Monica writes in:

Last year, I took the advice of my older brother and made several charitable donations during December to help out my taxes for the year. When I filed them, I did get a return, but it wasn’t nearly as big as I expected. Are charitable donations really a big deal or did I do something wrong?

Charitable donations do provide a reduction in your taxes, but it’s not the huge reduction that many people often think they are or expect that they are.

To understand the benefit that charitable donations give to your taxes, first you have to understand how income taxes work. This is something that many people surprisingly misunderstand.

When you earn ordinary income from working at a job, you have to pay income taxes on it. We all know that, of course. What many people don’t quite understand is how the amount you pay is calculated.

Let’s say you are a single person earning $50,000 this year (we’re not going to worry about issues like personal exemptions and other tax issues that would further complicate the issue – we’ll just look at $50,000 in taxable income after such things). To figure out how much taxes you have to pay, you have to look at the income tax rate table. For 2011, it looks like this for single people (there’s a different table for married couples):

For income between $0 and $8,500, you pay 10% in taxes.
For income between $8,500 and $34,500, you pay 15% in taxes.
For income between $34,500 and $83,600, you pay 25% in taxes.
For income between $83,600 and $174,400, you pay 28% in taxes.
For income between $174,400 and $379,150, you pay 33% in taxes.
For income over $379,150, you pay 35% in taxes.

So, as I mentioned, we’re looking at a single person who makes $50,000 a year.

For the first $8,500 of that (the $0 to $8,500 bracket), that person has to pay 10% of the income in taxes. That’s $850 for this bracket (that’s 10% of $8,500).
For the next $26,000 of that (the $8,500 to $34,500 bracket), that person has to pay 15% of the income in taxes. That’s $3,900 for this bracket (15% of $26,000).
For the rest of his pay ($15,500), that person is in the $34,500 to $83,600 bracket, which means that person has to pay 25% of that portion of his income in taxes. That’s $3,875 for this bracket (25% of $15,500).
To figure up the person’s total tax bill, they simply add together those pieces, which totals $8,625. This person will owe $8,625 on their taxes this year.

Now, how can a person lower that amount? The most common way is through deductions. The government gives out standard deductions each year on a person’s taxes. For 2011, that amount is $5,800 for a single person. How that works is that you simply subtract that deduction from the total amount of income the person earned for the year. So, this person’s income for tax purposes is actually $44,200.

So, let’s look at this person’s actual taxes after their standard deduction.

For the first $8,500 of that (the $0 to $8,500 bracket), that person has to pay 10% of the income in taxes. That’s $850 for this bracket (that’s 10% of $8,500).
For the next $26,000 of that (the $8,500 to $34,500 bracket), that person has to pay 15% of the income in taxes. That’s $3,900 for this bracket (15% of $26,000).
For the rest of his pay ($9,700), that person is in the $34,500 to $83,600 bracket, which means that person has to pay 25% of that portion of his income in taxes. That’s $2,425 for this bracket (25% of $9,700).
To figure up the person’s total tax bill, they simply add together those pieces, which totals $7,175. This person will owe $7,175 on their taxes this year.

So, that person’s standard deduction on their taxes actually saved him $1,450. The standard deduction may be $5,800, but it only saved the guy $1,450 because the deduction just reduces his total income for the year in terms of taxes.

Charitable giving works exactly the same way. Every dollar you donate to a registered charity becomes a deduction on your taxes, just like a standard deduction.

Let’s say the person above donates $5,000 to his church (a 10% tithe) and $2,000 to Doctors Without Borders and another $2,000 to L’arche Tahoma Hope. That’s a total of $9,000 in charitable donations.

So, this person makes $50,000 a year. From that, he can either subtract his standard deduction ($5,800) or he can subtract his charitable donations ($9,000). This means that his taxable income – the amount he pays on his federal income taxes – would likely be $41,000. Let’s look at his taxes now.

For the first $8,500 of that (the $0 to $8,500 bracket), that person has to pay 10% of the income in taxes. That’s $850 for this bracket (that’s 10% of $8,500).
For the next $26,000 of that (the $8,500 to $34,500 bracket), that person has to pay 15% of the income in taxes. That’s $3,900 for this bracket (15% of $26,000).
For the rest of his pay ($3,700), that person is in the $34,500 to $83,600 bracket, which means that person has to pay 25% of that portion of his income in taxes. That’s $1,625 for this bracket (25% of $6,500).
To figure up the person’s total tax bill, they simply add together those pieces, which totals $6,375. This person will owe $6,375 on their taxes this year.

In other words, this person’s $9,000 charitable contribution saved them $2,250 on their taxes. That’s because the person was in the 25% tax bracket before the donation and in the 25% tax bracket after the donation, which means that they essentially saved 25% of their donation on their taxes. (Sometimes, a donation will drop you to a lower tax bracket, which is fine.)

However (and this is where the readers pointed out my mistake in the original version of this post), the standard deduction would save the person $1,450. The actual savings – compared to the standard deduction – for this charitable giving is $800. Charitable giving works best as a tax deduction if it’s coupled with other deductions, such as home mortgage interest.

So, charitable donations are a great thing and they do offer some tax savings, but you don’t save $1 for every dollar you donate. Instead, you often reduce your tax bill roughly a quarter or so for every dollar you donate. That’s still a great little bonus.

Hopefully that clears things up for you!

The post Charity and Your Tax Bill appeared first on The Simple Dollar.

How do you manage the balance between saving for the future and for your own personal goals with a desire to give to those less fortunate than you? It feels like they’re going in opposite directions.

To an extent, this is a struggle for virtually everyone in the first world. Everyone reading this lives well into the upper half of the world in terms of standard of living. We constantly spend money on aspects of a standard of living that far outstrips anything in the lifestyle of the poorest people in the world.

This is a philosophical issue I’ve worked on for a long time in my own mind and I’ve come up with a handful of conclusions about it.

First, it’s not really saving your money that runs in opposition to giving. It’s spending your money with reckless abandon. Money saved in an investment or in a savings account is still yours to use at a later time, but money spent on unnecessary things is money that’s essentially lost to you.

At the same time, the ideas that push me to be a saver are the same ideas that push me to reduce that unnecessary spending. The less you spend on unnecessary things, the more you’re able to save. Alternately, the less you spend on unnecessary things, the more you’re able to give.

So, what about saving versus giving?

There’s no reason not to do both. Many religions, for example, encourage their followers to give 10% of their income to the less fortunate. Other people happily donate to charities of all kinds. These kinds of gifts help to make a difference but don’t cause the people who give to fall into financial hardship to make the donation. They’re very capable of saving an additional portion of their income beyond what they give to charity.

Having some savings means that you have less chance of becoming reliant on charitable giving. This enables the money that’s given to charitable organizations to go to other people who need it instead of you. This is, in itself, a charitable act.

Many large savings goals retain their value when reached. My wife and I are saving for a large home in the country. When we buy that land and build that home, we do so with the knowledge that we will some day be able to sell it and recoup our investment. It’s not lost money.

There’s no reason not to pass on a large portion of your estate to those less fortunate. My wife and I plan to leave behind only small portions of whatever estate we leave to our children and grandchildren and have the rest go to charitable groups. This enables us to protect ourselves while we’re living from draining charitable programs while delivering the wealth we’ve accumulated to charitable programs when we’re no longer around.

Charity is more than just donating money. Time donation is another powerful form of charity. Simply giving some of your hours to fulfill the needs of a charity is a powerful gift. Along those same lines, giving your skills is another powerful non-monetary gift you can give, one that translates into a monetary savings or pathway to more donations for the charity.

When I think about my savings and my charitable giving, I try to think about where exactly each dollar of mine will end up. If I know that there’s a good likelihood that the dollar will remain in my estate for the rest of my life (and eventually be donated after my passing) or be used in some method that will prevent a charity from investing in me, I feel good about how the dollar is used. It’s yet another motivation for me to make wise moves when it comes to what I do with every dollar that comes into my life.

The post Balancing Giving and Saving appeared first on The Simple Dollar.

Via a private message, Colleen said “I have been thinking about donating to [Charity X]. How do I know if they’re legitimate or not and if they put the money to good use?”

Obviously, I edited out the specific charity that Colleen mentioned, as it’s not particularly a charity I wish to promote publicly (as I discussed with Colleen, the specific charity she mentioned does some work that I don’t agree with). Instead, I’ll discuss how to research a charity from a more neutral standpoint.

What You Need to Know
There are several key questions you should have the answer to before donating a significant amount to any charity.

What is the charity’s stated mission? Why do they claim to exist? This is a fundamental point. If they claim to exist for a reason you don’t wholly and deeply agree with, you should focus your money and energy on other charities.

