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    Posted September 26, 2013 by
    Toronto, Ontario

    Hampton Securities on discipline and the art of donating


    We sat down with the team at Hampton Securities Ltd to discuss corporate giving.  Most people don't stop to consider an overall strategy when it comes to making charitable donations. At Hampton Securities, they took a long hard look at this and then assessed it against their investing philosophy. The results were surprising and opened up a theory on what they like to call ‘disciplined philanthropy.’


    First, a look at some of the many reasons why individuals, families, and companies may choose to donate to a given charity:


    • the wish to make a positive difference
    • the wish to make a corner of the world a better place
    • personal experience with a cause
    • allegiance to a cause
    • peer pressure
    • tax planning
    • to support a friend, family member, or business associate
    • to enhance the image of their business
    • reciprocation to others who have supported them


    Yet this list turned out to feel as random and inefficient as the reasons set out in it. We stopped to ask, if we live our life or run our business successfully through the employment of goals, strategy and process, then why not do that in the realm of charitable giving?


    Why not set this aspect of your finances into your broader financial or life goals?


    Consider clarity and focus in your giving.


    Even in difficult economic times, people continue to make some charitable donations. Canadians have a solid reputation as being ‘good givers.’ Yet in this new economic terrain, one that is rising out of the ashes of the Great Recession and its fallout, there are more causes, charities, organizations, industries and individuals seeking support today than ever before.


    Combine this increased need with a significant decrease in funding agencies, and a significant decrease in disposable income and its resultant sums that get ear-marked for donations, there is a squeeze being felt in the world of altruism.


    So, if we are able to give, then why not help the world and help yourself at the same time? The concept is not difficult to execute, and is beneficial to all.


    The random approach to charitable giving: a twenty dollar bill here and there, the signing of a pledge form, tickets for a charity gala, etc. is never a bad thing. Everyone, however, can greatly benefit from focus and clarity. After all, we don’t use a scattered approach when dealing with our personal finances or investment portfolio. Business and investing success is contingent on discipline and strategy, so why can't your altruistic life be guided by the same principles?


    Disciplined philanthropy is the difference between randomly shelling out money when and as asked, and a true plan for philanthropy.


    The first step is to assess what your purpose is in regards to charitable giving. Then determine what specific causes are suited to you and your family. This assessment will be the foundation to guide you in how, how much and to whom you give. Do you want a plan that will leave behind a legacy, be it large or small? You can do that with some planning and sound strategy.


    Strategic giving actually benefits you and the recipient because it focuses charitable efforts. It can provide a transformation from simple participant in the charitable crowd to full blown philanthropist.


    It’s best to tackle this as you would any other project, with clear goals, researched strategy, and planned tactics. All in all, it’s best to use a solid business approach.


    Establish either the percentage of annual disposable income, or the portion of overall wealth that you wish to donate. Then investigate the best modus operandi: should you set up a trust fund, establish a foundation, or otherwise gather a pool of capital in order to suit your objectives?


    A key benefit to your setting up an annual dispersal of funds is that the beneficiary knows that they have a guaranteed sum of money coming in at a set date. That can help enormously with their planning budget and overall effectiveness.


    This is about making a difference, but on your own terms.


    As with the power of compounded interest, the concentration of charitable giving can render a significant result over time. Plus your monies can make a difference when they are offered with to one or several chosen recipients, rather than anyone who comes knocking at your proverbial door.


    A concentrated allocation may also allow you to have a say in how your money is used. Of course,
    the bigger the sum, the more influence you will have. Disciplined philanthropy can allow you the possibility to have a say in shaping the cause of your choice. It's not uncommon that generous benefactors set guidelines, conditions and even performance targets for their recipients: this is often a condition of their donations.

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