As far as money management and budget strategy goes, making donations to your favorite charities and worthy causes is not only commendable but also financially smart. If you’re keen on getting the most out of your donations, while the organizations you donate to do the same, this short blog will show you 4 Tips that should help. Enjoy.
Tip #1: Make sure to Budget your Donations the right way
There are basically 2 ways that you can make a charitable contribution and place it in your budget; a lump sum at the end of the year or a smaller amount at regular times scheduled throughout the year. The former is more simple, similar to a holiday bonus, while the latter is a bit more involved. If you choose the latter, divide the amount you wish to give by 12 (or 24 or whatever number you choose) and put that money aside into a special savings account earmarked for charities.
Tip #2: Don’t give too much if you don’t have enough for yourself
Let’s be honest, while charitable donations are very kind, if you’re up to your eyeballs in debt, haven’t put enough into your emergency fund or are living paycheck to paycheck, you might consider giving less to charity and putting more towards paying down your debt. Frankly, you don’t have to donate money but can donate time and effort instead.
Tip #3: Do your research on the charities you wish to give donations
There are quite a few different websites online where you can do this, including givewell.com, charitynavigator.com and others. Knowing that the charity you donate to is efficiently using the funds that you give, and whether they are completely “on the level”, is vitally important when you’re giving away your hard-earned money. These sites will give you the info you need to make the right choice and donate to a charity that has the best interests of everyone involved in mind.
Tip #4: Consider donating your stock investments
One of the best things about donating a stock to a qualified charity is that any contribution you make is tax-deductible and will keep you from having to pay capital gains taxes on any appreciation in value that they have. This is not only helpful for you but also can help to give the receiving organization a bigger gift.
This is a little bit more involved so, before you decide to donate your stock investments, talk to your financial advisor first.
Interestingly, research has shown that people who donate to charity, for the most part, seem to be more happy and satisfied with their lives. The old adage that “it’s better to give than receive” really seems to be true in this case.