Strategic vs. Checkbook Philanthropy

Matthew Gorelik - Strategic vs. Checkbook Philanthropy

Originally published on MatthewGorelik.info

Philanthropy is a broad term. It encompasses multiple different aspects of giving and many methods in which to do so. Because of the term’s overarching nature, there’s a common misconception that all philanthropic efforts are equal. This is not true.

The field of philanthropy can be broken down into several different subcategories, each with its own definition and purpose. Social discussions have done an excellent job of differentiating corporate philanthropy from its counterparts, but it has been less accommodating when discussing specific initiatives and charitable methods. Specifically, it has been remiss in distinguishing between strategic philanthropy and checkbook philanthropy.

Strategic Philanthropy

This particular branch of philanthropy is highly quantitative. Participants engaging in strategic philanthropy often conduct significant amounts of research before determining where and how to allocate funds. They choose a goal, distinguish success indicators, and document progress. The entire process is extremely measurable.

Because of its quantitative qualities, this particular concept is popular amongst corporate philanthropists. It provides companies with actual data that they can then broadcast to employees, consumers, and investors.

Similarly, strategic philanthropy can be an attractive concept to modern donors as it allows them to gauge their own personal impact on a specific cause. Measurable evidence of “doing good” is desirable in a society that feeds on results and gratification. We can take strategic philanthropy one step farther and apply it to personal goals. Assessing factors like “what worked well” and “how satisfied were you with your contribution,” helps individuals to better plan for their future philanthropic endeavors. It stands to reason that the more satisfied a philanthropist is with their efforts, the more likely they are to continue to engage.

Checkbook Philanthropy

Unlike strategic philanthropy, checkbook philanthropy requires very little thought or effort. Extremely common amongst the general public, checkbook philanthropy is the term that applies to any donation that requires little foresight or follow-up on either part. Direct mail funding requests, seasonal collection tins, and school fundraisers often fall into this category.

This branch of philanthropy is often criticized for its lack of data on direct impact and the ad hoc feeling about giving that it seems to establish. Often the donation amounts are relatively small, making it hard to identify exactly what your specific funds were used towards.

Also, checkbook philanthropy fails to create a connection between the donor and the cause. There tends to be very little emotional investment associated with these donations which makes it difficult for the requesting charity or foundation to build relationships and solicit repeat engagement.

That being said, both strategic and checkbook philanthropies are great ways to get involved in the field. Start with whichever method you have the time and funding for. You can always switch avenues, and there is certainly no rule saying that you can’t try both.

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Understanding Real Estate Terms Part Two: M-Z

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Originally published on MatthewGorelik.io

Welcome to this month’s continuation of Understanding Real Estate Terms. We covered A-L in August with Part One. Now it’s time for Part Two!

Real Estate terms can be confusing, especially when you’re knee-deep in a process you are unsure of. Use this glossary any time you stumble across a term you don’t recognize!

Multiple Listing Services (MLS) – This is a special database available only to real estate agents and brokers. Industry professionals have the opportunity to submit listings and information to the database, effectively allowing them to search and compare listings beyond the scope of their own practice.

Points – The concept of points can be somewhat tricky. At it’s most basic, it is a fee paid to the lender in an effort to reduce the interest rate on your mortgage. The fee is equal to 1 percent of the total amount of the loan.

PITI  – An acronym that stands for Principle, Interest, Taxes, and Insurance. Together, these items make up the primary costs associated with most mortgage payments.

Preapproved – Preapproval is only obtained after a lender conducts an in-depth review of the borrower’s financial background. It is only obtained after completing a thorough application, paying the required fees for processing, and submitting any documentation requested by the lender. If the application is approved, the buyer receives a “conditional commitment” from the lender for a particular loan amount. It does not guarantee that the loan will be issued.

Prequalified  – Prequalification is the process of having a lender or specialist determine how much a particular buyer can afford to borrow. It is not an in-depth review and it does not guarantee that a loan will be granted. It merely serves as a starting point for the buyer to realistically assess property.

Private Mortgage Insurance (PMI) – This is a type of insurance for the lender. It serves to protect them in the event that the encounter a loss on the money they have lent (if a borrower defaults on their loan, for example). Lenders require this insurance be purchased on any conventional loan without a 20 percent down payment.

Rate Lock – An agreement between the lender and the borrower that states a specific interest rate and a predetermined length of time. The specified interest rate will be guaranteed for the indicated length of time, meaning it can not increase or decrease as market rates do.