Is this organization actually a charity? You need to know if the organization is a certified 501(c)(3) nonprofit organization. This means that they’re held to certain legal standards, including some restrictions on how they spend their money and how much information about their inner workings they have to share, as well as their tax status (which affects whether you can deduct any donations you make from your own income taxes).

Who runs the organization? Is there a president? A board of directors? A chairman? Who are these people? Are they legitimate folks or people of dubious background?

Do they disclose their financial information? The more open a charity is about their internal finances, the more legitimate it tends to be. An annual report (with independent auditors) is a must and it should include things such as a highly detailed budget and explanation of where all of the money goes. Ideally, they also should make available some of their IRS filings, such as Form 990.

What does your donated dollar translate into? If you give them a dollar, how many cents of that dollar go to various uses? How much goes to the actual cause? How much goes for adminstrative costs, promotional costs, and so on? Obviously, some of your money will need to go to keep the doors open, but most of your money should be going to the cause itself. It’s also worth noting how exactly the money used for the cause is used. Who are the actual beneficiaries? Where are the actual beneficiaries?

How to Find It
You can find most of this information from the comfort of your web browser.

For starters, visit the web site of the charity. There, you should be able to find such information as the mission of the charity, the most recent annual report from the charity, and information about the management of the charity (who’s in charge, in other words).

Next, study that annual report. It should include a very detailed budget explaining where every dime of their money goes and what proportion of it goes into the cause itself. Again, you shouldn’t expect 100% of the money to go to the cause, but a high percentage is expected. You’ll also want to make sure that the budget is audited (check for information about the auditor).

After that, check up on the people involved. At the very least, do a few Google searches on the chairman of the organization and the board members just to see what you turn up. If they have a Wikipedia entry, be sure to read it over. Also, Google the stated auditor of the charity, and you may even want to contact the auditor to make sure that they actually did audit the organization’s books.

Finally, stop by Charity Navigator. Charity Navigator is a wonderful tool that provides a wealth of information about many charities, particularly larger ones. They analyze charities in comparison to other charities of the same type and offer ratings that show how these charities use their money and resources compared to similar charities. Don’t sweat it if the charity you’re looking for isn’t there, as many smaller charities are not listed. However, most large charities are listed. Some charities have glowing reports, while others give off dire warnings.

Together, these tactics and tools should give you a pretty clear picture of the charity you’re considering donating to.

The post How to Investigate a Charity appeared first on The Simple Dollar.

I really appreciate it. I deeply appreciate it.

Right now, though, I’m in a financial situation where, for the time being and for the near term, I don’t need that money. I actually live the things I write about on this site. My financial situation is relatively secure (nothing is absolutely secure, but I’m happy with where I’m at).

Yet, at the same time, I deeply understand the desire to give. I often donate to websites and web tools that I use or find valuable or find inspiration, just because I know how much work and passion goes into putting that out there.

I’ve been thinking quite a bit about how to handle this. I thought about my life and the people in it. Pretty quickly, the right answer came to me.

Three members of my close family all work for the same charity. This charity does tremendous life-chaning work here in the United States on what’s often a shoestring budget.

This charity is L’arche Tahoma Hope in Tacoma, Washington.

L’arche Tahoma Hope is a charity that runs a series of homes in the Tacoma area. These homes – mostly just ordinary houses, but one is a small farm – are places where small groups of developmentally disabled adults live along with L’arche volunteers and workers. These developmentally disabled individuals are not able to live on their own and often come from families who are extremely challenged to care for them.

What L’arche does is provide a community situation for these individuals to live in. The people who work for L’arche live in these homes right alongside the developmentally disabled members of L’arche, helping the people there live the most full life possible in a community of their peers, where everyone is valued regardless of their disability.

When I’ve visited there, I’ve been amazed to see how developmentally disabled people have had the opportunity to live a full, social, happy life where they have friends who view them as valuable equals, something that would be very difficult for them to have in almost any other situation.

You don’t have to spend much time there to see the enormous positive impact on the lives of the people who live there. At the same time, I’d be the first to admit that it takes someone with special skills and a special heart to do the work that needs to be done to make this possible.

Even a cursory look at their annual report – they leave their books pretty wide open for anyone to look – reveals that they manage to pull this off with a surprising lack of funds, considering they run four fully-staffed homes. They don’t waste money there, and they make use of every single dime they can get.

Please, if you’ve even considered giving a dollar to me or to The Simple Dollar in the past, channel that giving to L’arche Tahoma Hope. If you’ve ever wanted a small charity to champion, consider L’arche. Every dollar helps.

You can visit the L’arche Tahoma Hope website or jump directly to donations through JustGive.org.

Thank you.

(I not only wrote this for today’s post, but for the ability to share this link in the future with people who write to me asking to donate money.)

The post A Simple Request appeared first on The Simple Dollar.

Money can often be a very tight resource, but it’s far from the only resource you have. We all have so many things available to us to share with others that it only takes a moment of thought or effort to make a real difference in someone else’s life.

Here are twenty things anyone can donate to make the world a better place – and put a little bit of extra spring in their step – without blowing up their budget. Even better, many of these ideas will help you clean out your closets and declutter your home a bit. If you’re in need, this list might even help you find a charitable cause that can help you.

Donate your hair Locks of Love (http://www.locksoflove.org/) is a non-profit that provides hairpieces to disadvantaged children suffering from long term medical hair loss. It’s easy to donate – just grow your hair out to ten or more inches in length, cut it off, stick it in an envelope, and help out a kid that could really use a boost.

Donate your blood and/or plasma The Red Cross (http://www.redcrossblood.org/) runs blood drives in your community quite regularly, and many large communities have places where you can always donate. Keep an eye on your community calendar, then stop by and donate. It’s just a little prick on your arm, then you get a cookie and a drink and you’re on your way, while your blood is used to save someone’s life.

Similarly, donate your bone marrow Another renewable body resource you can donate is your bone marrow. The National Marrow Donor Program has a very detailed FAQ that discusses in detail the process of marrow donation.

Donate your vacation time Many workplaces make it possible to donate unused vacation time to people in dire need. Spend a day less at the beach next year and give that day to someone who is fighting a serious medical situation.

Donate your body space It’s all about the awareness for many charitable causes. Simply by having a band on your wrist or a ribbon on your lapel, you remind the people who see it of a charity and also let them know that there are people out there that passionately support the charity. Here’s a list of different charity awareness bracelets available.

Similarly, donate your bumper Get a big old bumper sticker describing your favorite charity and slap it right on the back bumper of your car. The next time you’re stuck in traffic, your car is increasing the mindshare of the charity you care about.

Donate your wedding dress Making Memories (http://www.makingmemories.org/) is an awesome charity that helps women with metastatic breast cancer live out their dreams. Many of the wishes granted by Making Memories involve weddings, so the charity makes great use of the wedding dress you’ve got hanging in your closet. Unused gowns are auctioned to earn more money for this charity’s work, so even if your dress doesn’t get used by a needful bride, it still can help them.

Donate your unused home repair supplies Did you buy too many shingles and now have a big pile of them just sitting in your garage? Got a few gallons of leftover paint from a job where the paint didn’t match or you overestimated your needs? Habitat for Humanity (http://www.habitat.org/) can put those resources to good use building homes for the needy instead of those supplies going to waste sitting in your garage.

Donate your flowers Got extra flowers after a wedding or other event? Donate them. Contact your local florist or local hospital and ask about giving the leftover flower arrangements to people who need them for other events or who could really use them to brighten their day. You can do the same if you have flowers that grow around your home.

Donate your nasty old shoes Nike’s Reuse-A-Shoe program (http://nikereuseashoe.com/) (check that site out – it has a great video explaining what they do in great detail) takes old, nasty running shoes and turns them into materials for public playgrounds and basketball courts. All you have to do is send ‘em in!

Donate your voice LibriVox (http://librivox.org/) creates free audiobooks for the public domain, which enables everyone to have access to great free listening materials. Such books are used as educational materials for the visually impaired, radio material for public stations, and countless other good uses. You can participate by volunteering to read and record a public domain book. You’ll learn something and make the world a better place.

Donate your old carpet Many animal shelters will accept donations of old, clean carpet for bedding for the sheltered pets. Contact your local shelter the next time you update your carpeting and see if they can put that old carpet to use.

Donate your cupboard excess or your extra garden vegetables If you’re anything like me, the next time you clean out your cupboards, you’ll find a bunch of items way in the back that will make you wonder if you can ever possibly use them before they expire. These are perfect items to donate to your local food pantry, where someone in need will have those items on their dinner table this week.

