How to donate to charity while staying within your means

How to give to charity while staying within your means

One of the pleasures of having money is using it to support causes you believe in. But how do you know when you’ve earned “enough” money to give away some of it to charity? And how do you pick an organization that is aligned with your values and will use your donation wisely?

Consider this your primer for finding ways to give back at a time when charitable donations are slightly down amid recession fears and the 2017 tax overhaul has made donations for deduction purposes less attractive.

Charity is a want, albeit a moral one

Once you’ve paid for your housing, food, childcare, and other “needs” for the month, you should use what’s left to make payments toward eliminating debt (especially high-interest credit card debt), contribute to your retirement savings, and build up an emergency fund. What’s left beyond that can go toward “wants”—and that includes charitable donations.

Paying down your debt first isn’t selfish. It keeps you from throwing money down the drain in interest payments; you’ll end up with more to give down the road. Similarly, retirement contributions make it less likely that you’ll need to turn to charity organizations yourself once you’ve stopped working.

That said, if you’re on schedule to meet these needs and have a stable job, go ahead and give. (There’s probably a tote bag in it for you.) Just make sure you’re on solid ground.

If minding your budget priorities leaves you with little or no money to give, don’t be discouraged. There are lots of ways to support causes you love, and many don’t cost a dime. Read on.

What can you give?

For those with more time than discretionary income, volunteering is often as meaningful (and impactful) as donating money.

If you don’t have the funds to give, you might consider raising them instead. For example, there’s peer-to-peer fundraising via social media (maybe you’ve noticed birthday fundraisers on Facebook) or even old-fashioned walkathons.

And remember, even small amounts can help. “There are opportunities to give very modestly even when times are lean,” said Kevin Scally, chief relationship officer at Charity Navigator, an organization that rates the effectiveness of charities, in a phone interview. He recommends becoming a recurring donor, even for as little as $5 a month. (Not to get all NPR on you.) “You can feel really good about the impact you’re making, and you will get lots of updates from the organization, and you’ll be seeing the impact throughout the year,” he said. “It’s kind of a ‘set it and forget it.’”

If you have a bigger chunk to spare, how much to give depends on your priorities and interests. Some people give 10% of their income—a figure that comes from the tradition of tithing—but there’s no hard-and-fast rule. If you prefer to be conservative in your monthly giving, you might consider balancing it out by making a planned gift, which means leaving money to a charity in your will or estate plan.

Who will get your money?

Before cutting a check, do your homework. “Dig deep into the information a charity is offering publicly,” Scally said. “Make sure they are accountable, and are showing what their impact is. What are they actually doing? Are there case studies?”

To gauge the effectiveness of an organization, check out ratings sources such as Scally’s Charity Navigator; the nonprofit division of the Better Business Bureau; Guidestar; or the National Committee for Responsive Philanthropy. Look for organizations that devote an “absolute minimum of 75% or 80% to programs, and 20% to 25% to marketing and overhead,” Scally said. And if you want an on-the-ground sense of the work a charity is doing, volunteering can be a great window into the organization.

That way, you’ll know that when you donate money, they’ll spend it with the same care with which you’ve given it. And whether you’re funding a wing for a library, or a chipping in a few bucks a month for a food bank, you’ll feel good knowing you’ve helped make a difference.

Make it a family affair

To mark the birth of each of our three children, my parents donated an antique tzedakah box to a local Jewish museum. When my kids were old enough to visit the museum and appreciate the relics in person, the wisdom of my parents’ gifts was evident: They had instilled the idea that giving is a moral imperative for Jews. (Tzedakah literally means “righteousness.”) My point? No matter if it’s out of a religious obligation, an intrinsic, altruistic impulse, or both, there are ways to pass along your charitable inclinations to your children and grandchildren so that they, too, make giving a tradition.

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