The pandemic has underscored the value of philanthropy. High net worth individuals accounted for more than a quarter of the US$20 billion-plus value of donations awarded globally to COVID-19 causes in 2020, according to the philanthropy-tracking charity, Candid. Billions more were given by individuals directly, through structures or directly, to existing charities.

Scientists have spoken of the “crucial difference” made by such philanthropy in helping to unlock radical new approaches to vaccines and treatments. This was a global crisis in which urgent donations, sought and offered at pace, were critical to success.

Some argue that this more nimble approach to giving should be adopted permanently, discarding much of the red tape that can curb the progress of good causes. It’s a compelling viewpoint – but at the same time, philanthropists naturally want to be sure that their gifts are going to have the greatest possible impact.

Many find that organising their giving in a more structured way delivers better results. However, this approach needn’t rule out the flexibility for swift, one-off donations when the occasion demands. Following five simple steps could help hone your philanthropic strategy.

1. Be guided by your values

There’s an unlimited pool of worthy causes. Even the most beneficent and far-reaching of philanthropists needs a focus: the Bill & Melinda Gates Foundation, for example, prioritises education, poverty and health.

Consider the causes closest to your heart and decide where you want to make a difference. You might decide to involve family in defining what matters most. It’s easy to become sidetracked by the sheer breadth of worthwhile issues; be open to explore all topics, but emphasise the need to be selective. By the end of your discussion, aim to write down a single line that encapsulates your philanthropic mission.

2. Arm yourself with knowledge

Detailed research will pay off in deciding where best to direct your efforts. Besides making a deep dive in your chosen area, you might want to check out open data that is gathered to help improve charitable giving, and published by organisations such as the OECD and 360giving.

Consider which non-profit, government agency and other philanthropists are already working in your chosen field. Look at past and current projects, and weigh up what seems to be working. If possible, speak to charities and agencies and explore their needs. Where are the gaps? Can you create new ventures without duplicating other efforts, or would it be more effective to support existing causes?

3. Set firm objectives

Ask yourself what you want to achieve through your philanthropy. Consider what success will look like, and how long it is likely to take. Be ambitious but realistic: the narrower your focus, the less likelihood of vagueness or ‘mission creep’.

As with your initial value setting, it might help to condense your goal to a short statement that will serve as a reminder in future decision-making.

4. Think beyond donations

Having done thorough research, you may be content simply to direct your money to trustworthy channels. Alternatively, you might want to take a more hands-on role in pursuit of your goals.

What else might you offer besides donations? Do you have specific skills – for instance, in personal contacts, recruitment, or general leadership – that could benefit the work on the ground? If so, define the extent and limits of your personal commitment from the outset.

5. Choose the right vehicle

Once you’ve crystallised your philanthropic ambitions, it’s important to talk through your options with your wealth manager.

Setting up a private foundation is one possible route, given a significant endowment to work with. Creating a brand in this way can raise the profile of your cause, and offers the prospect of a long-term legacy. Creating a foundation is similar in many ways to setting up a business: it’s critical to get the right advice on legal, tax and staffing issues.

A less formal solution, which also allows you to build up more capital before donating, is Donor Advised Funds (DAFs). A DAF allows you to make charitable contributions, receive immediate tax benefits, then recommend grants from the fund to charities. It also allows for anonymity when donating.

And of course, direct donations based on need are always an option. As many involved in the fight against the effects of COVID-19 can testify, there’s a lot to be said in favour of so-called ‘chequebook philanthropy’.

However you choose to consider each aspect of philanthropy, which can be very powerful and help you tap into rich emotions, it is worth a conversation. We can help ensure your generosity doesn’t inadvertently leave you and/or your family financially disadvantaged or generally disappointed by the experience, but instead help you take a more constructive approach that supports those charitable causes close to your heart.