Donate your old computer Many charities would love to have that old computer of yours. It might not be up to snuff for watching downloaded high definition movies, but it’s perfectly good enough for a church to install Linux on and use for accounting purposes. Ask around at the local charities you support and, if you can’t find a home for it, ask TechSoup (http://home.techsoup.org/), which facilitates technology donations for nonprofit groups.

Donate your aluminum cans Our local high school has several groups that go through the neighborhoods once a year and ask for aluminum can and bottle donations. We simply store our used cans and bottles in a bin under the sink and when these groups come around, we gladly hand our cans and bottles over. If you don’t have such “to your door” service, many national groups facilitate the collection of cans and bottles – almost every Habitat for Humanity office will accept can and/or bottle donations.

Donate your used books Better World Books (http://www.betterworldbooks.com/) accepts donations of used books, which they then sell and give some of the proceeds in support of global literacy. If you have a bunch of books sitting around (and PaperBackSwap doesn’t excite you), this is a great way to turn a big box of used space into children who can read.

Donate the old stuff in your medicine cabinet Got medications you no longer need (especially sealed items that you never got around to using)? Got items to help you treat a condition that you’ve overcome? World Medical Relief (http://www.worldmedicalrelief.org/) will happily take those items and distribute them in a non-discriminatory fashion to people in real medical need.

Donate unwanted suits and business clothes Everyone has a suit or two in their closet that they rarely wear. Yet, at the same time, there are people out there beating the pavement, looking for work, and they can’t afford to dress for success and impress their potential employers. Two great charities, Dress for Success (http://www.dressforsuccess.org/) and Career Gear (http://careergear.org/), do exactly that, transforming the suit taking up space in your closet into opportunities for life-changing success for people who are reaching hard for that brass ring.

Donate your eyeglasses One of the best things (in my opinion) that the Lion’s Club (http://www.lionsclubs.org) does is run their eyeglasses donation program (http://donateglasses.org/). When your prescription changes, you’ll get new glasses and your old ones no longer have any use. Give them to your local Lion’s Club and they’ll help someone out there in need with vision impairment.

Donate your old magazines Once you’ve read that copy of The New Yorker, check and see if there isn’t a place in your area that could put the item to use. Senior citizen’s centers are almost always happy to receive magazine donations. If that doesn’t fit the bill, try hospitals and libraries in your area.

One final thought: donate your body When you pass on, your life has ended, but you have the ability to give the gift of life to others because of the life you left behind. Donate your organs and tissues to people who can use them. OrganDonor.gov (http://www.organdonor.gov/) provides everything you need to know about the need for organs and tissues and about how easy it is to be an organ donor.

The biggest lesson from this list is that we all have a lot of resources within us and around us that are of value and use to others. Sharing them, especially when it’s “no skin off our backs,” does nothing but make the world a better place. It makes you feel better, too.

I’ve collected these ideas from many different sources over the years. There are many great sources for ideas similar to (and overlapping with) these, including How to Be an Everyday Philanthropist by Nicole Bouchard Boles, The Generosity Plan by Kathy LeMay, and Give a Little by Wendy Smith. If these ideas excite you, dive into these books for more ideas than I could possibly share.

The post Personal Philanthropy: Twenty Ways to Improve the World, Even If You’re Broke appeared first on The Simple Dollar.

My biggest “financial leak” is charities. I constantly see people in need and I feel deeply guilty if I don’t help them, especially since I know I have plenty of financial resources with which to help them. The result is that I end up with less money than I expected and it’s hard to make ends meet. I still feel guilty, though. What do you suggest?

Giving to others is a great thing. Giving to the right charities can have a profound positive effect on many lives and it can also make you feel really good about yourself and the positive impact you have on the world. If you have the financial resources to give, I strongly encourage you to do so.

However, I don’t feel guilty about charities that I don’t give to. There are more good causes out there than I can possibly give my money to. Because of that, I know that I have to decide between various causes.

For us, that’s an important decision. We use a few criteria to determine what charities to give to.

The only charities we give significant money to are either ones where I directly sit on the executive board, immediate family members are deeply involved with, or we’ve been able to strongly certify how their money is spent. If one of those three are not true, we don’t give them money.

If a charity attempts to use a sense of guilt as a reason to convince me to give right now, I don’t like it, to the point that I resent the charity and actively do not give to them.

For one, if they’re using such tactics, they’re investing a lot of money and energy into marketing, not into helping the people they’re trying to help. If I feel guilt in response to a charitable plea, I know it’s marketing at work above all else.

My dollar to a charity very rarely goes 100% to a cause. Every charity has overhead in terms of hiring people to handle the donations, handle the taxes, and handle the distribution. However, but I want the vast majority of it to go to the cause I’m supporting. I also prefer to decide on my own what causes are most deserving of my money without guilt-based marketing pleas. Whenever I see a sob story, both of those principles are violated. When I reflect on it, I usually wind up irritated at that charity, actually.

Our solution is a charity budget. Once a year, we sit down and evaluate what causes we want to give to far away from guilt-based charity advertisement. We use sources like Charity Navigator to help us determine what charities will actually do with our donations and we make a pretty firm decision about our giving.

Whenever I see pleas for charitable giving, I simply remind myself that (1) this is marketing at work and (2) we’ve already given a substantial amount this year and have already decided what to spend the rest on. These two facts knock down any focus group designed charity marketing that we see.

Don’t feel guilty about charities you can’t afford to give to. Know what you can afford and plan it in advance. Recognize that the heart pangs you feel are just the result of marketing intended to make you feel that way. Walk away and make your decision with an unclouded mind.

Good luck.

The post Guilt and Charitable Giving appeared first on The Simple Dollar.

What Is Angel Food Ministries?
Angel Food Ministries is a non-profit group that distributes low-cost food options in many communities (a typical basic box from Angel Food Ministries costs $30 and has approximately $55 worth of groceries in the box).

Most of the funding and organizational structure of Angel Food Ministries is handled through evangelical Christian churches in the United States. Many churches serve as distribution centers in local communities, and each box contains a leaflet that outlines some of the teachings of Jesus Christ.

What’s in the Box?
The May 2009 menu provides a clear example of what a box from Angel Food Ministries will provide:

.5 lb. Lean Chopped Beef Steaks (5 x 8 oz.)
5 lb. Leg Quarters
2 lb. Chicken and Corn Bread Stuffing Casserole (Ready to Cook)
28 oz. Salisbury Steak Dinner Entrée
1 lb. Boneless Pork Chops (4 x 4 oz.)
1 lb. Corn Dogs (6 ct.)
12 oz. Deli Sliced Ham
5 oz. Chunk Light Tuna in Water
32 oz. French Fries
1 lb. Sweet Corn
15 oz. Musselman’s Apple Sauce
15 oz. Pears (Product of U.S.A.)
8 oz. Dinner Roll Mix (Makes 8 Nice Rolls)
7.5 oz. Mac ’n Cheese
32 oz. 2% Shelf Stable Milk
Dozen Eggs
Dessert

This box is available for $30.

At first glance, this is a pretty good deal, and if your primary concern is getting food on the table at a very low price, this is likely a great option for you.

However, if you dig a little deeper, some of these options may not be the best value for your dollar. For example, I would be hesitant to feed several of the options on that list to my children on any sort of consistent basis, at least not without some careful inspection of the actual nutrition facts and ingredients of those items (the corn dogs, the “dessert” item which is often something like Twinkies or Moon Pies, etc.) Under that perspective, though, if I were to get the box, then throw out a third of the items, I might as well simply go to the grocery store at my own convenience and choose the exact items I want for my $30. Other writers have come to largely the same conclusion – it’s a value on the surface, but the quality of items may not be up to many personal standards.

Some would argue that I am somewhat looking a gift horse in the mouth here, and I agree that I am. From my perspective, this box is one option for spending $30 in food for my family. Depending on your financial situation and your food priorities, this can be a great bargain. It mostly depends on the type of value you’re seeking.

What Angel Food Ministries Does Right
One area where Angel Food Ministries hits a home run, in my opinion, is with some of their optional packages. You can choose an optional package as an addition to the basic package, as listed above. For example, one of their optional packages for May 2009 is the “Fresh Fruit and Veggie Package”:

1 head Premium Fresh California Iceberg Lettuce
1 head Premium Fresh California Romaine Lettuce
1 5 oz. Package Fresh Gourmet Classic Caesar Croutons
1 Package Wiley’s Citrus Garlic Salad Seasoning
1 lb. California Cello-Pack Carrots
2 each Premium Jumbo Vidalia Sweet Onions
1 each Premium Jumbo Red Onion
1 6 oz. Bag Premium Fresh Florida Red Radishes
1 head Premium Fresh Green Cabbage
3 lb. Premium Idaho Baking Potatoes
3 lb. Premium Tree-Ripened Valencia Oranges
3 lb. Premium Washington State Red Delicious Apples
1 each Premium Large Vine Ripened Honeydew Melon
AFM May 2009 Fruit and Veggie Recipe Sheet

For $22, that’s a very strong deal, especially if you want to get fresh produce on the table and you’re struggling to make ends meet.

