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Best practices for planned charitable giving
March 30, 2012 8:56 AM   Subscribe

How can I be more consistent and organized with respect to my charitable donations?

I'd like to establish an annual budget for charitable donations - maybe $5k including nondeductible items such as political contributions - which would increase over time as my income goes up. In the past, I've acted spontaneously in response to fundraising solicitations and one-time events. This has led to a very sporadic giving pattern where I lose track of when and how much I've donated in the past and has led to me being an unreliable contributor. I would like to be more consistent in my charitable giving and provide consistent ongoing support to the organizations that I care about. On the other hand, I try to be accommodating to charities' requests to respond to fund drives scattered throughout the year.

What are some best practices for managing all of this? (As an aside, at a giving level of 3% of combined AGI, am I a cheapskate?)
posted by Saucy Intruder to Work & Money (18 answers total) 8 users marked this as a favorite
 
Ignore the appeal letters.

Do the bulk of your charitable giving in December. Sit down with a list of charities and write out all the checks. Keep track of what you've given.

The next year, decide on your new budget. Look at the donations you made the previous year. Decide if your priorities are the same and what changes to make.

Lather, rinse, repeat.

My wife and I have been doing this for a number of years and it works very well. The best part is being able to immediately recycle all the appeal letters that come in from January through November.
posted by alms at 9:12 AM on March 30, 2012 [2 favorites]


Personally I just ignore individual fund drives and give a few big lump sums for the majority of my donations. It makes it easier at tax time for consolidating receipts, and I can get matching donations from my employer which is easier to do for a few large transactions that a lot of small ones. There are some smaller donations that I don't track as thoroughly throughout the year but that ends up being a relatively low percentage of my overall charity budget. For the big ones that represent most of my contributions it's only around 3 or 4 individual donations over the course of the year, which is very manageable. Also try to get into the mindset of looking for the specific organizations that you want to support, and giving them the money you want to give them, rather than passively responding to things like fund raising drives from organizations you don't care about as much.
posted by burnmp3s at 9:15 AM on March 30, 2012


Here's my suggestion.

If you're giving at 5k a year (which is fine - all giving is good and I'm not going to answer one way or another how much you should be giving), take a few organizations that you really care about and give to their annual appeals each year (this usually happens in the late fall). You'll often get a letter about it. By doing this, you up the percent return on their annual appeal campaign, which makes the giving manager look good, makes the board happy, and lets the org say, "we raised this much on our annual appeal," which is good leverage for the next year, as people tend to give more to campaigns they know are successful. So in a way, your money will go further.

Then again, if you know that you're going to be giving 1,000 to some org every year, you could make a larger initial pledge, say 5,000, payable over five years. People do this more often with bigger gifts, but it's useful if you're giving to a capital campaign or something, where the org can count the whole pledge against a goal, even if it isn't paid out right away, as opposed to just taking in your isolated gift each year.

So decide how much of your 5k you want to go to these dedicated organizations that you've selected. Don't select too many. There are lots of good causes, and you can't support them all. It really is better to choose a few you really care about and give them slightly larger gifts. Don't give 500 $100 gifts. Each gift costs the org a little money, because it has to be processed by two different offices, you have to be thanked, etc. I think it's better to choose a few and give more significant gifts. $500 baseline I think is a good place to start, unless it's a really small org. Then again, every little bit helps for everyone, but still. If you want to make the org really happy, give it as an unrestricted gift. I know it's nice to think that your actual check bought these actual crayons for school kids, but in the end that's only an in-theory way of thinking, and non-profits need money just to run their orgs and pay their staff. Unrestricted gifts are like manna from heaven and they will love you.

