Smart Giving

Philanthropy is changing. Inspired by hands-on donors like Bill and Melinda Gates, buried under all the solicitations and unwilling to hand their cash over to fund-raising machines, contributors are becoming more strategic. They're writing bigger checks to fewer organizations, taking a more active role and involving their families in the whole process. "They're leaving reactive checkbook philanthropy for something more focused," says Diane Neimann, whose Minneapolis firm, Family Philanthropy Advisors, helps people devise giving policies. It doesn't have to take a million bucks, either. Here's how to get started:

• Close the checkbook for a while: Do your giving just "once or twice a year, when you've got your solicitations in front of you," Neimann tells clients. Spend the other time doing research and talking with your family, deciding which issues are nearest to your heart, and which organizations address those issues. Many of Neimann's clients use holiday gatherings or family retreats to have these talks.

• Budget for three kinds of giving every year: Set aside a small amount for memorial donations and neighbors running charitable races. A second pot should be for those organizations you support with a set annual amount, such as a college or church. The largest, third amount should be for the one social project that resonates most.

• Explore tactical vehicles for giving: Giving Circles (givingcircles.org) are small local clubs that pool funds and research for greater impact. Donor-advised funds allow families to create and name their own charitable pools; many are run by mutual-fund companies like T. Rowe Price (program forgiving.org) and Fidelity Investments (charitable-gift.org). They typically require a $10,000 minimum, but offer donors an immediate tax deduction for the gift and the ability to build large amounts over time. A family foundation offers more leeway, but takes a lot of expensive consulting and paperwork to set up, so could require that cool million after all.