Another strong advantage of Angel Food Ministries is that they often distribute in central community locations (like churches) that are quite accessible for many families that may not have access to transportation to get to the grocery store. Using a church as a distribution center means that the distribution often occurs in the middle of a residential area, making it easier for many people to access the food – particularly those who need it the most.

Is It Right To Use This Service?
In terms of using this service, my biggest question is whether it’s a justifiable option. Quite obviously, this service is trying to target lower-income families who can really use the savings provided by the options made available through the ministry.

The question is whether or not it’s ethical – or socially appropriate – for a person with a higher income level who is simply trying to maximize every cent to take advantage of this service.

On the one hand, the service makes it clear that it’s intended for everyone. There are no requirements at all for people to take part in receiving food from Angel Food Ministries, and they claim that there is plenty of food to go around.

On the other hand, if you’re in a situation where you have a reasonably large monthly food budget, why would you choose to use this service? If you are making it your goal to feed yourself and your family a well-rounded, high quality diet, many of the options in the basic box from Angel Food Ministries probably do not fit the bill, making it much less of a savings for you.

Thus, I think the question really comes down to your own personal food choices. If you are in a tight financial place and the goal is to get sanitary and diverse food options on the table at the lowest cost possible for your family, Angel Food Ministries is where you should go – and you’re exactly the type of person the service was designed for. On the other hand, if you have enough of a food budget that you can make detailed conscious choices about what goes on your table and what does not, you’re likely better off going to the grocery store and the farmer’s market – which, again, is appropriate.

In other words, Angel Food Ministries somewhat self-regulates – if this is a good deal for your life situation, they’re ready and willing to help. For me, though, I’ll stick with my own meal planning, which gives me much more control over what goes on my table (albeit at a higher price – a price I’m willing to pay).

Angel Food Ministries as a Charity
As you can see, in large part, I support the work that Angel Food Ministries does on the ground in getting low cost foods to people who really need them. In fact, I had considered donating to Angel Food Ministries in the past – and, as I’ve mentioned before, that means I sat down to research how the charity itself worked.

What I found sent up a few pretty big red flags for me.

First of all, the charity is not listed with Charity Navigator, an impartial service that evaluates charities in terms of how they manage themselves internally and how much of their revenue actually goes towards charitable work. This is a basic step that many charities of any size take on – it’s the honest way to conduct a charity.

Second, the charity is being investigated by the FBI for reasons that are not being made clear by either the charity or the FBI. Here’s some details on the investigation.

Perhaps the biggest red flag, however, comes from MinistryWatch, a watchdog group for Christian-affiliated charities. It issued a “donor watch” for Angel Food Ministries, stating the following:

Angel Food Ministries is marketing to help individuals that are on the low economic side of the scale and in “need”; however, the leadership for the organization has higher salaries than the norm. In addition, the higher salaries consist of the leadership of individuals that are related. This is just for the known year of 2006, it is unknown of the more current years.

1. Wesley J. Wingo: $588,529
2. Linda Wingo: $544,043
3. Andrew Wingo: $529,014
4. Wesley Wingo: $454,673
5. L.M. Wingo: $384,694

Let alone the fact that these five people are related, the individual salaries are above and beyond what charities typically pay their employees, even large charities at the highest management levels.

Obviously, these discoveries are much more of interest to people who are considering donating to Angel Food Ministries. This should in no way prevent you from using Angel Food Ministries in your community.

My Final Take
On the ground, Angel Food Ministries provides a good service that many people really need – a lot of food at a very reasonable price at the expense of flexibility. For someone in a poor financial situation, Angel Food Ministries can really be a godsend.

However, as a broader charity, I would not donate to Angel Food Ministries when there are many highly ethical charities out there to contribute time and effort to. In many larger cities, there are local versions of Angel Food Ministries that you can donate to or be involved with – just ask around in your own community.

The post Some Thoughts on Angel Food Ministries appeared first on The Simple Dollar.

There was a young boy there, about six years old, and he was climbing out of a dumpster behind an apartment building. He was dressed in a dirty tank top and shorts and was barefooted. In his hand, he had a wadded-up fast food bag. When he hit the ground, he ran around to the far side of the dumpster, opened up the bag, and pulled out a handful of french fries, which he stuffed in his mouth as though he were starving.

I have never in my life felt so compelled to help someone out, but I didn’t know what to do. I looked around and spied a McDonald’s about a block away and so I walked over near the child and said hello to him. He looked scared and started to run away.

I told him loudly that I wanted to buy him some food. He stopped and looked back at me for a minute. I told him that I was going to go down to the McDonalds down the street and buy him some food and that I would come back and leave it by the dumpster. He could come and get it if he wanted.

I decided to do it this way because I figured the kid wouldn’t follow me there and I also didn’t want to create the appearance that I was abducting him. He seemed to understand the arrangement, so I walked down to an ATM, withdrew $20, went to McDonalds, bought about $15 worth of food (thinking he could perhaps share some with his mother or any siblings or friends he might have), and put the change from my twenty dollar bill in the bag – four ones and some coins.

I came back to the dumpster and the boy was gone – which I kind of expected. I put the bag on the ground by the dumpster, looked around, and walked away. I watched for a little while, but I never saw the boy come back. I ended up just leaving the food there in hopes that the boy would eventually come back and find it, but to this day I don’t know if he did or not. I like to think that he came back, found the bag, took it to his mother and his little sister, and they were able to at least get some calories in their system to sustain them for a little while.

This experience has stuck with me for more than a decade now. I’ve seen some situations where desperate need was quite obvious, but never again has anything stuck with me quite like that barefooted boy squatting on the ground beside the dumpster eating rotten french fries.

There are so many situations that we come across in our lives where people could be helped out with just a little help at the right moment. I’ve seen a single mother (with two kids beside her) offering to sell the wedding ring on her finger outside of a grocery store. I know an elderly couple who have been very close to having their electricity cut off this winter. A close friend told me about a food pantry that simply ran out of food and had to turn people away at the door recently.

Lately, I’ve started carrying more cash in my wallet than I ever have before. Each week, I put a couple twenty dollar bills in the back pocket of my wallet and rarely do I spend them. Instead, I just let this cash accumulate over time until I find a reason to spend it.

I call this my “giving pocket,” and it’s already begun to make a difference in how I see these kinds of situations.

It’s pretty simple. All I do is keep cash in that pocket and wait until the right moment comes. Inevitably, every few months, I come across a situation where someone is in desperate need – and instead of feeling helpless in the moment, I give them what they need to help with the problem.

I’ve written so often on this site about how I’ve been able to pull myself back from the financial brink and put myself and my family in a better financial place. Today, we’re stable and safe – but there are so many people who don’t share that safety and security, through no fault of their own.

The giving pocket allows me to seize the moment when I see someone that really needs help, and my financial success gives me the ability to keep the giving pocket full.

Perhaps, just once, I’ll be there at the right time to help someone who really needs it – and that one moment of human compassion and help will put them on a better path in life. If I can do that, then the giving pocket is worth far more than what I will have ever put in it.

The post The Giving Pocket appeared first on The Simple Dollar.

This year, my charity of choice is Jump for Joel.

What’s Jump for Joel? Jump for Joel‘s mission is to directly improve the baseline living conditions and educational opportunities for impoverished children in sub-saharan Africa, particularly in orphanage situations. They do this through directly sponsoring volunteers to travel to that region in Africa, as well as directly buying supplies for children in such situations (school supplies, toilets, etc.).

The charity was started in 2007 by a University of Illinois – Springfield student who spent two weeks on a volunteer project at the Gathiga Children’s Hope Home in Nairobi, Kenya. The conditions that the orphaned children lived in shocked her into action, bringing her to start Jump for Joel (named after one of the children in that orphanage).

I became aware of Jump for Joel through my sister-in-law, who spent much of the summer of 2008 volunteering in an orphanage in Romania. It was through this experience that she became acutely interested in what she could do here at home to help out children in such impoverished situations, and through that she became a part of the Jump for Joel team.

