Planning charitable giving

Knowing how much to spend on charity each year can be difficult.  If you’re not in a religion that tells you hey, you have to give 10% if you want to be saved, making the decision of how much to spend on oneself, how much to spend on charity, and how much to save for our own future rainy days is not easy.

And then there’s the guilt whenever you look at worthy causes.  Do I really need a year of lattes or to pay down my mortgage faster etc. if that means a kid doesn’t get mosquito netting and dies of malaria or another kid could go to private school or a cat’s life isn’t saved?  (And, of course, who is more worthy?  The kid in the developing country who could get malaria, the kid in the inner city who won’t get as good an education, or the fluffy kitty cat?  And where does the ACLU fit in?  How can we justify any spending at all?)

This XKCD comic does a great job of exploring that dilemma.

On a more serious note, it can be good to budget one’s charity. Choose a dollar amount or a percentage amount of income or some other target, just like any other portion of what you spend. Then plan your spending around that. Like the comic, you don’t want giving to be a chore and something that causes you deprivation… if that happens you might stop giving at all.

By planning charitable giving first, just like you plan savings first, you should be able to spend guilt free, because your spending choices are being made at the expense of other spending choices, not at the expense of giving.

In reality:  I’m a soft touch… when people ask for good causes and good organizations I have a really hard time saying no, especially for things that hit education, kitties, or cancer.  So I do a fair amount of unplanned charitable giving compared to the regular planned giving we do.  But I’m also not as generous in terms of the amount I give as I thought I would be back before I started making a real income.  Part of that is that we’re saving for future charitable giving (on DH’s relatives… turns out a Pell grant pays 100% of community college if you’re truly poor… I should update on that situation), but it’s still not as generous as I’d thought we would be at this income level.  Lifestyle inflation does creep up on a person.  And there are so many tax-advantaged savings vehicles we haven’t maxed out yet.  Not to mention the fact that primary residences can be expensive.  Maybe we will give more later, maybe we won’t.

Do you give?  Do you plan charitable giving?  How do you plan charitable giving?

23 Responses to “Planning charitable giving”

  1. Practical Parsimony Says:

    I don’t fear a fiery end if I don’t give 10%. Actually, I would have to borrow money if I did fear repercussions.

    I buy goves, scarves, and caps at yard sales all year long to give to the homeless. I will only spend a quarter apiece for any one item. One yard sale sellers were pushing me to buy more expensive gloves after I picked out a quarter pair. I told them what I was doing and could not afford the coats. After about 30 seconds, the two couples started carrying a dozen or more coats to my car, telling me I could have them. So, it took two men two trips to get the bags from my car and trunk that Christmas.

    Free items from Office Max by recycling ink cartridges and toners. I supply my grandchildren with school supplies, and it costs me nothing. Last week, a mother with four children thought a church would give supplies to her. She was disappointed. Her son translated when I offered school supplies. I gave them a variety of things, almost covering their supply lists.

    This is the way I regualrly give. It has to cost me little and be of great value to the receiver. It works. There are other times I “give.” When someone needs a short ride to a store, I will take the person. Money is not all that is acceptable to give and get “credit.” No, I don’t do it to get “credit” from a… whatever anyone believes will punish.

    It’s not much, but dozens of people get relief.

  2. Practical Parsimony Says:

    Free items from Office Max come from recycling….

  3. Belle Says:

    I give time and money. My choices are usually centered on animal/wildlife charities, as I see it as a tiny pay-pack for all the love I’ve had from animals all my life. So places like World Wildlife, HSUS, Greenpeace get regular donations, as does the local food bank. And this year, a bit to national political campaigns, as Mittens & Co disgust me.

    • Comradde PhysioProffe Says:

      HSUS advocates extremist animal rights positions vis-a-vis animal research and anyone who cares at all about ameliorating human disease, suffering, and death through biomedical research should never give them a penny.

  4. SP Says:

    I have a hard time giving, so I finally set up an automatic paycheck deduction into my companies chartiy fund, which is employee driven. It isn’t the absolute best place for my money to go, but it is more worthy than my pocket. (note: this is a fund that supports a vast number of charities, NOT something that supports my own employer!) Then, I donate to friends/family who ask for stuff for charity races or whatever, and I do try to find a couple worth causes that I value to round out the giving.

    Contributing to the fund has made my year the least stingy year so far.

    • Debbie M Says:

      That’s how I started. And you’re probably immune from the recipients continually asking you for more. (Just an annual fund drive, probably.)

  5. becca Says:

    The kid who might get malaria is the most deserving, obviously. (kidding! sort of. I mean, it is obvious for me, but I understand it isn’t for everyone).
    I know what you mean with the “I thought I’d give more when I got to this income level” thing. Right now, my “save for a rainy day” needs are very high, so my charitable giving isn’t where I’d like it.

