Ramblings from Early Retirement

Giving to charity is a good thing. Planning and budgeting for your charitable giving is even better. I sat down at the beginning of the year and planned how much I would give to my favorite charities and when I would give.

An article in the August 2006 issue of Money magazine, titled "Give to Charity but Don't Go Broke Doing It" discusses planning your charitable giving and gives some useful guidelines. Planning your giving in advance ensures that it fits your budget and helps to avoid family disagreements.

Charities know that people give money because someone asks them to give. So they ask. They fill your mailbox with requests. You don't have to write the check as soon as a request arrives. File solicitations from charities you may be interested in supporting. They'll be happy to accept your money in a few months. Waiting gives you time to budget your donations and time to choose between the many groups that want your money.

Research the charity before making a final decision. A general guideline is that at least 70% of your donation should support the mission of the charity, not administrative and fundraising costs. You can find information at Charity Navigator and the BBB Wise Giving Alliance to help you determine expense ratios.

The average household gives 2.2% of their income or $1,000 a year to charity. However, unlike investing your savings, Money  recommends that you not diversity your charitable contributions. Give fewer and larger donations. This makes your name and address more valuable to the charities you give to and reduces the likelihood that they will sell your name to other charities. Additionally, the larger your donation, the smaller the portion that is used by administrative and fundraising costs.

Planning your giving is good for your budget and good for the charities that you give to. Put a little thought into choosing the organizations you support.

// posted by SusanBLuvsCrafts @ 10:57 PM