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We know how it goes — you always intend to volunteer more or write that check to your local charity, but then another month goes by and, well, it just hasn’t happened. With so many great causes worth your time and attention, how do you decide where, when and how to direct your efforts?
With just a little bit of planning, you can make sure you’re including charitable giving in your everyday budget and not overlooking causes you care about. Here’s how to be more intentional with your giving.
Step 1: Determine what you’re most passionate about.
To start, think of charities in terms of categories and identify one or two that tug at your heart. Charity Navigator lists 11 main buckets ranging from animals to education to research and public policy. If you’re overwhelmed by the choices, start with something local, like a neighborhood soup kitchen or your favorite public library. “You can get so targeted these days that if you do just a little research, you can get your money to where it can be most effective,” says consumer advocate and author John Wasik.
Step 2: Vet your options.
Do some homework to find the right organization that’ll best allocate your contributions to your liking.
Review the charity’s form 990. This is a good place to start, Wasik says, because form 990 is a tax document that evaluates the operations, governance and finances of 501(c)(3)s — basically why the organization qualifies for charity status.
While you might note operating costs, don't count an organization out just for having high overhead, says Brent Kessel, CFP®. A charity might spend a lot of their budget on large events, but if they're bringing in millions and raising awareness, it could be an effective use of funds.
You can also compare your charity’s budget with those of other similarly-sized orgs. Wasik recommends checking GuideStar or the Better Business Bureau.
Review its website and annual report. This is where you'll learn how the organization defines success and impact. You’ll also be able to get a sense of what they value most by what’s featured — anything from personal stories about small impactful moments to harder data about fundraising campaigns. If the charity doesn’t have a website, it could be a red flag, says Wasik, so follow up by asking for an audited financial statement to confirm they are legit.
Get a sense of what it’d be like to be a donor. Every charity has a development director anxious to get new donors involved. Call that person, or the donor services department, and ask for some sample donor materials to get a sense of how an organization will reach out to you. For example, maybe daily emails and weekly phone calls are a dealbreaker. “There's no right or wrong answer,” Kessel says. “It's just important to know what type of donor you are and partner with charities that are communicating with you in your language.”
Step 3: Decide how you’ll define success.
It takes a lot of research to find quantitative data on how much of your money ends up directly addressing a charity’s mission, so have your own measures of success — even if it’s just the warm and fuzzy feelings you get.
Kessel tells his clients to remember the best experience they had helping someone else out. What about the experience made you feel great about giving? How was that gratitude expressed back to you? Then make a list of the top three to five attributes of those experiences that really worked for you. Maybe after making a contribution, you received a hand-written note from a charity telling you how your money was used. Or maybe you received a “thank you” phone call that signified you were more than just a few dollar signs to the organization. Kessel says you'll feel most fulfilled if you find charities that will give you those same kinds of experiences.
Step 4: Crunch the numbers on your charity budget.
Giving is personal and shouldn’t fit into any prescribed percentage or amount. Instead, calculate a figure and make it a fixed line item in your monthly budget. You’ll want to make sure all your other essential expenses are covered and that your financial goals are on track. Giving too much could cause just as much financial instability as being in debt or budgeting incorrectly, Kessel says.
Once you have a number in mind, consider setting up an automated transfer to a donation savings fund on a cadence you’re comfortable with, so you’ll always have some money set aside for giving without it being a shock to your budget.
Step 5: Make it easy to give.
While charity isn’t something you want to set and forget completely — a critical component is feeling connected to your giving — what you do in your everyday life can also translate to charity dollars. For example …
Going to the theater. If you enjoy arts and cultural performances, most arts organizations will offer perks for a donation-based membership. The Public Theatre in New York City is famous for its free Shakespeare in the Park performances, but donors get reserved seating.
Online shopping. "Shopfunding" is the idea behind Goodshop Gumdrop, a browser extension that provides online shoppers with coupons and donates a portion of their checkout dollars to a cause that’s important to them. “Here’s something you’re already doing every day — shopping online — so take this action and turn it into a way to help your cause,” says Goodshop co-founder JJ Ramberg.
Taking advantage of company perks. Many companies will match charitable donations, sometimes even more than dollar for dollar. See if your employer offers this benefit so you can send additional money to your cause.
Step 6: Revisit your causes.
The causes that matter to you most today might not spark the same fire in you five years from now — and that’s OK. I’s hard to let go of organizations that do great work, but you’re more valuable to one when you’re deeply connected and excited by its mission.
That’s why Kessel recommends checking in annually whether you still align with your charity’s mission, or if it’s time to find another cause that motivates you. His parting wisdom: “If you can't find a way to do it with joy, don't do it.”
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.