Charitable giving is a meaningful way to invest in causes, organizations, and communities close to your heart. However, with so many great organizations out there, it can be difficult to know how much to give to charity. Here we’ll explore different ways to estimate the percentage of your income you can donate.
Estimate a Percentage of Giving Using the Tithing Model.
Full disclosure, I’m not religious. However, regardless of religious affiliation, most religions promote charitable giving. All of the major world religions promote donating to causes (or often the religion itself) and these models do have many, many more years of practice than current day thoughts on budgeting.
The tithing model, which exists in most religions, including Christianity, Judaism, Buddhism, Hinduism, Islam, Sikhism, suggests donating 10% of your income.
If you can hit the 10% mark, I applaud you. Personally, I think this is more aspirational than anything. On average, Americans donate 4.3% of their incomes. 10% is actually a more likely mark for those making under $50K or over $10M. Those of us in the middle are a bit more tight fisted, as we battle student loan debt and rising prices.
Figure out a Percentage Based on Your Available Budget and Personal Goals.
Another approach is to analyze your budget. I like to use the 50/30/20 model for my budget, where 50% of my take home goes to needs (like rent), 30% goes to wants (like travel), and 20% goes to savings.
This model is not hard and fast, and certainly a charitable donation percentage could be worked in. How much you donate and where you work it into your budget then becomes up to you. If you’re very dedicated to a particular cause, you may want to consider the donation a need. If you want more flexibility, you can calculate how much you donate to charity into your wants category.
Wherever you budget for charitable giving, be sure to readjust your other expenses so you don’t blow your budget. If you want to add a new monthly donation of $50 to a cause close to your heart and consider it a need, then you’ll need to adjust things like groceries, or maybe look for a lower rent next time your contract is up.
Donate What You Can, When You Can
Frankly, this is the model that I use. One day I hope to get to a place where I can set aside 10% of my income and send it to the causes nearest and dearest to my heart. But between paying my student debt, setting aside money to make sure I’m safe in retirement, and pursuing the the activities I love while I’m still young enough to enjoy them, I’m not in a place to regularly donate.
Part of this is that I can’t decide on a single cause. There are so many needs out there and so many causes that are dear to my heart, how do I pick one to regularly send to? Recently I donated to an awesome, super grassroots organization that sends supplies to the front lines in Ukraine, during elections I always send money to candidates in tight races, I also send to Planned Parenthood (cause man they need it right now), and finally Wikipedia and local public radio because I have a strong belief in access to information.
Between times, things are always coming up, like my nieces’ schools and friend’s fundraisers. How does one even begin to decide how much to donate to charity? I just go with the flow for now, and give what I can, when I can.
Do Your Homework Before Donating
When the tsunami hit South Asia in 2004, I was a bright eyed, hopelessly idealistic 19 year old. A year later, I was on a plane to India to work with women who had lost their businesses because of the tsunami. I was sure that in my 5 weeks on the ground, I would save them from all of their woes.
What I got instead was a major slice of humble pie and a life altering lesson in non-profits. The first came in learning that I had no skill set of value to offer, that being from the wealthiest country in the world did not make me an expert in anything that these women actually needed.
The second came as I observed the activities of the flood of non-profits in the area. One well known charity showed up one day to donate 5 boats. It appeared from the outside to be a win, the town economy was centered on fishing, and all of the boats had been lost to the tsunami.
The reality was that the town had twelve boats before the tsunami, and now, thanks to well meaning, but ill-informed giving, the town had about 25 boats. They certainly had no need for 5 more.
I asked what would happen to the new boats and was told that the men in town would sell them and then use the money to party for a few days. In a place that I learned had significant domestic violence problems, the donation of boats just opened the door to more drunk men who were more likely to be violent.
How to Find Charities to Donate To
So in light of learning that all well intentioned charitable giving does not net out to actually doing good for those on the receiving end, how do you find charities that will put your dollars to good use?
- Stay local. If you donate to organizations that are doing work in your own backyard, you have a better pulse on what’s needed and you can often see the results first hand. Another story from India, was a problem with what to do with all of the donations of women’s jeans that were sent from western countries. Women didn’t wear jeans where we were, so the donations just created waste. Keeping things local means you’re informed and can ensure you make an impact.
- Make donations where you’re a recipient. Like most of us, I use Wikipedia all the time, so I know when I donate to them the service they provide. The same goes for public radio. You probably don’t need to dig too deeply to see where you’re benefiting from non-profit services – they could be the local animal shelter, river clean ups, or Planned Parenthood.
- Make donations to places you, or someone you trust are familiar with. Contrary to my other experiences on the ground in India, I saw great work from the Bill and Linda Gates foundation. I also can personally assure that all donations to Peace Corps projects turn every penny into addressing needs by volunteers who are on the ground for the long term. If you haven’t worked with a non-profit, ask around. Chances are you know someone who can give you a recommendation for a cause you care about.
Charities I recommend
I would be remiss to write about charitable giving without promoting some great organizations that can turn your donations into real, meaningful impact.
A few weeks ago, I had the joy of meeting Diane, a Returned Peace Corps Volunteer who served in Ukraine. She re-connected with another former volunteer who was still living in the country when Russia attacked Through that connection she has been sending food, medical supplies, and toys for kids to some of the hardest hit areas. Every penny goes straight into buying and shipping supplies, and she has some incredible pictures from those donations going straight into peoples hands.
The Peace Corps is well known in the United States, but I learned its not well understood. A couple of facts to know are that all standard volunteer services lengths are 27 months. ,he first 3 months are training in language, culture, and specifics to your project assignment (I was education so needed to learn about education policy, for example). After that, the first year is spent getting to know our communities. We are encouraged to not fully start our projects until the second year.
Volunteers also do not have access to any funds, so our projects tend to be limited to what we can achieve with our skill sets (a mix of training and hard work). However, you can donate directly to projects run by volunteers, and rest assured that every penny will go straight into projects, not to overhead. You also are donating to a respected organization with volunteers on the ground who are about as well versed on the place as they can be without being from there.
Right now, it’s tough to think of an organization in more need than Planned Parenthood. In a perfect world the government would pay fully for the services they offer. but today’s world is certainly far from perfect.
I have a special place in my heart for this organization. In college, I didn’t have health insurance. However, I was able to go to Planned Parenthood and make an income based payment. This allowed me toreceive some basic care, like annual check-ups.
Planned Parenthood is so often associated with abortion, and as we’ve seen, freedom from forced birth is critical. Beyond that, Planned Parenthood offers vaccines to prevent HPV. These in turn can prevent cancer from HPV, and are beyond important in a world where 80% of women will get HPV. Birth control, regular check-ups, the list of needed care that this organization provides is endless.
I just donated $35 writing this. Please do consider doing the same 🙂
How much to give to charity is a personal choice. Be sure to do your homework about where you donate . This way you can ensure your money is making the right kind of impact.