I’d Like to Give More to Charity; How Do I Get Started?

When I transitioned from fundraising in the nonprofit sector to financial planning, I was interested in how giving back can be part of a household’s financial plan. Many of us have thought “I should give more to charity,” perhaps prompted by end-of-year solicitations, or maybe when we get a raise. Without a plan, though, sometimes we fail to act on those good intentions. Here are some tips to get started:

Identify your giving priorities

To start, you can be more intentional about charitable giving: Instead of waiting for a solicitation to hit your inbox, consider creating a framework for your giving that can be as loose, or structured, as is helpful for you. 

A loose approach might involve identifying your top giving priorities and focusing most contributions toward those causes.

A more structured approach might involve setting target percentages. For example:

• Issue A- 20%

• Issue B- 30%

• Issue C- 10%

• Organization 1- 5%

• Organization 2- 10%

• Other- 25%

I track my donations on a basic spreadsheet, listing the organization, donation amount, date, and notes. This kind of tracking can help determine how closely donations align with the target percentages.

Give as a household

Giving to charity can be even more meaningful when done with others. 

If you are partnered, have a conversation with your significant other about charitable giving. My spouse and I found it both challenging and clarifying to collaboratively create our family’s giving framework. We were surprised to find that our donations did not address all of our priorities. This process gave us the opportunity to be more aware of our giving and make adjustments.

Bring the kids into charitable giving in whatever way seems age appropriate. For example, my children set aside a portion of their allowance for charitable giving. At the end of each year, they decide what cause they would like their “share” money to support. I then identify a charity that addresses their selected issue and make a family donation, consisting of the allowance money and a parental match. So far, my kids have chosen issues that differ from my giving priorities; I appreciate that we have gotten to support organizations that help trees and oceans while also teaching them to give back.

There are also opportunities to incorporate family giving into end-of-year holidays. A friend of mine reserves one night of Hanukkah for charitable giving instead of gifts. On that night, everyone in her family talks about a cause that is important to them (while eating a special dessert!). The conversation sometimes leads the children to learn about a problem in the world that they were unaware of. Afterward, they make a contribution to an organization that addresses each person’s designated cause.

Automate your giving

A final suggestion is making sure you direct your money to charitable giving as intended. As with contributing to a workplace retirement account, setting up an automated system makes it easier to reach your goals related to charitable giving.

If there are organizations that you like to support on an ongoing basis, it may make sense to set up a recurring monthly contribution that gets built into your cash flow. It can be easier for non-profit organizations to plan their budgets around recurring donations, rather than those that occur irregularly.

Otherwise, try setting up regular, monthly transfers to a savings account that is earmarked for charitable giving. For some people it may make sense to do this through a donor-advised fund (DAF) instead. Having a separate account gives you permission to spend all of that money on charitable giving, rather than losing track of those funds and that intention over time.

How charitable giving can fit into a financial plan

For people who are charitably inclined, charitable giving can not only benefit others, but can provide financial benefits to you as a donor. With a charitable gift, you can support the causes that are important to you and sometimes also reduce the amount of tax you pay. 

If you have questions, we are here to help. Schedule a 15-minute introductory call to discuss your financial plan.