So say you pick 4 orgs you care about. Give them each $1,000 every year after thanksgiving during their annual appeal. (I guess the political schedule would be different). Then leave $1,000 for discretionary giving, and track it. Once you've given that away, well, you'll have to decide whether to hard-line cap it, or go over a bit.
posted by Lutoslawski at 9:16 AM on March 30, 2012 [7 favorites]


1. Use Charity Navigator to determine how much of the charity's income is put to good use. This probably kills charities that rely on mailers.
2. Some charities are religious themed, but do good work. Consider whether you would like your money put to good use under the banner of a religious organisation, or whether you would prefer another organisation that does similarly good work to use the money instead.
3. For tracking, just use a spreadsheet. I would track by category and by preferred charity. You may choose to support humanitarian charities over animal charities, for example. I like Doctors without Borders.
4. Consider microlending. Kiva is an example. Note that microlending is margin intensive: middle-men take a good cut of your lent money.
posted by devnull at 9:16 AM on March 30, 2012


I pick a budget and then I settle on two, or at the most three, charities that I will give to. I'd rather give $100 each to three charities than $25 to a whole bunch - it's easier to keep track of receipts for tax time that way, plus I personally feel larger donations to fewer charities does more good for the charities and my own giving impulses.
posted by Rosie M. Banks at 9:17 AM on March 30, 2012


1. Use Charity Navigator to determine how much of the charity's income is put to good use. This probably kills charities that rely on mailers.

Charity navigator is great, but mailings are often quite fine and necessary. Most non-profits do some form of it. Donor relations is a major part of how non-profits become successful. You might not like getting the mail, but a lot of philanthropists are still in an older age bracket an operate this way. A good mailing campaign will cost about 12% of the return.

And please don't fall into the 'administrative costs' trap that many who use charity navigator do. I would only seriously raise an eyebrow at an org that has an admin cost of over 30%. The essential component of many non-profits are the people.
posted by Lutoslawski at 9:21 AM on March 30, 2012 [2 favorites]


Don't give 500 $100 gifts.

*50

posted by Lutoslawski at 9:23 AM on March 30, 2012


Charity navigator is great, but mailings are often quite fine and necessary. Most non-profits do some form of it. Donor relations is a major part of how non-profits become successful. You might not like getting the mail, but a lot of philanthropists are still in an older age bracket an operate this way. A good mailing campaign will cost about 12% of the return.

Yeah pretty much every non-profit I've ever donated to that had my address has sent me at least one mailer, including Doctors Without Borders. It makes sense that it makes money overall for a non-profit but I wish more non-profits gave you any sort of opt-out option, like everyone does for email subscriptions.
posted by burnmp3s at 9:26 AM on March 30, 2012


Charity Navigator is a good place to start but please be careful and take what they say with a grain of salt. What is considered "good use" has changed significantly over the past several years. I completely agree with Lutoslawski. When I started working in nonprofits, spending 10-12% on administrative costs was considered good. That percentage gets lower and lower every year. Remember that an organization that gets a bad rating on Charity Navigator because they're spending 12% of their budget on administrative costs is likely not as bad as they look. I work for an $8 million/year organization. Do you really want us scrimping on fiscal staff and other admin costs?

Anyway, rant over. Yes, you will get appeal letters throughout the year, but please do not feel obligated to give. Giving to the annual appeal letter that you will get in November or December makes the most sense, as many nonprofits track the return rate on that particular mailer over others and it looks good for the manager wen you're giving then. Another thing to consider is a pledge or recurring donation. I like making a commitment to a monthly gift that automatically deducts from my bank account so I don't have to remember to actually make the gift. Most organizations offer this now.

I also want to put out there that you should always consider giving to the general operations of an organization. Many organizations now give you the option of giving to a particular program, which is great, but that means that your money must be restricted to that program. Flexibility is always helpful for nonprofits.
posted by anotheraccount at 9:27 AM on March 30, 2012 [1 favorite]


burnmp3s, you can directly contact any nonprofit and asked to be removed from the mailing lists. That info is tracked in a database and it's very easy to mark someone off to not receive mail.
posted by anotheraccount at 9:28 AM on March 30, 2012 [1 favorite]


Yeah pretty much every non-profit I've ever donated to that had my address has sent me at least one mailer, including Doctors Without Borders. It makes sense that it makes money overall for a non-profit but I wish more non-profits gave you any sort of opt-out option, like everyone does for email subscriptions.