What have they done? Since its inception, Jump for Joel has raised almost $20,000 for the Gathiga Children’s Hope Home, which enabled the home to construct a two toilet outhouse, a stone entrance gate, bunk beds, a functional kitchen, a roof over the room where the children sleep, and floors and walls for the classroom and sleeping rooms. Currently, the project is focusing on buying doors and windows for the sleeping rooms, and they intend to branch out from there into other homes and orphanages in the area.

Jump for Joel also engages in partnerships with churches in the Springfield area for other fundraisers, raising money for school supplies for the children as well.

Why do I support Jump for Joel? As I’ve discussed before, I tend to lean towards supporting charities to which I have a personal connection, so I can personally witness the passion and sincerity that is being brought to the table.

With Jump for Joel, I can see this passion in the eyes and actions of my sister-in-law. Her deep passion for helping disadvantaged children runs through almost every aspect of her life, from her college major to her many, many years spent working for day care homes and centers (dating back to when she was twelve) and her time spent abroad volunteering to help disadvantaged children.

It often seems to me as though helping disadvantaged children is what she was born to do, and Jump for Joel is a framework in which she (and others with a similar perspective as her) can channel her work and passion to bring real change to children’s lives.

Another factor which drew me in as a fan of Jump for Joel is their openness. One only has to browse their website for a few minutes to see this – they write blog postings that detail their activities, produce podcasts to describe what they’re doing and share ideas, and actively respond to pretty much any question you might have as soon as you ask it. I find their YouTube channel to be particularly interesting, as it provides a great visual description of their mission that text and audio just can’t quite provide.

Explore the Jump for Joel website for a bit and you can just feel the passion bubbling under the surface.

How can you support Jump for Joel? The biggest thing you can do to support Jump for Joel is to donate a few dollars to them via PayPal. The money directly goes to improve the living conditions and further the educational opportunities of truly impoverished children.

If you don’t have money to spare but would like to keep tabs on their good work (and also promote the cause a little bit), you can follow their blog or become a fan of Jump for Joel on Facebook.

My wife and I are planning on giving several people gifts for Christmas that are donations in their name to Jump for Joel. I hope you’ll consider doing the same.

The post The Simple Dollar’s Christmas Charity for 2008: Jump for Joel appeared first on The Simple Dollar.

That desire is often counterbalanced by financial reality. When it comes down to the cold reality of making all of our bills for the month. many of us are pressed to make very hard choices that we don’t wish to make. Is it really fair to make a choice between a check to Habitat for Humanities and a check for our mortgage? Yet, quite often, that’s the type of choice many of us have to make.

My response to that is simple: give what you have. No one expects or wants you to put yourself in a deep personal crisis to give. Instead, give of those things which you have in abundance and wait until your financial life is in order to contribute money.

Instead, contribute of yourself in other ways. Here are six powerful ways to donate in ways that don’t force you into difficult and painful financial choices.

Give things you can make You might be pinched so tight that you can’t afford to drop a check in the collection plate, but you can take the pears from that pear tree behind your house and make several dozen jars of pear butter. Take those jars and give them to the organization you’d like to help for an auction or to give away to the needy. Another option: do what my father has always done. He grows an abundance of vegetables in his garden and gives much of the bounty away to others. What can you make (or grow) that has great value to others? Figure that out, step up to the plate, and give away the fruits of your labor.

Give your time Tempted to donate to public radio but scared it’ll put you in a tough spot with your bills? Offer to donate your time doing a menial task like answering the phone during pledge weeks. Offer to work as a receptionist a few hours a week for them. Your gift of time can often be much more valuable than the money you could scrape together.

Give your patience Most charities have menial tasks that no one wants to do. In lieu of putting your money in their hands, put your patience there instead. Recently, I did this myself by taking on the task of rewriting a very lengthy document that needed to be rewritten in order to maintain the legal status of an organization. It didn’t take smarts to do it – just a lot of patience and a willingness to jump through all of those hoops to get everything right. Perhaps you can show your patience by volunteering to help with preschool Sunday school classes or as an assistant one day a week with Head Start.

Give your compassion Hospice organizations often desperately need people with great compassion to step forward and help out with people in end-life situations. If you’re a deeply compassionate person, this is another spectacular way to give something special of yourself, a gift others with plenty of money in their pocket are often unable and unwilling to give.

Give your expertise Many people have strengths in a particular area – computer programming, paralegal skills, teaching skills, etc. These skills have great value to others and that’s why they can often help you to earn a solid paycheck. Applying these skills to a charitable organization can be even more valuable – if you can offer your programming skills to help an organization develop a key piece of software, you’ve given the cost of someone to consult for that piece of software, and that can be a sizable amount. Got skills with accounting? Serving as a free auditor for charities you care about can bring tremendous value to their door.

“Give what you can” doesn’t have to mean squeezing an extra nickel from a rock. Instead, take a broader look at things. What can you really give? When you find ways to give, you’ll find a great deal of additional fulfillment in life, often in ways you never expected.

The post Giving Outside the Box: Generosity on a Limited Budget appeared first on The Simple Dollar.

When we cast our bread upon the waters, we can presume that someone downstream whose face we will never know will benefit from our action, as we who are downstream from another will profit from that grantor’s gift.
- Maya Angelou

Giving Now

Many people argue on behalf of giving money now. I disagree – one should never give money to charity if it endangers their long term financial future. There, I said it.

If you give money to a charity, especially amounts large enough to put your own financial future at risk, you risk having to line up and take back charity money for yourself later on. You’re far better off making your financial ship very sturdy – but that doesn’t mean rampant consumerism is okay. It means pay off your debts and build some long term financial security and independence, so that you’re never at risk of having to eat charitable money yourself.

That doesn’t mean you do not have gifts that you can give. Give your time. Give your talents. Give your youthful energy. Devote a few evenings and a weekend each month to working for a charitable group, giving them your ideas, your energy, and your effort to make sure that the group’s work is done. It doesn’t matter what charity you work for – just find one that can utilize your skills and makes sense to your own personal values.

Giving Later

Andrew Carnegie, in his famous essay Wealth, argues on behalf of giving later:

Individualism will continue, but the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself. The best minds will thus have reached a stage in the development of the race iii which it is clearly seen that there is no mode of disposing of surplus wealth creditable to thoughtful and earnest men into whose hands it flows save by using it year by year for the general good.

In other words, the people who are already rich know how to accumulate wealth, and their best gift to charities is to keep using this knowledge to accumulate more wealth if, in the end, it is eventually bequeathed to the needy.

This philosophy is derided by many as being greedy, but I don’t see it that way. I think Carnegie is actually quite right, and I think he’s basically voicing the exact same philosophy that Bill Gates and Warren Buffett are espousing with the Gates Foundation.

To put it simply, if you have a gift for acquiring wealth, but you need those financial resources to earn more wealth, then you should not just sign over all of your assets to a charity while you can still use that gift. Instead, plan to bequeath what you have to charity once you can no longer use your gifts – in your dotage or after your passing. Alternately, you can devote time and money by bequeathing a large portion of your wealth to a charity then agreeing to serve as that organization’s treasurer, putting your wealth-building skills to work.

To me, this is charity in its purest form – people using their gifts, both monetary and non-monetary, to help charities.

Giving Both

My belief is largely this: give time now, give money later.

Early in life, the resource you have huge amounts of is time, not money. Thus, it makes sense for a young person to give their extra time to charitable work. Find a charity you actually agree with and spend some weekends and week nights working for them. Maybe you can volunteer to coach the community Little League team, or perhaps you can help hand out food at the food pantry. Maybe there are local committees that could use your input and attention, like a church council or a local school board or a political campaign.

On the flip side, younger people often don’t have as much money. They might be working at well-paying jobs, but they’re often facing huge debts from student loans and mortgages, and they also need to financially plan for their old age. Many are also loaded down with children who also eat into the pie and also need some planning for their future.

On the other hand, later in life, time is shorter. You might not be working and you might still be able to give your time and talents to charities, but you don’t have the youthful vitality of others. Often, your role is teaching others how to hold the reins.

However, late in life is when many people have the most wealth. It’s also the time when you can be setting up bequeathal plans, giving much of that accumulated wealth to people who may need it, both when you’re alive and after you pass.

Because of that, I generally believe that earlier in life, your time is your best gift, not your money. Your time can be used to provide all sorts of services, and your youthful vitality makes that time quite valuable, because most volunteer work really thrives on energy and focus. Take your money and do sensible things with it, ensuring that your family doesn’t have to use the charities, now or later.

Later in life, use that experience in both time spent volunteering and money saved to allocate some financial gifts. You’ll have a very good idea of good places for your money to go, plus you’ll have the experience to hand over the reins of your volunteer work to others in a sensible fashion.

