Does this sound familiar? December rolls around and your mailbox is full of solicitations from charities and non-profit organizations that need your money. You get busy with the holidays—parties, family, travel—and on December 31, you realize that you haven’t made any donations. You kick yourself but realize there is no way you’re going to get to it, and you resolve to be more proactive about your giving next year. Or, you scramble to write a bunch of checks, stuff them in their envelopes and drop them in the mailbox, hoping you didn’t forget anyone.
You haven’t kept track of what you might have given these organizations and others during the year. You put it out of your mind until taxes are due and you are compelled to make the calculations in order to take advantage of the tax deduction. As you look over your list of donations, some of you may be proud of what you see—you’re happy with both the level of giving and who you chose to give money too. On the other hand, some of you are horrified that you gave too little or too much.
There is a better way.
Why not be more strategic about your charitable giving? Here’s how:
- Early in the year, identify charities and non-profits that do things you care about. Think about your values and ideals and find organizations that support them.
- Consider your charitable giving as an expense just as you would any other discretionary expense, like travel, dining out or entertainment. Start with how much you would like to give annually, and then determine whether you can afford it. Realize that you may have to cut back on another expense to meet your charitable goal.
- Take your budgeted amount and divide it amongst your chosen organizations.
- Schedule your donations to fit optimally with your cash flow.
You may realize in the process that you can’t afford to give as much as you would like. This gives you an opportunity to find other ways to help: by volunteering, donating goods or helping to spread that word about the cause. Either way, you will have a strategic giving plan that you can feel good about.
If you’re stumped on the first step (identifying organizations to give your money or time too) here are some online tools you can turn to:
Charitynavigator.org: is an independent charity finder that has some interesting features like top 10 lists to help you narrow your search.
Justgive.org: Type your zip code in the “act locally” search feature and find organizations near you.
Charitywatch.org/toprated.html: This website provides a list of top-rated charities.