    I did just budget in money for charitable giving (not as much as I “ought” to in some cosmic sense, but as much as I comfortably can without stressing about it), and that does help actually me spend in ways that I feel happiest about. I’m partial to the types of giving where I get a high personal-connection feel (Donor’s Choose got me hooked on the ‘pick a project’ type of thing). Right now, I’m trying out Kiva. I feel like I’ll get to keep getting the warm-fuzzy personal connection feel multiple times for the same amount of money as the microloans get paid back, so it’s a cost-effective type of charity. I also look for projects where it’s obvious that a little money now will make a great deal of difference later (I like the agricultural ones; it’s very concrete), so I can see how a loan can help.

    • Debbie M Says:

      I have picked areas where I can’t see how well my money is working. And in most cases, I really don’t want to. It’s depressing to read about starvation and torture and planet rape all the time! That makes it less motivating for me, but I’ve still been able to do it (except this year, when I’ve been afraid of not having a job).

  6. Tinkering Theorist Says:

    I keep wondering how much I should be giving. I was hoping for examples of income percentages in this thread, but they haven’t appeared yet. I don’t know if I can afford 10% right now, but after daycare ends (which is more than 10% of income for us), we plan to use public school. There will be after school care, but probably the difference between that and daycare will be 10% of our income. So then I could afford it, but I also want to save more for college. And I don’t want to pick the 10% figure just because it’s discussed in the Bible or something. It could be too high or too low, I’m not sure. I could check what is average for people of my income level to give, but I think that average is a low bar to set as a goal. Does anyone know where detailed statistics are available?

    • nicoleandmaggie Says:

      It shouldn’t be the same number for everybody– because of diminishing marginal utility, the number should get bigger the higher the income you have. It hurts less to give 10% of a million (leaving you 900K) than it does to give 10% of 10K (leaving you 9K).

      • Debbie M Says:

        I agree. And it’s not just about income either, but also expenses.

        And I agree that this is a really hard number to pick. No matter how much you are donating, there are still people in worse shape than you that you could help by donating a little bit more. And if you are donating anything at all, you’re donating more than some other people are. I started with a small amount that I felt comfortable with and worked my way up to 10%.

        Googling shows all kinds of interesting answers to your questions. Like the average American family donates over $1000 per year and this is more than people in other countries donate. (Though in other countries, the taxes are much higher and probably take care of some of the things that we need donations for.) Low-income working families give away about 4.5 percent of their income on average; middle class, 2.5% and high-income families, 3%. Average giving ranges from less than 3% in some states to 7% in others. But another source says Americans average 1.63% (I’m guessing that’s per person instead of per family). Religious people give more than non-religious, and conservatives give more than liberals. And people who give in one way are more likely to give in another way (such as to both religious and non-religious charities or both money and time).

    • Liz Thornberry (@lizthornberry) Says:

      Peter Singer will tell you how much to give ( I know that some of his other stuff is controversial, but I find his arguments on international charity very compelling. Basically, he argues that most people should give 1% of their income, but that once your household income approaches $100,000, you should give 5%, and if you are actually really rich, you should bump way up to 50% or so.

  7. Debbie M Says:

    These are my exact issues. Here’s what I do now:

    1) How much, and what about the guilt? I compromise between giving the most I can possibly give and still be in pretty good shape (50%?) and the amount I want to give up (0%). I looked up what the average American gives (I think it’s around 3%, more if you’re poor). And I went for 10%. It’s way more than most people, so I get to have low guilt. But it’s just a small percent of my money, so I still get to be rich (indoor plumbing! doctor visits whenever I want! travel to exotic locations!).

    Because of this 10%, I really don’t donate to anyone else–no handouts on the street, no sponsoring of races, etc. It helps that children do not ask me for this stuff. But it’s easy for me to remember that I cannot afford to help all the causes and that I’ve already picked out some important ones. I even refrain from donating for disaster relief most of the time (I’ll do food or other in-kind donations when those are specifically requested) because that’s something that is getting a lot of attention without my help.

    2) Who gets it? I’ve decided to go with the belief that we cannot fix everything but we can help with something. If everyone helped with something, there would be a lot of stuff getting fixed. And if we all picked the things most important to us, then most of the important stuff would get covered.

    Then I decided to figure out which were the most horrible things, the things that most should be fixed. Here’s what I picked:
    a) The destruction of the home planet
    b) Extreme poverty
    c) Torture. Abuse. And other pain.

    Then I tried to figure out the best ways to work on these. I’m still not overly satisfied with my choices here.

    a) Environmental – I started with the Nature Conservancy because, instead of begging politicians to make laws, they actually buy land. And they scientifically choose land that would have the best impact. And they work with landowners to help them make more environmentally friendly choices. Farmers and ranchers actually like them, because they’ll work with you instead of trying to pass laws to force you to use your own land some way that you don’t want to use it. I also donated to Conservation International which seemed to do the same kinds of things. I didn’t know about them specifically (I did some typing for a faculty member involved with the Nature Conservancy), but they have lower administrative costs. Based on things I’ve read, though, I think another organization (Rainforest … [something]) might be more effective (working with the locals who are actually familiar with the ecosystem to find ways to make a living within the currently functioning ecosystem) so I switched to them.

    b) Poverty – I’ve been doing the microlending–it seems like a little money can go a long way. But I’ve also heard bad things about that. A friend of mine got involved with Engineers without Borders, building a school and a well. That seemed pretty effective to me (clean water really helps reduce disease, not to mention dehydration), so I contribute to them. And another friend was involved with an orphanage in Haiti that got involved with additional work after the hurricane, so I contributed to that.