Obviously, there’s no reason not to give a surplus of money now, nor no reason not to give a surplus of time later. The key is to look at what you have in terms of both money and time and give what makes the most sense, but never forget to give. There are many, many people not just in your community but in the world as a whole who could benefit from your help.

The post Giving Now Versus Giving Later: The Gospel of Wealth Versus Everyday Charity appeared first on The Simple Dollar.

Over the last forty eight hours, many people have sent me emails and messages asking what they can do to help. Many people see news like this on television, feel some pity for the people involved, but think there’s no way they can really help the situation. While it would be wonderful to have hundreds of thousands of people come to the area to help with sandbagging efforts, that’s only one way you can lend a helping hand to people in disastrous situations like this. You can help, wherever you are, when disasters like this strike. Here are seven things you can do right now to help out with this (or with any major disaster that may occur later).

Donate money to the American Red Cross In 1993, when the Mississippi River floods of that year wiped out my hometown, the American Red Cross was incredibly helpful to everyone in the town. Before the flooding, when the sandbagging was ongoing, they came to town with food and beverages for people volunteering to help sandbag, keeping us cool and strong. During those crucial hours after the levees broke, providing food, water, and assistance to everyone who needed it. Services like this don’t run on magic – they need your help. Kicking even a small $5 donation towards the American Red Cross can help immensely during any domestic disaster. Use the American Red Cross donation form and select “Where the Need Is Greatest.” Even a dollar can help get a bottle of clean drinking water to someone in Cedar Rapids, where there is no potable water.

Put your unused leave to good use Many large workplaces, like the federal government, allow people to give unused leave to others. Contact your HR representative and ask if you can donate some of your unused leave to people affected by the flood.

Donate blood to the American Red Cross, too If there’s a blood drive in your area, stop in and donate blood. When fighting floods, people can get injured badly by unexpected levee breaks and rushing water. Sufficient blood supplies are important. Here’s information on blood donation for the American Red Cross.

Donate unwanted items such as clothing, blankets, bedding, and so on to the Salvation Army After the flood waters began to recede, our town received huge bundles of donations from the Salvation Army – clothes, blankets, and so forth. These items helped many people start to recover from the disaster. If you have some old shirts and pants, some old blankets, or other bedding, drop them off at your local Salvation Army office and ask that they be given to flood relief (or another specific crisis).

Donate bottled beverages, soap, shampoo, etc. to a local church. You can also contact your local church and see if they can point you in the direction of any larger efforts – many church diocese and synods send large trucks of donated goods to disaster areas.

If you’re a spiritual person, include the flood victims in your prayers. Many people rely on their faith to handle disastrous situations. You can help with that by including victims of the flood (and other disasters) in your prayers. Even just a few moments of serious reflection and contemplation of their situation can be a powerful thing, because putting yourself in someone else’s shoes subtly changes not only your perspective, but can also affect their situation, too, as a result of any choices you make because of that contemplation. Pray and/or reflect for a moment on the flood situation, and react with your heart.

Consider National Guard usage when you vote – or get politically involved. When disasters like these floods and Katrina occur, they’re often made worse by a National Guard that’s stretched too thin with overseas deployments. Consider that issue when voting – we need a sufficient National Guard here at home to help out with disaster situations.

The real key is to just find what you have on hand and can easily give. A water bottle and a dollar bill can make a huge difference to someone out there.

The post Seven Things You Can Do Right Now To Help Flood Victims appeared first on The Simple Dollar.

L’arche Tahoma Hope is a small group of four homes in the Tacoma, Washington area. These homes open their doors to adults with mental development disorders, providing them a place to live in a communal environment with their peers and with a staff that lives on-site with them. A typical home consists of four to ten people – assistants plus “core members,” where core members refers to the developmentally challenged individuals living there.

I’ve personally visited one of these homes. The one I visited had six developmentally disabled individuals living there, along with five assistants. At any given time during waking hours, two to three of those assistants were always involved with working with the core members.

What did they do? The home had a very large garden, and the assistants and core members all worked together as a group in that garden, raising vegetables and flowers that they would either consume themselves or sell to the public as a fundraiser. The more technical tasks were performed by the assistants and they also provided a lot of emotional support and friendship to the core members, who were largely involved with picking the vegetables and weeding and such.

The group also made paper mache flower pots for the plants out of flour, colored water, and newspaper. These actually turned out quite well, and if it were not for the fact that I was thousands of miles from home, I would have purchased one for myself.

At meal times, all of the core members and all of the assistants that were present would eat together around a large table as a group, sharing food and talking about their day.

I will be the first to admit that I do not have the spiritual fortitude or patience to do this job. I simply could not live there with the patience required day in and day out, and I am deeply thankful that there are people out there who do have that kind of patience and caring for others.

The truth is that most people don’t have that level of patience and most families do not have the support structure that is needed to provide for individuals with mental development disorders. For the most part, these individuals come from loving families who simply recognize that they don’t have the patience or the ability to truly care for them.

These homes provide a quality of life for individuals with mental development disorders that they simply could not find anywhere else in the world. They’re in an environment with their peers, where they’re not seen as outcasts, and with individuals who care enough about their situation to wish to live there and help them in many one-on-one situations.

I know that if I had a child with similar disabilities, I would truly hope that in adulthood, they could find a situation like L’arche to live in, and I am truly thankful that such places do exist and that there are people out there with enough spiritual and mental strength to work and live there, making a better life for people who weren’t given the same tools and abilities we were given at birth.

If you’re thinking of making a charitable donation this year for Christmas, please consider donating to L’arche Tahoma Hope Community. Take some time to visit their website and find out more about the amazing and life-transforming work that goes on there.

Furthermore, I will match all donations by my readers, dollar for dollar, up to $1,000 between now and December 25, 2007. All you have to do is donate to L’arche Tahoma Hope Community via JustGive.org and then forward the receipt of your donation to me – you can delete any personal information from this receipt if you wish. So, if you donate $20 to L’arche Tahoma Hope this year, I’ll match it and that gift becomes $40, and so on.

If you’d like, you can read about my 2006 charity drive for the Child Abuse Prevention Center of Dallas County, Texas.

The post The Simple Dollar’s Christmas Charity Drive 2007: L’Arche Tahoma Hope appeared first on The Simple Dollar.

One big reason why we feel that the small donations are fine is that most charities are based on a model of receiving a lot of small donations. Their organizations assume – and operate – on the basis that there will be many out there like me and my wife,

Another benefit of the small donations is that we can support a lot of organizations that we believe in. There are many, many charities and organizations out there that we believe in and agree with the concept behind, and thus there are many that we have interest in supporting financially.

Even given those ideas, however, we’re leaning towards reducing the number of our charitable donations significantly in the coming year (down to just a very tiny handful), and donating much larger amounts to these charities. Here’s why.

The charities that we are most strongly tied to are either highly local or tied closely to our family. These charities are extremely involved on the local level, facilitating positive social work in the community itself instead of on a broader scale. They provide the opportunity for us to directly witness our dollars at work, as well as donate our own time if we so wish.

These charities tend to be much smaller than other charities. In one case, it is an organization that provides fulfilling living conditions for physically and mentally handicapped people in a specific community. In another case, a small, independent food pantry that provides food to people below certain incomes that actually work for a living – they target minimum wage earners with families, mostly, and provide them quite a bit of free, fresh food. In both cases, the organizational structure behind each of these is small.

These charities also enable us (and very close relatives of ours) to directly donate time and talent, as well. In every case, the charities are local enough that my wife and I – or members of our immediate families – can directly volunteer or work for these groups. This means that we have the clear opportunity to do even more than before – and spend our volunteer time and money working for the same goals.

In my eyes, the benefit of supporting local charities is the greatest of all because you can directly witness their good work – and even participate with your own effort quite easily. Because of this, our charitable donations next year will be much larger and focused on small organizations within communities where my family and I can potentially not just make a financial contribution, but a personal one as well.

I guess, in the end, Your Money or Your Life had a broader impact on me than I would have ever guessed.

The post The Charity Dilemma: Small Donations to Many or Large Donations to a Few? appeared first on The Simple Dollar.

I’ve chosen not to review these books for various reasons (mostly because I’m not too interested in reiterating someone else’s Christian preaching), but the popularity of these books and the messages that they carry do bring forth a very interesting point: what role does spirituality play in personal finance?

Most organized faiths have some variation on the idea in Matthew 6:24, which states that a person cannot serve both God and money. On one level, this idea makes a lot of sense – if the center of your life is financial gain, then that means that spirituality is not the center of your life.

