Start a charity or name a building?

The Powerball jackpot is over $250 meeeeeellion dollars tonight and it is always fun to think about what you would do with the money if you won.

My kids and I talk about winning the lottery when a large jackpot is in the news and what we would do with the money if we won. My kids look at me skeptically when I tell them that they have already won the lottery since they have me as their Mommy!

What do you do when you come into a big honkin’ pile of money through hard work, family assets or winning the lottery? There are lots of decisions to make regarding how (and if) you want to leave your charitable financial footprint. I appreciate and congratulate the good intentions of wealthy people who want to make the world a better place by giving their money away to a cause that is meaningful to them.  Some people will start their own charity as a way to do this.  Sometimes that is not a good idea.

A recent article in the Wall Street Journal speaks of the pitfalls of starting your own charity.

Having worked for a few charities, I can tell you that there are some serious (and sometimes debilitating) overhead and expenses that come along with being a charitable organization.  Much has been written about charities that give few, if any, dollars to their intended recipients. I see this a lot with celebrities and professional athletes. Their bank accounts are large and intentions are good, but the operational aspect of running an organization can be overwhelming. Some of the larger expenses include:

Salaries:  Expect to pay people to run your organization. Family members included.

Professional Services:  Accountants, Consultants, Lawyers etc..

Facilities: (If you are not doing this out of your home) Rent, Utilities, Maintenance, Snow removal!!

Insurance: Especially if you are having any events. You are liable if your guests gets injured.

Equipment: Computers, hardware, software, printers, desks, chairs, phones

Supplies: Pens, pencils, paper, postage

There are plenty of charitable avenues to take to be a hero for your cause. I’d like to recommend that the most responsible way to do this is to give your money to an established charity that has a mission similar to your own. They are staffed and already figured out the financial logistics on how to appropriately manage expenses (we hope).  If you want your name to be associated with your mission, then let the charity name a building, a wing or a conference room after you!

Check out my LINKS page to see the websites that can help you with your research.

If my kids ever win the lottery, I can only hope that they will be smart and not buy all of their friends gold necklaces or depreciating assets.  Good luck!