09/07/2012 05:31 pm ET Updated Nov 07, 2012

Give it Some Thought Before You Give it Away

Giving, it turns out, really is better than getting. In recent a New York Times article, researchers Elizabeth Dunn and Michael Norton explained that more money does not really make us happier and that it is what we do with our money that has the greatest impact our happiness. Whether you are giving away $25, $2,500 or $25,000, the questions you need to ask yourself are the same.

Good philanthropy involves a little bit of research and a lot of compassion. It requires that the giver finds something that matters to her and then, sifting through the worthy causes that address this need, discovers an organization that can successfully target it. Great philanthropy, needle-moving, life-changing philanthropy involves asking ourselves some very hard questions, about our worldview and our relationship with money, facing the answers and following through.

Do you know why you want to give to this cause? Why are you doing this?

Many people give because of guilt or because of expectations that others hold for them. They give because their family has a long association with a cause. This starting point is the place to ask the hard questions, to ask yourself what you really care about and why. This is the moment to let go of so many of the "shoulds" that can dominate our lives. It is the time to confront your childhood baggage head on and be true to yourself. Your family may have always given to the local church but art may be what calls to you. This is the moment to be honest with yourself and to answer that call.

To be successful do you need stories or statistics, or perhaps both?

Many givers like to know the beneficiaries of their largesse. They want a narrative that focuses on real lives and real stories to know that their giving has achieved its goal. They do not want their giving to be faceless. Others want to know that their actions have had a measurable impact. They want to see the before and after, not as a look on someone's face but rather numbers on a spreadsheet. There is nothing wrong with either approach, just make sure you know which one is yours before you begin.

Do you need to be expert, or at least highly knowledgeable in the area of your philanthropy?

Some people feel comfortable when they are out of their element, others clearly are not. For many this means that their philanthropy is rooted in a world they know so that nothing they learn about their cause goes over their head. For others philanthropy is a way to delve into a world they have never known, be it healthcare, Africa or a local museum, and to learn right alongside their money.

How great do you want your personal involvement to be?

You have time, money and attention. Recognizing that at different points in your life you will have different amounts of each, so the answer is not static: how much of each of these things are you willing to subtract from the rest of your life to give to others? They are all in limited supply and if some forethought is not given to their allocation, a problem will rise up, full blown, later. Best to think it through.

How much hard work are you willing to do in exchange for how much control or influence?

If you think about investment in philanthropy like investing in a company there are three types of givers/investors. There are the entrepreneurs, the ones who conceive of and develop the business, they give their labor and their money and in return they have control over the organization's mission and message. The same is true in the philanthropic world of those who are willing to start a new organization. They have control, a very high level of commitment is required and failure, is not only an option, but a real possibility. In the business world there are also venture capitalists, those who make significant investments of time and money, but do not run the organization. Their influence is large, but not absolute. And then there are shareholders or donors, people who give lovingly of their money, but on whose shoulders the organization's success does not rest.

How soon do you need to see success?

The time horizon on philanthropy has surely shortened. Centuries ago benefactors would give to the construction of, say, a cathedral knowing that it would not be completed in their lifetime. We still give heavily to causes, the cures for disease or the development of vaccines, that we know can be decades away. As a donor, does this matter to you? Many give to the arts or education, and the fulfillment of their giving can be seen in the same calendar year that the check is cut.

Do you need leverage?

Is writing your check enough or are you hoping to galvanize others with your effort? The answer to this question speaks to how you make a donation to a cause. If leverage is not one of your goals, then quiet or even anonymous giving is all that is needed. But if you are looking to make a bigger splash, hoping that perhaps your efforts will inspire others, then what will be your strategy. Press? Social media? Asking others in your community to give alongside you? A matching challenge?

Who are you going to do this with and how do you need to take them into account?

Is this your money alone or is it family or marital resources? Do you have parents, siblings or a spouse or partner who needs to be involved, at least to some degree, in the decision making? Do you want to include your children either to educate them or because a stewardship responsibility will eventually fall to them?

Do you know what failure will look like for you?

If you don't know what failure will look like you might find it and not recognize it. Before you begin your giving endeavor it would be worth defining success and failure. At what point, what metric, what anecdote or story will you know that you have achieved what you set out to accomplish? And perhaps more importantly, recognizing that giving is an investment, when will you know to cut your losses and walk away?

How high is your tolerance for imperfection and risk?

Giving money to your alma mater is safe. Giving money to a group of researchers exploring new gene therapy or an experimental music group is not. We each have a different tolerance level for risk, imperfection and mistakes. Is this a place in life where you would like to take greater risk? How is having "wasted" money going to affect you?

Giving money away is a deeply personal matter, complicated by expectations that surround us. To find real success in our giving and the joy that comes with it, we need to answer some very hard questions and be true to those answers.

Lisa Endlich is the author of Be the Change (HarperCollins), in which she interviews and profiles some of the world's most exceptional philanthropists. She blogs at Grown and Flown.