I am a total bleeding heart. There are so many people in the world who are so in need -- I would love to be able to help them all. As a graduate student, I would pass a dozen or so homeless people on my walk to school every day. It was so difficult for me to walk by without doing anything. But, I couldn't really afford to give each of them money every day -- I was just a poor grad student. Still, it bothered me so much that I knew I had to find a solution. I decided to donate to a local soup kitchen. Then, when a homeless person would ask me for money, I could say, "I give to this soup kitchen, and you can go there to have a meal." Once I figured this out, it felt so good! I could pass people in need and know that I did something to help them -- but without breaking the bank.
These days, my husband and I allocate a portion of our budget for charity giving. To make the holiday season less focused on consumerism, we like save up all our charity money to give out at this time of year.
I've found that doing all our charity giving at one time every year allows us to make better choices about how we allocate our money. Here's why:
* Control how much you give. If you dole out charity money over time, it is very difficult to know how much you are actually donating to charities. Giving $10 here and there can add up, especially if, like me, you have a hard time saying no to those in need.
* Align your dollars in proportion to how strongly you feel about the cause. If you are giving out money as people ask, then you are essentially giving more to those charities that do a better job of asking for money and to the ones that happened to reach you at a good time. That is unlikely to be aligned with which causes are most important to you.
* It feels really good to give away your entire charity budget at once. A few big donations feel so much more substantial than a dozen small ones. It feels awesome to write some big checks - you feel like you are giving a sum that can actually make a difference.
Here's how I organize my charity giving:
* Decide how much to give. It usually helps to think of it as a percentage of how much you make. Or, you can decide how much you can afford per month or per paycheck.
* Save the money by taking a set amount out of every paycheck. Set it aside, even using a separate high-yield savings account to keep the money until you are ready to give it away.
* Throughout the year, when people ask you for money, say, "We allocate our charity money at the end of the year. I would be happy to take down your information and consider your charity at that time." Take the brochure or write down the web site, and save them in a file. I have a task on my task list called "Charity", and I save the list of charities in the notes field.
* When it's time to give away the money, sit down with your family to talk about what causes you feel strongly about. If you have older children, it would be great to include them in this discussion. I like to narrow my list of causes to the top 3. To me, this feels more focused. But it may feel better to you to have a list of 10 or 12. It's completely up to you.
* Once you have determined what causes you want to support, think about what % of your money you want to allocate to each cause. You might take a family vote, or let each family member allocate their own portion how they like.
Notice that you have not yet considered any specific charity - just the causes you want to support. Now, we can move on to considering charities.
* Look at your list of charities, and delete any that do not align with your chosen causes. This may be difficult, but realize that you can not save the entire world! Stay focused on the causes you feel most strongly about.
* Search the internet or ask around to find other charities that align with your causes.
* Look up all your potential charities at a charity rating organization to make sure they are reputable and that they spend the donated money wisely. I like Charity Navigator and GuideStar.
* Narrow down your list. I like to choose one charity for each of my causes. When making this determination, I like to think about several factors:
1) How well the money will be spent. How much of the donated money goes to the overhead of running the charity vs. how much reaches the intended goal. Also, how effective are they at accomplishing the goal? Spending a lot of money does not a good charity make. Being effective at helping people is what you really want to support. A healthy but not extreme amount of administrative and fund raising expense should be expected in a well-run charity. Any charity that says that they don't have any fund raising expenses or that their administrative expenses are negligible warrants further research.
2) Local vs. global. It's great to give money to local charities because you are helping people in your community. You feel a stronger connection to those being helped and may even be able to see some of your money at work. However, by giving internationally, you may find that your dollars stretch further. It takes very little money to have a huge impact on someone's life in poorer countries - so you can help more people with the same amount of money. Think about which strategy you want to adopt.
* Now, sit down and write the checks. This feels really good!
If you are not able to set aside the money for a whole year, then at least make the decisions ahead of time - at a set time of the year. When you have some extra money, you can give it away in proportion to those decisions. Many charities have the ability to set up monthly charges to your debit or credit card. So, you can make the decisions ahead of time and set up the recurring payment. This sort of sustained giving means a lot to charities.
You do not have to do your giving at Christmas time; consider doing it in the summer instead. This can help charities keep their income flow balanced since a great deal of people wait until the end of the year. It could also help you by avoiding making hard choices about how much to give when you're also trying to pay for other items around the holidays. Alternatively, you could view these hard choices as good thing. Being forced to make such decisions means that you end up spending less on Christmas, yet you can feel good about it. Buying that cool-but-useless gift at the mall seems a lot less appealing when you could otherwise be giving that money to someone in need.
Throughout the year, stick to your guns! Don't just give money to anyone who asks. Tell them that you will consider them when you do your annual charity giving. That way, you will be more in control. Your charity giving will be aligned with your ability to give and allocated according to your beliefs.
How do you allocate your charity money? What's your giving philosophy - local or global? Please share in the comments!