“I have found that among its other benefits, giving liberates the soul of the giver.” – Dr. Maya Angelou.
If you’ve been considering joining or starting an philanthropy club with your family, friends, or fellow HBCU alumni but are unsure if it’s the right move, you’ve come to the right place. The answer is it is absolutely the right move.
A few facts regarding African American organizations and nonprofits:
- Budgets of Black-led organizations are 24% smaller than white-led organizations.
- Black-led organizations have 76% less unrestricted assets than their white-led counterparts.
- Most Black-led nonprofits operate on less than $500,000 — nearly 1/3 have annual budgets of just $30,000.
- 43.5% of Black-led nonprofits operate without any paid, full-time employees, and 45.7% have no paid, part-time employees.
Philanthropy clubs can be a powerful tool for leveraging African American philanthropy from like-minded individuals. They not only enhance your financial literacy and knowledge about African American and African Diaspora organizations but also empower you to make informed philanthropic decisions. By pooling your resources with your family, you can collectively grow your impact African American nonprofits finances and outreach, fostering a sense of confidence and control over institutional development and empowerment.
Keep reading as we discuss why you might want to start an investment club and the steps you’ll need to take.
Why You’ll Want to Start a Philanthropy Club?
One of the biggest reasons to start an philanthropy club is that they want to learn and share ideas with people who share their values. It makes sense to start a philanthropy club with family, friends, or HBCU alumni because, most of the time, your values are well-aligned. Yes, you may have different opinions, but your values are generally on the same page.
Philanthropy clubs can be a great way to learn about African American causes, organizations, and nonprofits. Because some members may be more seasoned donors, givers, or active in the nonprofit space, they can share their knowledge on certain topics.
Philanthropy clubs are a great way to magnify small donations by each member into a large donation by a focused collective. the increase the impact associated with investing. However, with the rise in so many commission-free brokers, the fees for making a high volume of trades aren’t as big of a deal.
How to Start an Investment Club
If you’re ready to get your philanthropy club with family, friends, or HBCU alumni off the ground, you’ll want to follow these steps to ensure success:
1. Find and Organize Members
Finding members for a philanthropy club is generally one of the most challenging steps. However, it’s a little easier if you’re looking to start one with your family, friends, or HBCU alumni. Either way, ensuring the fit is correct before jumping in is crucial.
A solid philanthropy club should have at least 5 people but no more than 15 or 20. You must have enough ideas, but too many can make things more difficult. Each person will be required to identify a cause, organization, or nonprofit. Then, each month, a different member will present their cause, organization, or nonprofit to the group.
Before extending an invitation to different anyone, ask yourself a few questions. These will help you see if it will be a good fit.
- Do you trust the person you’re thinking of inviting to be consistent and involved?
- Will they bring research and ideas to the meetings?
- Are they organized?
- Are they going to pay the monthly donation on time?
2. Determine Your Goals
Once you have your members set, you must agree on your goals. Most clubs’ goals will be making donations and learning from others. But how are you going to get to that point?
It’s important to take some time to understand each member’s philanthropic approach. Are they willing to take on more risk or prefer to be more conservative? Do you want to stick with only well known organizations, or are members interested in startup organizations as well? Do they only want to give to domestic organizations? Or are they willing to give to African Diaspora nonprofits working in Haiti, Jamaica, UK, or Africa?
Developing a plan of attack and ensuring that each member is on the same page will be vital to success.
3. Decide How You Want To Give
Deciding on if you want to setup a legal structure for your philanthropy club is important because potentially over time, your club can setup an endowment that invest donors money and that can grow into a significant and sustainable amount of money. Having the necessary legal protections is going to be important. If your philanthropy club decides to actually invest its donations into investments that will grow over time so that the club has larger and more sustainable sums to give is important to think about.
The other option is to simply give everyone the option to donate on their own once the cause, organization, or nonprofit is decided upon. This route relies on the honor system or some type of peer accountability towards giving.
Each philanthropy club must do what works best for them and also realize that the club is allowed to evolve over time.
The Bottom Line
Philanthropy clubs are a great way to pool your donor funds and learn from other members. Just be sure that you join a group where everyone is willing to listen to ideas and pull their own weight within the club.
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