Being organized about charitable giving

We’ve often talked on the site about donating things you’ve uncluttered, but what about supporting charities in other ways? The following is an organized approach to making other donations, if you feel so inclined.

Decide how much to give

Include charitable giving in any financial budgeting process you have. If you want to donate your time, make sure that time commitment fits into your time “budget,” too.

Decide where to give

I’ve selected a few charities I give to every year, and I sometimes support friends I know doing a charitable walk, run, climb, or bike ride.

Having made this decision, I don’t waste time evaluating all the solicitations that come my way in the mail; they go straight into shredding and recycling. They may be for good causes, but I can’t personally support them all.

When deciding what charities to give to, you may want to look at Charity Navigator, GuideStar, or the BBB Wise Giving Alliance to learn more about the organizations you are considering. All three of these organizations agree on what’s important in selecting a charity, as they say in a joint statement:

The percent of charity expenses that go to administrative and fundraising costs — commonly referred to as “overhead” — is a poor measure of a charity’s performance.

We ask you to pay attention to other factors of nonprofit performance: transparency, governance, leadership, and results…

That is not to say that overhead has no role in ensuring charity accountability. At the extremes the overhead ratio can offer insight: it can be a valid data point for rooting out fraud and poor financial management. In most cases, however, focusing on overhead without considering other critical dimensions of a charity’s financial and organizational performance does more damage than good.

Decide when to give

You may want to spread your donations out over the year, or you may prefer to sit down once a year to do all your donations.

You might also want to consider making ongoing automatic monthly donations. Charities love these because they have a revenue stream they can count on — and probably because people seldom change or cancel these donations. If you go this route, make sure you know how to adjust your donation, and don’t hesitate to do so if your financial situation or your donation priorities change. I have one such donation, and I recently called and reduced the amount; it wasn’t difficult at all.

Keep track of your donations

If you itemize deductions on your U.S. individual tax return, you can deduct qualified donations. If you do this, make sure you have proper records of your giving. Those records can include cancelled checks, credit card statements, and acknowledgement letters from the organizations that received your donations. If you give small donations at the along with your purchases from grocery stores or places like PetSmart, be sure to keep those receipts, too. A simple manila file folder, envelope, or even a gallon-size zip-top bag labeled with the calendar year on it can suffice for keeping all your receipts in one location.

Did you make a donation via text message? The IRS says “a telephone bill will meet the record-keeping requirement if it shows the name of the receiving organization, the date of the contribution, and the amount given.”

Also remember that you can deduct “any unreimbursed out-of-pocket expenses, such as the cost of gas and oil, directly related to the use of your car in giving services to a charitable organization.” If you’re donating your time and this involves the use of your car, you’ll want to keep the appropriate records to claim that deduction.

One Comment for “Being organized about charitable giving”

  1. posted by Katie on

    A few years ago I started a little bit of a different approach when it comes to my charitable budgeting. I decide upon the amount that I want to donate throughout the year, but then I only commit 75-80% upfront to the organizations that I regularly donate to. This leaves some funds available in my budget in case something comes up like hurricane disaster relief that I want to donate to or a friend running in a charity run/walk that I want to support.

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