Is Focused or Broad Giving Better?

Community-Directed Stories Number One

Thank you to everyone who submitted questions and voted on our first edition of “Community-Directed Stories.” (If you missed the introduction, find it here.) With a majority, you and your fellow CFGV supporters voted that we answer the question:

Is it better to donate smaller amounts to many nonprofits or focus larger giving on just a couple?

The way you approach charitable giving is highly personal and driven by both emotions and data. Your method may be very different from your neighbor’s, and that’s a good thing. “All types of giving are important,” noted CFGV executive director Lauren Kugler. The Gunnison Valley is a relatively small place, and every ounce of generosity has an impact on the health of our shared community, regardless of the size of the gift. Rather than advising you on a specific approach with this post, we want to give you some food for thought based on conversations we’ve had and research we’ve done.

Anne Hausler has been engaged with CFGV for the organization’s entire lifespan and has long had a donor advised fund (DAF) at CFGV. We sat down with Anne to get some insight into how she makes her decisions about focused vs. broad support. She introduced some new factors to consider in making your decisions. At the end of the day, caring about the cause is paramount and so is trusting the organization to use your money effectively. Beyond that, there are other things to think about that often come down to timing in your own life and the context of the community around you.

“If there is an urgent, community-wide need, something like COVID, it probably makes sense to put all your eggs in that one giving basket for a time and trust that the organizations will all get through it,” Anne observed. When that crisis struck our community, people connected to the Gunnison Valley gave generously to the COVID-19 Recovery Fund at CFGV (featured in this CB News article from 2021) and grants were made from that fund to support urgent community needs at that time. Because people gave so generously, CFGV was able to channel nearly $500,000 worth of grants to local organizations, allowing our nonprofit sector to maintain and expand services, growing to meet new needs that arose. Likewise, Anne noted there may be times when you want to make a larger than normal gift as a memorial or celebration of a particular individual who has had a meaningful impact on your life. CFGV manages several funds celebrating the impact of community members including two set up to honor long-time CFGV staff members who retired: the Creative Community Fund (Honoring Maryo Gard Ewell) and the Pamela G. Montgomery Nonprofit Leadership Fund.

Anne shared that one of her favorite roles as a donor is to serve as either a catalyst or a closer when an organization is launching a new project. If recognition or the opportunity to help shape decisions is important to you, making a larger gift often comes with the chance to be more involved. Anne cautioned that it’s important to consider if you’re in a phase in your life that you want both the opportunity and the responsibility of serving on a board or helping make decisions about an organization’s path. If you want to make an impact, but don’t want that responsibility right now, spreading your giving more broadly may be a better fit for you.

Anne also pointed out that if you want to do both (make a larger gift to a single organization but still spread your gift more broadly around the community), a gift to support Community Grants through CFGV’s Grant fund allows you to do just that. CFGV’s grant committee thoroughly vets the organizations participating in the annual competitive grants cycle and ensures that you’re having a significant impact across a broad range of organizations addressing a variety of community needs.

Anne provided some great local insight from a donor’s perspective. For a more national perspective, we consulted with both Google Gemini and Claude. Both recommended an approach where you focus giving on a few organizations and then incorporate additional gifts in response to urgent needs.

Gemini said:

Focusing larger amounts on a few nonprofits is generally considered more effective. Consolidating funds maximizes your impact by helping organizations achieve economies of scale and significantly reduces the administrative and transaction fees that eat up smaller gifts… If you are trying to decide which route works best for your budget and values, it can be highly effective to choose 1-3 primary charities to fund deeply while maintaining a small budget for emergency relief appeals or grassroots organizations.

Meanwhile, Claude (which offered the disclaimer that it’s not a financial advisor and you should consult one) had this to say:

There’s a real case for each approach, and most giving philosophy lands somewhere on a spectrum rather than at either extreme… A lot of experienced donors land on a hybrid: a couple of “anchor” organizations that get the bulk of the giving and the relationship-building, plus smaller, more opportunistic gifts to other causes as they come up. That gets you the depth-of-impact benefits without giving up flexibility entirely.

As we wrote in the introduction, whether you’re making a few large gifts or many small ones, every single gift makes a tangible difference in supporting the Gunnison Valley. Lauren agreed with Anne’s recommendation to use different approaches during different phases in your life. “For a lot of people, it’s dynamic,” Lauren said. There may be times in your life that you want to make a larger gift to a single organization and other times you want to spread your support broadly across the community.

She also shared that people often ask CFGV which organizations have a new or exciting project or initiative underway or which organizations are working in a particular area of need, like food security or childcare. If you’re curious about where you can have an impact locally on a cause that’s important to you, sitting down with Lauren or Ashley Upchurch, CFGV’s new Director of Philanthropy, can help you think through your giving both strategically and holistically.

Reflecting on her time as Development Director of the Crested Butte Land Trust, Ashley observed that another great way to think about spreading your giving around the community is through automated monthly giving. A small monthly gift, even of $5, adds up over the course of the year and really helps nonprofits as they budget. Both Lauren and Ashley noted that even if you don’t set up an online monthly gift, it can help an organization with their budgeting if you let them know that you plan to support them annually and at what level. It’s even better if you can give them a heads up about roughly when you’ll send the check every year.

Lauren also noted that there are many ways to give to local nonprofits and they’re all valuable. Every point made about financial gifts made to local nonprofits applies to gifts of your time as a volunteer or board member. In such a small, interconnected community, this is truly a place where each of us can have an impact.

This was such a great first question for our community-directed stories. It gave us the opportunity to have some interesting conversations with knowledgeable community members and learn a little bit more about the alchemy of the nonprofit sector in the Gunnison Valley. We are always accepting submissions for future community-directed stories via this Google Form and look forward to seeing what question you want us to answer next.

If this post has you thinking about how you can approach your giving more strategically, please reach out. Your CFGV team is always excited to sit down and talk through your charitable goals and the impact and legacy you want to have on the Gunnison Valley.

The team at CFGV is honored to serve as a resource and sounding board as you build your charitable plans and pursue your philanthropic objectives for making a difference in the community. This blog post is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice. Please consult your tax or legal advisor to learn how this information might apply to your own situation.