The fine art of charitable giving

Steve Merrell |

Giving effectively to charity is one of the most rewarding aspects of learning how to manage wealth. It is also an area full of pitfalls. If you are thinking about starting a charitable giving program, try to get your financial advisor involved early in the process. She can help you avoid many of the frustrations and mistakes that hamper some charitable giving efforts. In addition, your financial advisor can help you do the careful due diligence that should precede your charitable giving.


Before you start giving, you need to ask yourself what you are trying to accomplish. The more clearly you define your intent, the better your overall experience will be. Carefully consider what you are most passionate about.  Monterey County is blessed with a large number of excellent nonprofit organizations that do a wonderful job strengthening our communities. You are sure to find a few that align closely with your values and concerns. If you need help identifying possible targets, talk to the folks at the Community Foundation for Monterey County. They can be a great resource as you try to find the right match for your charitable giving.


After you have identified a list of possible candidates, you need to do some due diligence. Not every organization is worthy of your support, even if their stated goals align with yours. Take some time to understand how well they execute on their vision.


You can get a sense of the quality of a nonprofit organization’s management by reviewing the actual programs and services they provide. How do they measure success? How successful have they been? Are they aligned with the mission of the organization? Are they realistic given the organization’s capacity? An organization pursuing programs and spending scarce resources on activities that are not fully aligned with their core mission may not be the organization you want to support with your giving.


You should review the organization’s strategic plan. Do they seem to have a realistic and workable plan for the future? Do they really understand the issues as you understand them?

Does the organization have a sustainable financial foundation? Even the most worthy nonprofits cannot succeed without the resources they need to fulfill their mission. Ask about their fundraising strategy and goals. Do their goals seem realistic given their past performance? How have they raised funds in the past? What are their plans for the future?


Along with the organization’s financials, take time to understand its investment policy. A well-run organization will have clearly articulated financial policies, including procedures for ensuring proper oversight of their invested funds and a sustainable spending policy. If an organization is too small to have these capabilities in-house, they will sometimes turn to larger nonprofits for help, such as the Community Foundation.  Ask about their investment performance and the amount of risk they take in their portfolio.


Another resource for your due diligence is the board of directors. Talk to board members to find out how committed they are to being good stewards over donor funds. Find out if the board members are actively supporting the organization with their own charitable giving.


Finally, there are other resources such as the websites and  These websites gather due diligence information and provide financial and other information for many charities around the country, including here in Monterey County.




Steven C. Merrell  MBA, CFP®, AIF® is a Partner at Monterey Private Wealth, Inc., an independent wealth management firm in Monterey.   He welcomes questions you may have concerning investments, taxes, retirement, or estate planning.  Send your questions to: Steve Merrell, 2340 Garden Road Suite 202, Monterey, CA  93940 or email them to