How to Build the Perfect Philanthropy

At this year’s Chicago Ideas Week, heads of the some of the nation’s most innovative giving organizations gathered to share a few of their most revolutionary concepts.

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What’s in a personal donation? Everything, if you’re one of the millions of people who depend on philanthropies to assist with anything from college to housing to healthcare. In fact, of the $300 billion donated to U.S. charities every year, more than 80% comes from individual contributions, says Valerie Lies, president and CEO of Donors Forum, which helps strengthen Illinois nonprofits.

But how can donors and philanthropies ensure everyone is getting the most do-gooder bang for their buck? That’s the question some of the smartest minds in philanthropy—including CrowdRise‘s Edward Norton, United Airlines Foundation’s Sonya Jackson, and LIFT’s Kristen Lodal—tackled at Chicago Ideas Week on Tuesday afternoon, as part of the “Giving: One Matters” talk. Here’s some of the best of what they shared.

1. Follow a clear mission.
“One of the worst things I hear from organizations is, what do you want us to be?” says Jackson, president of the United Airlines Foundation, which funds charitable groups such as the Des Plaines Community Foundation. “But that’s not our role as a funder. We want to advance a mission, not direct it.” In other words, the best philanthropies are the ones that establish a cause and an identity—as opposed to, say, just “trying to be hip,” as Jackson puts it.

2. Democratize your campaign.
“Philanthropy sells itself short if it’s just a bunch of rich people writing checks,” says Jean Case, CEO of the Case Foundation, which shortly after its 1997 founding launched one of the world’s first crowd sourced campaigns, called Make It Your Own. The gist: the Case Foundation offered to fund a select group of everyday “change-makers,” provided their cause could legitimately enhance their community. Within days of announcing the project, the Case Foundation received more than 5,000 submissions; the public then voted for who’d get the funding. Since then, that model has been copied by Chase, Pepsi (with Refresh), and more.

(MORE: The Disrupters–Eight Businesses Reshaping Our World)

3. Foster community.
More than 400,000 low-income high school students graduate qualified to go to four-year colleges—and still don’t go. In an attempt to fix that problem, Michael Carter started Strive for College, a nonprofit organization that pairs those low-income high school students with local college mentors, who help them prepare for higher education. That network, which Carter started while still in college himself, is now blossoming beyond Carter’s wildest hopes. “Strive mentees are now mentors, and even starting Strive chapters at their schools,” he says. “It’s the ultimate paying it forward.”

4. Empower the people you’re helping.
As president and CEO of Care USA, Dr. Helene Gayle, has helped the 70-year-old organization—whose poverty programs aided roughly 122 million people last year—focus less on alleviating poverty through short-term solutions (e.g., giving people money) and more on preventing it through long-term ones (e.g., building schools, involving corporate partners like Walmart to buy produce from poorer villages). “Think of it this way,” says Gayle. “We’ve gone from giving people fish to teaching them how to fish, to assuring that there are fish in the stream.”

5. Be efficient—and have fun!
By allowing anyone to make a page on his CrowdRise giving platform—think Kickstarter for philanthropic causes—co-founder Edward Norton has not only cut costs (overhead is “under 8 cents on the dollars,” he says, as opposed to the philanthropic norm of 20 cents), but given users the opportunity to get creative with fundraising tactics. On her 30th birthday, for example, actress Sophia Bush raised $63,000 for one of her charities through CrowdRise, just by asking her fans (via Twitter and Facebook) for that particular birthday gift. Other crowdfunders have done push-ups, run marathons, and even dressed up in rhino suits. “It’s amazing when people come up with,” says Norton.