THE BLOG
12/06/2013 09:07 am ET | Updated Feb 05, 2014

Four Simple Tips to Maximize Your ROI When Giving Back

"Giving Tuesday" has come and gone but if you are like me, you still may not have finished making all of your charitable giving decisions for the year. If so, then perhaps on this occasion procrastination has served you well since I recently got some great advice from friend and colleague Jason Saul -- one of the world's leading experts on measuring social outcomes. His advice to picking charities is more like picking an investment portfolio -- go with your head not just your heart. Yes, you still want to do good. But shouldn't you seek to maximize your ROI in doing that good too? Shouldn't you want to get the most bang for your charitable buck?

So, if you are like me and your mailbox is literally now being flooded daily by charities asking for that year-end boost, here are four simple tips to help you decide which -- if any -- of those solicitations most deserves your hard-earned dollars:

1. Fall in love with outcomes, not organizations. Choose your outcomes first -- what exactly is it you want to accomplish with your donation? What causes are you passionate about? Figure that out and have a concrete idea of what you would like to see accomplished. Once you have decided on the outcome you want, go out and find a charity that best delivers that result.

2. Measure the return, not the activity. In this case, you're focusing on the cost per outcome. Put another way, you are looking for the biggest "change per buck." For example, say you can donate $10,000 and pay for books to be given to 2,000 kids. There may be some evidence that having a book will encourage some of those kids to read more and that their reading ability will improve some amount. And getting books to 2,000 kids sure sounds good.

But say you can use the same $10,000 to fund an after-school reading program for just 20 kids, and kids in similar programs have seen their reading ability go up a full grade level or more. The reading program targets fewer kids, but it is also more likely to provide a tangible ROI than the "spray and pray" approach of the book donation.

3. Get a second opinion. Even once you've found a group that looks good, find an alternative organization or opportunity to compare it against, just like you would get another quote for car insurance. You might find a different option that will give you a better ROI. Or you will feel even more confident that your initial idea was the best choice.

4. Remember that "charity" isn't the only way to do "good." Think of supporting social entrepreneurs -- the people who are looking at whole new ways to solve problems and make a change in a system or approach and then spread that idea to have wide-scale impact. Lending, rather than donating, is another option. Some groups focus on small "microloans" that can have a big impact. And don't forget the investment of your time and expertise. If the outcome you are passionate about achieving is in an area you know a lot about, your knowledge and time may actually be the investment that delivers the biggest ROI.

Looking at charitable giving this way may take a little more work than just writing a check to the same organization you've always supported. But an approach like this will help you focus your giving where it can do the most good. And investing a little time now will help give you peace of mind, knowing that your donation will work hard for you -- and for those you are trying to help.