On the other hand, if spirituality is at the center of your life, you should be spending your time doing what will produce the greatest spiritual good within yourself and within the world. What does that require? For some, it might be volunteerism; for others, it might be a life of spiritual leadership.

When thinking of this, I picture close friends of mine who have chosen this volunteer work or other social work for their lives. They all believe that they can do more for the world by working in situations where their efforts can directly be seen. Most of them are quite poor; they work in shelters or they work as a pastor at a small church or in child care.

On the other hand, look at the Bill and Melinda Gates Foundation. Bill Gates is the definition of capitalist – Microsoft’s strategies have been dissected over and over again. Yet what does he do with that wealth he has accumulated? He gives it away, enabling things that were basically impossible before his foundation appeared on the scene. He found another path to the same goal: helping the world.

Most of us are between these two extremes. We work at jobs that are much more financially lucrative than that of the volunteer, but almost none of us can hope to achieve those huge levels of wealth. Yet by our efforts, we can make a huge difference, too. Let’s say I were to set aside 10% of my income for the year for charitable giving, or all income over a certain limit. This could at least partially fund a social worker’s job – because of your giving, someone could spend their day making a difference in the world. Thus, someone with marketable skills that don’t translate well to public service can still give a great deal spiritually.

Similarly, a person may in fact choose to not give at all during their lifetime, instead amassing a large sum of money that, in their late years, could help fund a major public initiative of some sort – the Andrew Carnegie model without the self-naming hubris. If one spends their life working hard, making very good money, investing that money, and living frugally so that they can endow $10 million at the end of their life to endow a school in a very poor country, did they not live their life with spirituality at the center?

Different people have different talents and different ways to give of themselves. What matters is that you actually do give, whether it be working hard so that you can make a donation to help a cause or directly working for that cause. What matters is that you put your talents to work in the end for a cause that is important to you. To me, that’s what a spiritual life is all about.

The post Money, Spirituality, and Charity appeared first on The Simple Dollar.

While ruminating on this issue, I came across The Soul of Money by Lynne Twist at the library and I realized this book covered the exact thing that my sister-in-law was talking about. The pitch line on the back cover spelled it out: “In a consumer society that glorifies the pitch, the sale, and the insatiable appetite for more as a measure of self-worth, The Soul of Money asks us to step back, to examine our relationship with money, to assess our connection with core human values, and to change this relationship and, in so doing, to transform our lives.”

Thus, this book focuses in on ensuring that the ways we use our money are in line with the core values we hold in our lives. Before I even started reading the book (I let it sit on my dresser for a few weeks before cracking the cover), I spent some time thinking about my core values, and I realized that the small-scale value that is strongest to me is my family and the large-scale value to me is energy and nutritional independence. What could this book teach me about my own finances and how they relate to those two values?

Looking Deep Into The Soul of Money

Chapter 1 – Money and Me, Money and Us
The book opens with what could best be described as an introductory chapter, outlining how many people separate their soulful life (the one centered around their values) and their financial life (the one centered around their money). Within each world, they behave differently: the soulful life is usually full of following the things that really matter, being fair to others, and so on, while the financial life is full of greediness and petty behavior. But why does this dichotomy have to exist? Why can’t the soulful side be on the same page as the financial side?

The example of this that really struck home for me was when the author described their early marriage and how they handled children. Their soulful life told them that the children were the center of everything, but they spent almost all their time focused on their financial lives: buying expensive art, buying wines, going on fabulous skiing vacations, optimizing their careers, and so on, but in doing this they found themselves missing out on their child’s first steps and first words and such. They provided financially, but they didn’t provide emotionally, and thus their financial lives won out, for better or worse.

Chapter 2 – Into India: Heart of Hunger, Soul of Money
Money alone does not guarantee a fulfilling life, and a lack of money doesn’t guarantee an empty life. So why do people associate money with fulfillment? The real truth is that there is a disconnect between the two, and that gap creates most of the pain that people feel when it comes to a sense of not having enough money – or enough of any material good – and also from the sense of “selling out.”

The truth is that it doesn’t matter whether you’re rich or poor, you still have the capacity to make decisions that don’t truly reflect your ideals, and it is those repeated wrong decisions that leave people feeling empty and hollow. I liken this dichotomy to a recent choice I made: I was basically confronted with a direct choice between making money/focusing on my professional goals or following my values, and I followed my values. What happened? A truth was revealed to me, and it enabled me to actually accomplish both by letting my values lead.

Chapter 3 – Scarcity: The Great Lie
Most people have an innate sense that there is simply not enough: that explains not only why they are always striving to get a bigger piece of the pie, but why some people suffer in poverty and hunger. However, basic analysis of the situation shows that there is more than enough food to feed the world – and more than enough stuff in your life to bring happiness.

The myth of scarcity breaks down into three parts. First, the idea that there simply isn’t enough is a myth that we use to delude ourselves into believing that there is a “pie” of a certain size that can’t grow any larger and that if we don’t grab a bigger slice of it, someone else will. Second, the idea that more is better causes us to always grab for that bigger piece of pie, even to the exclusion of others. Third, the concept that this is just the way things are gives us a very weak excuse to act greedy. The truth? All of these are complete myths – there is abundant resources for all and the only reason to grab more and more and more is greed; we use these myths to justify greed.

Chapter 4 – Sufficiency: The Surprising Truth
The book tries here to make a clear distinction between the idea of “enough” and the idea of “abundance.” Most people strive for abundance, but the truth is that abundance means that you always have more than you actually need, and acting on this basis means that in fact you are denying things to others in order to create an overflow for yourself.

A much better target is “enough;” find the things that make you fulfilled and then use the overflow from that to make the world a better place. For me, this means that I should find the point where my work effort produces what my family needs, then spend the rest of the time chasing my values: raising my children well and working on alternative energy causes. Interestingly, this concept works hand in hand with the concepts in Your Money or Your Life (which I highly recommend).

Chapter 5 – Money Is Like Water
I found this chapter quite interesting. Many people (myself included) keep track of their net worth and strive to increase it each month or each quarter, a reasonable goal if you want to create a state of financial self-reliance. This chapter argues that once your net worth reaches a point of comfort for yourself, you should strive for zero growth in your net worth.

This seemed pretty strange to me at first, but as I read on, it made more sense. The author doesn’t mean that you should begin to spend like mad, but that you should take that growth in your net worth and apply it towards causes and values that are important to you. Let’s say, for example, that my child is considering a life of volunteer work for a cause that I also believe in; I could take that abundance in my net worth to buy my child a home to live in and pay the taxes on it while my child focuses on working for an organization. Or, I could use that extra money to start an “X-Prize”-like organization awarded to a group that designs a non-emission car that runs on something that could be produced domestically (a fully developed hydrogen car, for example). Once I reach the point of having “enough,” these doors open to me and become fulfilling things to do with my money.

Chapter 6 – What You Appreciate Appreciates
Just like an investment appreciates over time because of the dollars invested in it, anything of value appreciates over time in relation to the amount of attention you pay to it. Thus, take a look at what you spend your time focusing on in a given week. These are the things in your life that you are truly trying to grow; the other things are being left to wilt. Keep a log, if you want, of the time that you spend focused on various areas of your life: your career, your family, your interests, and so on.

The easy answer here is that there isn’t enough time in a day to give proper attention to the things that you want to give attention to. What that actually means is that you’re not allocating your time in a way that matches your values, and for many of us, that means you’re spending too much time focusing on your career and money-making motives and not enough time on the other things that are important to you.

Chapter 7 – Collaboration Creates Prosperity
The main thesis of this chapter seems to get lost in the shuffle of anecdotes. The general idea of working together and sharing skills seems to come through, but how does this apply to the thesis of the book?

It didn’t become clear until the end of the chapter, and it can best be summarized with the old adage give a man a fish and he’ll eat for a day; teach a man to fish and he’ll eat forever. In other words, the best gift we can usually give is sharing our skill and our time and not our money, particularly when we can use that skill to teach others how to walk for themselves or make it possible for them to do so.

Chapter 8 – Change the Dream
The “dream” referred to here is the social dream, using Martin Luther King Jr.’s “I have a dream” speech as an example. What sort of social change do you dream about? Instead of taking the excess in your life and spending it on a $200 pair of pants, why not apply that money towards creating that social change?

Your dreams can only result in change if you realize that they’re more than just dreams – they’re goals that you can actively work towards with your time, your money, and your passion. Dr. King didn’t make it to Washington to give his speech without time, money, and passion, but because he provided all three, he changed the world. Perhaps you don’t have King’s eloquence, but all it takes to change the dream is already in your hands.

