10 points to consider when planning your charitable giving
It's the season for charitable giving. Some encourage contributions before the end-of-the-year to declare donations on your federal income tax itemizations. Let’s talk the two types of giving and about ten points to consider when making your decisions.
Are you receiving charitable giving requests? They pull at your emotional heartstrings. Some encourage contributions before the end-of-the-year to declare donations on your federal income tax itemizations. The good news is you can choose to decline these appeals. Let’s talk the two types of giving and about ten points to consider when making your decisions.
Two types of giving exist in family financial plans: impulsive and planned.
Do you impulsively give based on who knocks on the door, phones or mails an appeal? If you do like to donate this way, it is also important to include these “fun money” contributions in your spending plan each month or annually. Impulsive giving may be part of one of the following:
- Event driven: for example, a local school fundraiser or an annual dinner.
- Product or marketing driven: for instance, Girl Scout cookies, Public Television Station programming or university campaigns.
- Challenges: fundraising involving experiences like breaking a Guinness World Record or extreme challenges. The Ice Bucket challenge was popular a few years ago.
The second type of giving is planned, and can be through a straight gift to a certain cause like a local food bank, or more deliberate and planned over many years. How much you give is a meaningful amount for you and based on your priorities. According to the University of Missouri Extension, “10 Thoughts about Giving” helps you think about your planned giving. You can choose to balance your money goals: spend some, save some, share some. By being more deliberate, you can choose where and how much to give on your timetable. You can turn down requests for charities that are not on your high-priority list.
A quick assessment of your values will help you better understand your life experiences and feelings about money. Set your goals around charitable giving to organize your thoughts and refine goals into concrete statements intentionally around issues, needs, and opportunities that particularly resonate with you, say education or homelessness, and focus on those.
And finally, not all charities are created equal. It is also okay to ask questions, learn about charities’ results before your give or give repeatedly, and also find out how much of your gift goes to the charities’ mission and how much goes to administrative costs and overhead. Resources to help evaluate charities are GuideStar.org and CharityNavigator.com to study IRS filings, annual reports and other evaluation data. The Better Business Bureau (BBB) provides information at give.org based on 20 standards.
Give your charitable giving more consideration, whether it is with small or large gifts. Define and refine your goals, talk to friends, families and professionals, visit your spending plan, plus research the options where you have a connection. Then you can make well informed decisions.
Michigan State University Extension is provides financial planning information at MIMoneyHealth.org, including a Personal Monthly Budget Spreadsheet with a section to make decisions about gifts and donations, and then to track them.