April 2, 2012 at 7:35 AM ET
The winners of the Mega Millions lottery could use hundreds of millions of dollars to buy an island, a ranch or even a small company or sports team.
Or the three winning ticketholders who have a claim on the historic $656 million jackpot could give all, or a good chunk, of it away.
A couple of hundred million dollars may not be enough to cure cancer or enact world peace, but experts say there are ways to use newfound wealth effectively.
(The exact amount each lottery winner would receive would depend on whether they take a lump sum payout or agree to yearly installment payments, and there are taxes to consider as well.)
Rob Mitchell, CEO of Atlas of Giving, which tracks data on philanthropy, recommends taking a no-nonsense approach: Figure out what very specific problem you want to address, and how to best do that.
“The people who have achieved the most satisfaction ... are those that have taken the most business-(like) approach,” he said.
Mitchell said that's easier if you decide to do something specific, like construct a building or a renovate a stadium. It's tougher if you have a more general idea, like helping homeless people.
Still, there are areas where you can really see where your money makes a difference.
Ross Fraser, spokesman for Feeding America, says that for $1, his agency can provide eight meals to the nation’s approximately 49 million people at risk of going hungry. That means $200 million would buy 1.6 billion meals.
One way to make a major mark is to focus on the philanthropies that aren’t as big, or well-known.
Very large sums of money are often donated to major philanthropic organizations or big arts and academic institutions, noted Naomi Levine, executive director of the George H. Heyman, Jr. Center for Philanthropy and Fundraising at New York University.
But Levine said she thinks an individual could have a much bigger impact on local organizations, and particularly those that serve vulnerable populations such as the hungry, homeless, elderly or disabled.
“I would hope that the person who has that kind of money to give away would give it to the small social service agencies that need it so badly today,” Levine said.
Still, you must be somewhat careful that a small organization will spend your money wisely. That means reading publicly available tax documents to make sure the organization is using its money effectively, and grilling key staff members to make sure they know what they’re doing.
You might also want to take a look at how the big givers have done it. The Bill and Melinda Gates Foundation, which is also funded by billionaire Warren Buffett, has devoted more than $25 billion to fighting malaria and other issues.
In total, Americans gave more than $346 billion to charitable organizations in 2011, a 7.5 percent increase over the past year, according to Atlas of Giving.
© 2014 CNBC LLC. All Rights Reserved