Each year, my wife and I give a certain portion of our income to charity. We usually select a few charities to help out at the start of the year and donate a significant amount to that small handful of charities. This helps us budget our charitable giving throughout the year.
But it’s not always that easy.
Our first attempt at dealing with charity was simply to give away our entire annual charity budget pretty quickly at the start of the year. That way, we would find it very easy to simply tell charity requesters that we’ve already given all of our money for the year.
But we ran into a few problems along the way.
What about unexpected events? Things like the Sumatra earthquake in 2004 or Hurricane Katrina or the Haitian earthquake in 2009 are simply massive human disasters where immediate donations are really vital to help people survive an unexpected disaster.
What about small charities with social ties? I have enough nieces and nephews and friends to know that there’s usually a regular deluge of fundraisers and other such minor giving situations throughout the year. I’m not going to hide from the girl down the street that plays with our kids almost every day when she stops by selling Girl Scout cookies. I’m going to stop by the bake sale held by the parks and recreation department to help keep youth sports free (or as low cost as possible).
We both wanted to give in both of these areas. We wanted to help out the community fundraisers throughout the year and to donate some money to big disasters, but we didn’t want that money to impact our financial state, either.
Our solution was a charity account.
Starting last year, we started putting a small amount each month into a “next year’s charity” account. So, right now, for example, we’re funding a “2011 charitable giving” account. We adjust that amount a bit based on our income, but once January 1 rolls around, that account is locked. The amount in that account is what we’re going to give to charity for the year.
We immediately donate about 40% of it to charities we know we wish to support so that we’re sure those charities are supported.
The rest of the money is doled out throughout the year at bake sales, emergency fundraisers, and countless other little things where charitable giving comes up.
At the end of last year, we still had a fair amount in the account, so we divided up the remainder and donated it between Christmas and the new year.
This leaves one final question: how do we deal with charitable requests we don’t wish to give to?
We’re honest and straightforward with them. Yes, it might be a cause that we would like to give money to, but a person simply cannot give money to every charity in the world. I particularly do not like giving to charities that make unsolicited phone calls – if a charity calls and interrupts time I’m spending with my kids, I’m not going to donate to that charity, for example. If I do believe in the cause, I’ll find another avenue to donate, one that doesn’t support such intrusion.
How do I know if a charity is legitimate? I usually don’t sweat it when it comes to local charities. I don’t demand paperwork at the bake sales, for example. With larger charities, I use Charity Navigator to ensure that the charity is legitimate and uses most of the donated money for the reasons stated.