It would be better if there were a more "click here to unsubscribe button," but what you can do if you don't want the mail (and I wouldn't!) is: if you are a donor, just call them and say you don't want the mail. They have a record of you in Raiser's Edge or a similar software, and there is a 'do not mail' button. They use Raiser's Edge often to do the annual appeal mail merge, so when they go and mail out letters, they will have put you on the 'do not mail' list, and you won't get a letter. It is automated, except for the part where you have to call or email them.
posted by Lutoslawski at 9:28 AM on March 30, 2012 [1 favorite]


Give at the end of the year (or at another fixed point in the year). Then, every time you get a call you can say:

Thank you for your call. I determine my charitable giving at the end of the year and will certainly consider giving to your cause at this time.

There isn't much they can say in response to that and it gets you off the phone quick. This method also consolidates your thinking about it, so you aren't considering donating every time you get an appeal letter or similar. Another bonus is that it automates that portion of the decision making and removes much of the guilt of saying no to any given appeal.

Also, nthing giving larger amounts to fewer groups.
posted by chiefthe at 9:32 AM on March 30, 2012


I agree about giving at one point in the year. I have often thought (though not acted on this yet) that it might be especially good to focus on whatever humanitarian crisis was in the news exactly one year (or two years) previously to that date, so as to help forgotten causes more than popular ones...
posted by oliverburkeman at 9:36 AM on March 30, 2012 [1 favorite]


This seems simple and stupid, but it's helped me keep track of giving for at least one organization. My grandmother loved animals and decided that once she had some disposable income, animal charities would be her cause of choice. Since she died, I picked that up in honor of her memory and I always make my animal-charity donation in early May, around the time of her birthday.

Maybe if you can synch up your causes in honor of a family member or friend and associate the giving with his/her birthday or other special day, it'll make it easier for you to remember.
posted by dlugoczaj at 9:37 AM on March 30, 2012 [1 favorite]


We pretty much do what alms does - we plan a budget, do most of our giving during annual appeals (and tell callers that to get off phone pronto) but we do keep some budget for emergencies. We tend to focus our giving on a few categories and to focus on well run groups and some local ones (also well run!) but focused on local as opposed to national/international issues.
posted by leslies at 10:08 AM on March 30, 2012


I also do all my giving in December for simplicity. Unless you are giving to a VERY small charity, whether you give in August or December will have no effect on their cash flow.

Also, with my donation, I include a note (or send an email separately) asking that they send me no mail solicitations and that they not share or sell my information. (I tell them email is OK, but you could also ask them not to email you.) This almost totally eliminates the mail flow, and if I do get a mailing, I just send another brief, polite email asking them to stop. I probably now get a total of 2-3 mail soliciations a month, mostly from places that I haven't given to.
posted by Mr.Know-it-some at 10:30 AM on March 30, 2012 [1 favorite]


As someone who processes gifts for a nonprofit, I'm actually going to suggest that you set up a monthly donation. It's easy, you don't have to remember it, and it drastically cuts down on the amount of appeal letters the nonprofit will send you. :) Plus, systems around online giving are really automated, so typically a staff person won't have to spend time processing a check, bringing it to the bank, coding it for the accounting team, etc.

Personally, if I were looking at $5,000/year, I'd probably set up monthly donations of $50-100 for 4 or 5 charities and save a bit so I could make a special gift (to a new org, or a nice donation on top of my monthly gifts) at the end of the year.
posted by JannaK at 4:08 PM on March 30, 2012 [2 favorites]


I have my workplace deposit the money I'm planning to give to charity to a completely separate account. All the money in that account is intended for charity. At that point, I can give throughout the year, or whatever I want because I've already set aside the money and will give it all to charity eventually.
posted by garlic at 7:55 AM on April 3, 2012


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