THE LONG VIEW

Dambisa Moyo

For philanthropists , maximizing impact begins with a thoughtful examination of their goals , motivations and guiding principles .

T THIS TIME OF YEAR , MANY PEOPLE PAUSE TO REFLECT ON the true meaning of philanthropy , asking themselves : What is the best way to give ? To whom should I give ? And , perhaps most importantly , why should I give ?

Fifteen years ago , I published Dead Aid : Why Aid Is Not Working and How There Is a Better Way for Africa . I argued that government-to-government aid , rather than fueling economic growth , inadvertently harms the very countries it is meant to help . Since then , philanthropists have often sought my advice about their desire to grapple with seemingly intractable challenges , such as extreme poverty or climate change .

In the year-end season of giving , donors should ask themselves 12 key questions when considering how , where and why to give . The first question is relatively straightforward : What motivates you ? Are you looking to spread joy — for example , by supporting the arts — or alleviate suffering by aiding communities affected by war or natural disasters ? Both approaches are vital and commendable .

Second , how can you use your time and financial resources effectively ? In a world of competing needs , it ’ s not just how much we give but how we do it that ultimately determines our ability to effect positive change . For example , consider a philanthropist with $ 100 million to donate . While allocating the entire amount to improving education could result in better-resourced schools , students might still struggle to attend due to poor health , inadequate transportation or malnutrition .

Recognizing this , the philanthropist might choose to divide the $ 100 million

What motivates you ? Are you looking to spread joy — for example , by supporting the arts — or alleviate suffering by aiding communities affected by war or natural disasters ? among initiatives supporting education , health , food and transportation . Yet splitting the funds equally — allocating $ 25 million to each cause — will inevitably dilute the impact . Such an approach might be enough to prevent conditions from getting worse , but it is unlikely to drive transformative change .

The third question to consider is whether to delegate decision-making to an established organization or create your own philanthropic foundation . Both strategies come with trade-offs . Delegating enables you to harness the skills and expertise of teams with proven track records , but there is always a risk that the organization you support will fail to achieve its goals — or worse , exacerbate the problem .

Building and managing an organization gives you the freedom to pursue your personal goals and vision . But over time , this entity ’ s culture , norms and bureaucratic processes can diverge — and even conflict — with its founding mission . As employees become focused on advancing their own careers , the problem the organization was created to address may become a justification for its existence rather than something to be resolved .

Fourth , what is your time frame ? Do you expect immediate results , or are you willing to wait for years , perhaps even decades ? After all , philanthropy can lay the groundwork for breakthroughs that donors may never live to see .

Fifth , what kind of impact do you

JANUARY / FEBRUARY 2025 | FINANCIAL ADVISOR MAGAZINE | 25