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From "irrational exuberance" to sound, principled giving
by Gordon Loux

Fed Chairman Alan Greenspan isn't throwing around the term "irrational exuberance" like he once was during the heady days of never-ending stock market growth.

Still, in our work with donors, we see plenty of irrational behavior when it comes to the ways some of them give away their resources. And while exuberance is fine, we have found that other factors must come into play. Two of these factors include:

- core values: What is it you believe about the world, humanity and spiritual issues? And which programs match your values?

- passion: What is it that you care passionately about, and who else out there shares your commitment?

These two items are critical in helping you decide a sound, principled approach to your giving. If you have not addressed how these factors affect you giving, the tendency is to give to any cause that asks you for help or become so frustrated that you may even stop giving all together.

And there are plenty of opportunities for this to happen each and every day. With over 700,000 charitable organizations in America, you probably receive a large amount of requests each week.

Most of the larger organizations spend tons of money on advertising and marketing to sway your attention and checkbook to their program. Many also hire consultants who tell them how they can get to you and your money.

But who helps the donor in this environment, where the odds are traditionally stacked in favor of fundraisers?

It was to address this unequal balance that I created The Gordon Loux Co. (TGLC) seven years ago. This wasn't the first organization I have created. In the 1970s, I helped Charles Colson found Prison Fellowship, which has since grown to an international organization serving over 100 countries.

Here at TGLC, we don't work for charitable organizations. Rather, we work exclusively for givers as a "donor advocate."

In recent years, we've found that there's a new generation of people who believe that God has entrusted them with significant resources, and they want to make sure they're spent well.

They appreciate having an advocate on their side who can help them sort through the hype and hoopla in order to give in ways that are deliberate and effective. Many men and women are no longer willing to give just to give. They want their giving to produce results.

Many of these donors have venture-capitalist mindsets. They're looking for a sense of participation. They're looking for return on their investment dollar. They want to be heard and listened to, and if an organization is not meeting their needs, they're going to go where those needs will be met.

It's helping people like this that give us both challenges and excitement.

The challenges come from dealing with some of the inherent limitations of the nonprofit world, which changes at a slower pace than the technology industries. But the excitement comes from helping people identify their giving and then find a "match" with a charity that is doing the kinds of things they care about.

It's very easy to become caught up in the emotional aspect of one's giving. Seeing the lives changed as a result of your participation may be one critical component to your giving. But it should not be the only driving force with your giving decisions.

Principled giving also takes rational decision making ability as well. In order for you to maximize your giving potential, you should also look at your decisions with a dose of common sense. Will my gift be used wisely? Is the organization fiscally responsible? Is this the best use of my philanthropic dollars? And many others.

We have found that ultimate satisfaction in giving comes from understanding as much about what makes you tick and then applying that to your philanthropy. By developing a giving strategy to connect your heart with your head, you can begin to experience fulfilled giving, instead of irrational exuberance.

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