    I also contribute some to Planned Parenthood, which I feel addresses both environmental and poverty issues.

    c) Torture – Amnesty International. Abuse – looking for local places that prevent abuse by teaching parental skills. Pain – I found some group that researches pain medications for cancer patients (some of which I assume could be used for other people as well).

    3) One more issue–how to keep charities from wasting so much time and money and trees bugging you to death. I make all my donations through (I started with my employer’s plan, but JustGive takes only 3% of the money, and my employer was taking a lot more.) You do have to make sure to check the anonymous box, but you will not get bothered at all. I do make “contributions” directly to the organizations from which I benefit (public radio, public TV, the local wildflower center, etc.). This is in addition to my 10%. I’ve also recently added another 1% for other self-centered giving, like for building bike trails or a planetarium; I helped with the creation of a new bulk-only neighborhood grocery store.

  8. Amy Says:

    I am Mormon and I do give 10% of my income. Not because I fear a fiery end if I don’t, but because budgeting out that 10% helps me to better budget the rest of my money as well. It’s easy to spend as much as (or more than) you earn, but if you plan to give away a certain percent, save a certain percent for yourself, etc., you can break that habit. Obviously it takes practice. And, as others mentioned, it’s a lot harder to give away that 10% when you’re a broke postdoc living in San Francisco than it is when you’re a fully employed faculty member in a city with a much lower cost of living. Now that we’re both gainfully employed we try to donate to other causes as we see fit, but it is harder to determine which cause(s) are “most worthy”.

  9. jefferson @seedebtrun Says:

    We are nose down on debt reduction, but one of the first things that we do when we get out of debt is going to be developing a plan for helping out the charities that we care about.. We have volunteered our time whenever we can, but haven’t been able to do much financial giving while our finances were a wreck.

  10. Cloud Says:

    I think our system is similar to yours- we have a set amount budgeted for “big” charitable giving. It is not 10% of our income, but it is a decent amount of money, and we try to increase the amount as we earn more. We divide it among 4-5 charities that we both agree are worthy. The little pledge drives, etc. that we get hit up for at the office and via email from our friends we will give a small amount to- usually about $25. This is all from our joint checking account. Then the random other things I see that get me because I am a big old softy- usually things I find via social media- I do out of my own checking account. (I transfer almost all of my paycheck to our joint account, but years of leaving a small amount behind has built up a bit of money in my personal account, which gets used primarily for gifts for my husband and random things that I don’t feel like explaining to him, like being a complete softy and giving money to people I don’t know because someone I follow on Twitter linked to their Indiegogo drive.)

  11. MutantSupermodel Says:

    I give what I can, mostly things. When I’ve had money I’ve bought lunch for someone homeless who asked me for change. Right now, I set aside donation piles for the Sisters of Charity. This has been a good one for me. They have a shelter for homeless women and children but they also manage the operations for Haiti and THAT is where the bulk of the donated items go. Although when we donated Baby’s crib, the lady said that one they’d probably keep because they do need it. I find them amazing. The shelter gets by on as little as it can because the need in Haiti is so overwhelming.
    Books go to the library although I did send the sisters a ton of children’s books and those they kept as well. Usually the shelter trashes books because they’re too heavy to ship and they have restrictions on space.
    I would really like to volunteer my time to them every other weekend but something keeps holding me back. I have such an unreliable schedule because their dad doesn’t take them every other weekend or we swap some times that I don’t want them to count on me and then disappoint.
    In the past, I have also participated in Angel Trees at Christmas time and there is a needy family that takes care of my grandmother’s best friend that gets my kids toys that are in better condition.
    I don’t really have much guilt. I choose something that resonates with me but I tend to steer away from large organizations. I like direct giving way more.

  12. Practical Parsimony Says:

    I was in the grocery store and heard the cashier behind me as I was checking out tell someone they did not have enough food stamps. I turned and said I would pay it. The person was putting back food still–keep the chips, put back the potatoes; keep the Cheetos,put back the cheese; keep the cookies, put back the bananas…that type mentality. I wrote a check for $7+ and never told a soul. This was 20 years ago. That mentally challenged couple walked the streets because they were not drivers and there is no public transportation here. THEY told the owners of a boutique about 6 months later when they saw me leaving her store. The owner told me and was amazed. She told them I was really doing something if i helped anyone because of my lack of funds. I was in school and borrowed money to cover the grocery check. Somehow, I felt I had to help those people who were rather defenseless even though they made poor choices. ( i did not shop at the boutique.)

    My giving is erratic and probably more than I would or could budget. Even though I am telling this here, I feel that so many people give to show the world they gave. Of course, they brag. Not cool. I was a regular tither until I got over that whole way of life. .

  13. Carnival of Personal Finance #367 – Welcome to Disney World! | Money Life & More Says:

    […] World has a lot in common with the post Nicole from Nicole and Maggie: Grumpy Rumblings wrote. Planning charitable giving is her post in which she examines questions such as Do you budget charitable giving in advance […]

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