Does philanthropy have a role in a wealth management strategy? One of the biggest misconceptions about wealth management is that it is solely focused on the accumulation of more capital.
However, for most people, wealth management is about making sure they have sufficient resources for their family and the causes they care most about. Philanthropy should be a part of every wealth management discussion, and not just for the tax breaks. If you want to give back to your community, you need a solid plan to make sure your donations are making the biggest impact possible. You also need to make sure you know how much you can afford to give.
Oxygen Masks on Airplanes
When adults fly on an airline for their first time, many are shocked at the instructions given in the pre-flight announcements. The flight attendants tell them that in the event of an emergency where oxygen masks are needed, they should first secure their mask before helping any children, or anyone having any difficulty. This instruction isn’t cruel. It’s calculated to give everyone on board the best chance at survival. Imagine if you were trying to help someone else get their oxygen mask on before you had taken care of yourself. You might pass out from lack of oxygen, and both you and the person you were trying to help are worse off than if you had followed directions.
Philanthropy is much the same. Taking care of your financial security first puts you in a better position to help those who are less fortunate. Wealth management is not just about securing your assets—it is about putting yourself in a position to help others.
True philanthropy is about more than money. It is about making a difference. You want to make sure your money is being put to work in ways that solve problems, not just ease symptoms that will crop back up when the money is gone. One of the best investments you can make making sure your philanthropy is part of an objective-oriented giving strategy. The Bill and Melinda Gates Foundation is one of the best examples of this strategy. The foundation invests in evidence-based solutions to the problems of poverty, disease, and lack of education all over the world. This foundation isn’t simply throwing money around. It is analyzing the most effective ways to use its resources. In the recent past, this has included buying tens of thousands of inexpensive mosquito nets to prevent the spread of malaria.
Effective philanthropy often isn’t flashy. It requires the same discipline that building a successful business does. You have to understand the root cause of a problem and work to solve that problem using creative, evidence-based approaches. When you have a solid wealth management strategy that includes philanthropic vehicles, you will find that you have more time and money to help those you care most about.
Strategic philanthropy is a way of leveraging your donations to have more of an impact with those that most need your help. OmniStar can help you achieve your philanthropic goals. Talk to an Advisor today.