The unsolicited address labels are piling up. The phone is ringing. The requests are in. Hey – did someone just ring your doorbell? Yes, it’s the season of giving, but that doesn’t mean you should give to every charity that knocks on your door. We asked our panel of experts, Andrew Schrage, editor in chief of Money Crashers, Ray Knott, independent philanthropic advisor and owner of Mission Based Giving and philanthropic consultant and Fullanthropy owner Catherine Chapman, to weigh in with their tips.
- Choose well and choose wisely.
“Choose your charities like you choose your friends,” advised Chapman. As with all relationships, some will be a great fit while others simply don’t match. Think about your values. What has made an impact in your life? What do you care about? “Create a conversation about what matters to you and your family,” added Knott, who sits down with his own family on an annual basis to talk about needs in the community and the charities they support. If you’re having trouble or feel overwhelmed by the number of worthy causes out there, think about general categories like youth, homelessness, health or the environment first. Then you can begin to drill down and research charitiesthat are the best fit with your family’s values.
- Start locally.
Time is money, and when it comes to charitable organizations, if you give both your time and money, your gift is compounded. Most nonprofit organizations readily welcome volunteers, and it’s a terrific way to find out what a charity is all about. Furthermore, advises Knott, if you’re worried about where your donations are going, locally is the way to go. Smaller marketing budgets typically mean that your dollars aren’t going toward the latest dial-a-thon campaign.
- Focus on 2 – 3 charities at a time
. All three of our experts recommend that you focus on fewer charities rather than spreading donations out over many organizations, and here’s why: Giving to fewer organizations is easier to track come tax time, and it also gives you an opportunity to feel more closely connected to the mission of each charity.
- Practice your “elevator pitch.”
It’s OK to say no, especially when you’re saying “yes” somewhere else. “Although you may be giving to fewer organizations as a result of your giving plan, those charities are likely to be able to make more of an impact in the issues that are important to you than if you donated the same amount to a lot of charities,” said Chapman. Mom of two and owner of Satsuma Designs organic baby products, Jennifer Porter explained her family’s charitable communications strategy: “We only give money to charities through our church. When I say this, I’m telling the truth, and it makes it easy to say no when other requests come in. People get it.” Whatever your cause and wherever you give, all you have to do is politely explain your giving plan. Who knows, maybe someone you know will be inspired by your words and be prompted to donate to the same charities too.
- Don’t feel bad
that you can’t support every cause, and keep in mind that marketing tactics prey on your guilt. Sure, it’s great to donate to your friend’s fundraising efforts because chances are, they will support you in return. But generally speaking, “good charities want champions that understand the cause, feel equally passionate about it, and are willing to donate” said Chapman. “Charities that guilt you into giving, do not care about you just your wallet and are not appreciative of your investment. Even Warren Buffett and Bill Gates say no without guilt.” Consider Andrew Carnegie, who even wrote a famous essay on this topic, called “The Gospel of Wealth.”
- Be generous, but not foolish
. Think of charitable giving as part of your overall financial plan. “Come up with a number that you feel comfortable with at the beginning of the year based on your estimated income and expenses” said Schrage. “For me, it is 5 percent of my annual income. For others, it could be lower or higher. I also recommend that individuals focus on becoming debt-free first. The last thing you want is to dig yourself further into debt as a result of your efforts to help others.”
- Make sure the charity is legit
by looking them up via a quick online search, requesting written information and checking for charity scams and fraud. Aptly put, the Federal Trade Commission says on its website: “Your charity dollars are an investment in your community, the nation, and the world. It’s wise to be cautious when making your donation decisions so you can avoid scam artists who try to make money by taking advantage of your generosity.” The FTC lists several helpful tips on its Consumer Protection Charity Checklist.
- Eliminate the junk mail
and unwanted phone calls by getting off lists and telling charities not to call youor to limit their calls and mailings once or twice per year. If the organization doesn’t respect this, or you have no intention of supporting a particular charity, you are doing a good service by politely telling them.
Unsolicited items like address labels, notepads and other trinkets are yours to keep whether you donate to that charity or not but as Chapman noted, “It is not an example of good stewardship of the resources that they have been given. After all, do you want to donate money so that they can send your neighbors those same trinkets?”
- Avoid offers and free gifts.
That free tote bag, coffee tumbler or your name on a wall shouldn’t be the motivator in your decision-making. Think about other ways you can support an organization without the gimmicks. At auctions, for example, you can only claim a charitable contribution deductionfor the excess amount of the purchase price you paid over that item’s fair market value. In other words, it’s often better for you – and the organization – if you just write that check, no strings attached.
- Stay organized by keeping records
and receipts for tax and budgetary purposes. “I absolutely believe that the tax advantages make your donations worth every last penny, said Schrage. “In a sense, your charitable contributions’ tax deductionsare like a donation subsidy from the government. Just make sure that you get receipts for all of your giving throughout the year, whether it is money or non-cash items, and always make sure that the charity you are giving to is a qualified charity according to the IRS.”
Do you follow any of these tips for your charitable giving?