Chapter 9 – Taking a Stand
One of the biggest challenges with making a commitment to change the dream is that it requires, at least to a degree, stepping away from the normal flow of Western society. Most of us spend our time worrying about accumulating wealth and buying stuff that we don’t really need and talking about things that are of no real importance. The first and most difficult step in really choosing to do something different is taking a stand against these things and choosing a different way.

This means that instead of following along with the flow of everyone else, the first step to chasing your real dreams of changing the world are to stop following their flow. Figure out what’s enough for you and just stop chasing the brass ring above all else.

Chapter 10 – The Power of Conversation
The next step to carrying forward a dream is really understanding it, and the way to do that is through the power of conversation. In an interesting way, I feel like the internet has really caused this to take off, as it has enabled people to become involved in movements and causes and conversations that were inaccessible to them even a decade ago.

If you want to change the world, find out how it works. Ask questions. Dig in and find that place in the dream where your skills can really make a big difference. Ask more questions. Do things. Be involved in the process. Let’s say you’re a web programmer and you believe in alternative energy resources. Look for a nonprofit group that espouses the same ideas that you believe in and volunteer your skills with them – help them design websites and web applications that can collect donations and reach out to more people who may be able to help.

Chapter 11 – Creating a Legacy of Enough
If one piece of the book really took ahold of me and grabbed me, it was this one. When you take a stand, change direction, and clearly commit to a cause greater than yourself, you set a great example for those around you, especially for your children. Instead of giving them an example of always battling just for more money and more stuff you don’t really need, you give them an example of battling for a cause that can affect the lives of countless people and authentically bring about change.

You can do this in a multitude of ways. Get your family and your community involved in projects. Take your child along with you as you volunteer. Involve your neighbors and friends in what you’re doing if they’re interested. Let them know by what you do that there are other options than merely following rampant consumerism, that they can, through their financial and personal choices, bring about real change.

Chapter 12 – The Turning Tide
The final chapter is merely a brief coda that reinforces the general points of the book, that once you figure out what is enough for you, you can take the abundance and really work to bring about the things that are important to you.

Buy or Don’t Buy?

The very first paragraph of the book pretty much sums up the content:

This book is entitled The Soul of Money, but it is really about our own soul and how and why we often eclipse it, dismiss it, or compromise it in our relationship with money: the way we get money, use money, give money, and/or sometimes just try to avoid thinking about money. This book is about finding a new freedom, truth, and joy in our relationship with money, this strange, troubled, and wonderful part of our lives. And it is about awakening and using the unexamined portal of our relationship with money to deliver a widespread transformation in all aspects of our life. Unltimately, this book is a pathway to personal and financial freedom.

If that sounds like left-wing rubbish to you (and it might), you’ll probably not get much out of this book or even enjoy it at all, but if that paragraph sounds exciting and empowering, then I think this book will be a home run. For me, I found parts of it to feel much like a liberal preaching to me about how to live my life, but other parts of it were quite interesting and thought provoking. Overall, it was quite worth reading; in many places, it made me seriously reflect on the relationship between my money and my values.

The Soul of Money is the thirtieth of fifty-two books in The Simple Dollar’s series 52 Personal Finance Books in 52 Weeks.

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I have a question about giving to charities. I was always taught by my parents I should be giving 10% of what I earn to the church, charities, the poor, etc. I have no problem doing this, and most financial books recommend giving a portion of what you earn away.

I’m getting married soon and my husband-to-be wants to know why we should do this, and to be honest, I don’t know why. Never really thought about it. Even in financial books, I haven’t found a good explanation, other than something vague like “giving your money away creates more wealth for you.”

Charity – in fact, altruism in general – is a very difficult concept to explain in a general sense. What I’ve found often is that you either have an innate understanding of why you give or you don’t, and introducing the idea to someone who doesn’t see the benefit is likely to get a shrug of indifference. The best I can do is explain in detail why I give to various causes.

First of all, charitable donations are a direct reflection of my values and perspectives. Whenever I donate money, I’m contributing it towards something that I feel has importance. If I want to see food available to homeless people in my community, I can donate to the local food pantry or soup kitchen. If I want to fight global warming, there are plenty of organizations that are fighting for such change. The real question is whether you have found something with enough importance to you to speak out with your pocketbook.

Second, helping others improves your self worth in many ways. Once you’ve given something to a charity that you truly believe in, you feel good about it. The money in your pocket went towards a cause beyond what you can manage in your daily life, a cause that combined with the similar actions of others can actually bring about change in the world. That’s not something you can get from buying yourself a flat panel television.

Third, charitable donations have indirect benefits. Here’s an example: in the community where I grew up, there was a food pantry where people would donate food and others who were in need would eat it. My parents would often take fresh produce from the garden there in the summer. The family of one of my closest friends was extremely poor and without some food support from the pantry, my friend’s parents likely would not have been able to keep their house and would have had to move away. At a crucial point in my life, this friend pushed me to do something that I would have never done on my own. The result? I received a full scholarship to college that I wouldn’t have received otherwise.

Because my parents quietly donated to that pantry, a series of events occurred that ended up with their son having an opportunity to get a college education. When people talk about charity coming back around, this is exactly what they’re talking about.

One final comment: I don’t think, like many do, that whether or not you tithe or give to charity is a sign of whether you’re a good person or not. I know some very wonderful people who don’t give to charities and I also know some people who give to charities that I wouldn’t trust my child around. A person should only give to a charity if they truly feel it is the right thing to do with their money – if it doesn’t feel right, don’t donate.

In short, even if you don’t donate any of your income to charity right now or you don’t see the purpose, don’t close your mind or your heart to the idea. When the right reason comes to you, open up your wallet and see what happens.

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But our church is fairly large and it does have a significant endowment from some members who left part of their large estates to the church. Even though the church spends a lot of money on community services and church maintenance, the rate of growth of the investments plus the donations is currently exceeding the expenditures by quite a bit; in fact, some members sarcastically refer to the finances as the “war chest.”

On the other hand, my wife’s hometown church is in deep financial straits. Even though we are not members, we still receive their newsletter, and inside a recent one was a frank discussion by the president of the church council on the bankruptcy of the church unless they stop providing any community services at all or else let their pastor go and have only a part-time pastor for a while. At their current rate of spending, their investments and money will be depleted in eight years.

So we made a decision. We split the amount of money we give to the church into three pieces, each effectively equal to 2% of our annual income, and we are sending two of the pieces to her hometown church. Even if they change nothing at all about their budget, if they take our money and add it to their investment portfolio, our contributions alone will add almost a year of solvency to the church, which will make a tremendous difference in the lives of some people. Our current church won’t be hurt in the least; in fact, our pastor was quite happy we were doing it.

The lesson of the story is that you should put your donations where they will count. If you just quietly give each month to a church, consider which church could use it the most for survival and for the benefit of the community as a whole. If you give to a charity, consider other charities, such as The Simple Dollar’s favorite charity, the Child Abuse Prevention Center.

A dollar is a dollar, but what you do with that dollar can make all the difference in the world.

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The Child Abuse Prevention Center of Dallas County, Texas works tirelessly and effectively to help stop the cycle of child abuse in the Dallas Fort Worth area. This is done through a number of distinct programs that seek to solve the challenge of child abuse.

The most powerful program is the Parent Aide Program, which directly assigns volunteers to individual families seeking to solve abusive situations. From the website:

When a family is referred to the CAP Center, a Case Manager meets with the family to determine their interest and eligibility for the program. After a thorough assessment, that same Case Manager then determines if the family is appropriate to match with a volunteer. If the family is appropriate, the Case Manager accompanies the assigned volunteer Parent Aide on an introductory visit. The professionaly trained Case Manager supports the Parent Aide with specific recommenations for the family along with ongoing supervision through weekly conversations.

As I have family in the Dallas-Fort Worth area, I am aware of the good work that the Child Abuse Prevention Center does in the area for protecting children. Children are society’s most valuable asset, and this group works hard to ensure that this asset is not abused.

If you’re wondering about how they spend their money, particularly as compared to similar charities, Charity Navigator awards the Child Abuse Prevention Center a four star rating (their highest). Charity Navigator is an independent assessor of charities and it can be quite harsh on any charity that does not meet specific guidelines.

If you have questions about the charity, the director, Margaret Patterson, makes herself easily available by email or by phone. She does not earn the executive level salary that the heads of some charities assign themselves; she barely makes more than I do and her job is tremendously more challenging than mine.

I cannot stress how truly impressed I am by the good work done by the Child Abuse Prevention Center and the fiscal discipline that they employ to make sure that donations actually go to help children in abusive situations.

If you’re considering a charitable donation this holiday season, please consider dropping some money towards the Child Abuse Prevention Center.

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