware of how their chosen charity is constructed under tax laws. 501(c)(3)s are the most common type of nonprofit organization. Charitable, educational, scientific, literary, sports, prevention of animal and child cruelty, and religious organizations receive the benefits of tax-exempt organizations. Contributions to these organizations can be deducted from a philanthropist’s federal income tax.
It is smart to check into whether your chosen organization has legal tax-exempt status. For example, charitable donations to other countries are not deductible. This can surprise philanthropists who want to make a difference in another country. As always, before giving money, fully research the tax and financial implications of your gift.
Not Just Money, but Time
Philanthropists can focus their energy mainly on raising funds for a charity, but the true meaning of philanthropy means getting in on the ground floor of an organization and helping it run more efficiently. Many nonprofit organizations have boards of directors, which may be a good venue for philanthropists to help an organization run smoothly.
When a philanthropist invests all of their extra time and money in one organization, they should consider branching out. Different types of nonprofits need more help than others, and choosing an organization is a highly individual decision. For example, if you are already donating to and serving on your local school’s PTA, consider also giving to a scout troop that includes children from the school.
Philanthropy Works for Everyone
When philanthropists like Atkinson Prakash Charan give their time and effort to charitable organizations, they help these organizations by supporting their mission to help the community. Taking philanthropy seriously means taking the time to research the charity and to find out how it runs behind the scenes. Not all charitable organizations are created equal, and there are ways to find out how effective they are within the community.
Prakash Charan wants to encourage all entrepreneurs to consider becoming philanthropists. Philanthropy will enhance the community while giving you the good feeling that you have helped to create a better future.