Title Insurance – An insurance policy designed to pay out if the the property title defects or is subject to other title complications after the closing has been completed. Depending on the situation, it may be paid to the lender or the buyer.

Under Contract – Under Contract is a term given to any for-sale property that has accepted an offer, but not yet closed or met contingency requirements.

Millennials and Philanthropy

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Originally published on MatthewGorelik.info

Millennials are changing everything. That seems to be the consensus amongst the generations that came before them. What’s up for debate, however, is whether the impact of these changes is ultimately positive or negative.

Now, I’m not well-versed in all of the millennial initiatives, nor do I wish to comment on any of the more controversial topics. What I do know about, and consequently what I’d like to discuss, is the millennial impact on philanthropy. This generation is almost certainly the catalyst for several positive transformations on the horizon. Here’s why.

Corporate Philanthropy

If there’s one thing we know about millennials thus far, it’s that they love to support a cause. It’s a concept that’s simple enough, and it’s one that they’ve carried with them across traditional philanthropic boundaries. It is no longer enough to be charitable on one’s own time. Now, many millennials are actively seeking career opportunities that allow them to make a difference.

Fortunately, many of them also realize that it is impossible for 100% of people to obtain a position saving the world. To help compensate for this fact, millennials have developed a special kind of brand consciousness. They are researching their future employers to determine profit allocation and demanding to know company stances on critical social issues.

Companies everywhere are responding in turn. They are developing and documenting corporate strategies and initiatives that address philanthropic topics. They are exhibiting a brand new level of transparency in an effort to attract millennial employees and consumers alike.

Philanthropic Ability

The number of millennials in the workforce is going to increase. In fact, “Millennials will be the largest demographic in the American workforce by 2020.” Why is this important? Essentially it is going to shift the income status quo.

An already socially conscious generation is going to have the opportunity to step into positions vacated by retirees. These positions (ideally) come with better pay, better benefits, and an entirely new level of stability for a population in desperate want of just that. Experts predict that, as the generation finds their footing, they are likely to contribute to the causes they care about.

The Case Foundation’s Millennial Impact Report claims that “In 2014, 84 percent of millennial employees gave to charity and 70 percent of them donated more than an hour to a charitable cause.” These percentages are uniquely high considering the low wages and student loan debt plaguing these individuals. We can only expect that as their wages increase and their debt dwindles, contribution and volunteering percentages will rise.

THE FOUR BEST WAYS TO RAISE CAPITAL FOR SMALL BUSINESSES

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First published on MatthewGorelik.co

Starting a business from the ground up can be difficult, to say the least. Website costs, advertisement fees, legal fees and even rent are just a few of the myriad of potential starting costs involved with building a start-up from scratch. Regardless of what kind of enterprise you are looking to start, without a decent amount of capital to draw from, fundraising will be one of the first major steps in getting your company off the ground. Raising the necessary capital to get your small business up and running is essential. Luckily; however, with today’s technology, there are a few more options at the prospective business owner’s disposal than ever before. Additionally, the tried and true methods are always solid options, especially if one is not particularly experienced in using the Internet. With that, here are four good options to raise capital for a small business in the 21st Century.

Personal Savings

Perhaps among the most common and certainly most obvious, a reasonable amount of one’s own savings is always a great source of startup capital. Investors, while they are backing a company, they are also investing in the person who they feel they can trust and, frankly, whom they respect. Devoting one’s personal finances to his or her business venture is always something that will catch the eyes of potential investors because it clearly demonstrates one’s commitment.

Loan

Loans from banks or other investment firms are great sources of capital for your small business. Depending on your credit profile and the collateral you can offer, small-business loans can sometimes offer great deals and incentives. When attempting to earn an investment of a decent amount from any source, it is imperative that you either practice and perfect your sales pitch (selling yourself, your brand and your idea) or find someone who is good at this and can do it for you.

Crowdfunding

Most people have heard of Kickstarter, but there are many other reputable platforms for Crowdfunding that you should look into. Take a look at this list.

Cryptocurrency

Many entities, ranging from startup companies to small-scale inventors, are starting to issue new cryptocurrency tokens that are tied to a specific product or venture. Investors can simply buy a certain amount of these tokens and watch their value increase or decrease accordingly. This way, investors can see their return on investment immediately and in real-time.