We often think of giving as spontaneous acts of kindness — the act of giving money, goods, or services to others in need. While giving is and should be spontaneous and from the heart, there are also many fiscal advantages to actively planning for charitable donations in your monthly budget. Here are a few advantages and ways to do this.
Advantage #1: Planning giving into your budget allows you the satisfaction of giving while remaining financially responsible. Not to say there aren’t times you should give even if you haven’t budgeted for it; your budget should always be a guideline rather than a mandate. Budgeting allows the planner in you to compromise with your spontaneous, live-in-the-moment side without as many negative financial repercussions.
Advantage #2: Planning to give allows you to give more. How many times have you had an opportunity to give and realized you didn’t have anything to spare, or that the money you had was already designated for other things? At the same time, you won’t be giving as sporadically, such as only when you happen to have extra money. Together this equals more giving over all.
5 Tips For Budgeted Giving
First, you need to determine which charitable causes you want to contribute to. Causes are as unique and personal as you are, so look around and find a cause you can identify with, whether from personal or family experience, emotional connection, or other factors. Giving shouldn’t just be a number on your pie chart, or a percentage of your income. It should be an expression of your personality, your interests, and your heart.
Don’t wait until December to give. While many people and businesses scramble at the end of the year to reach particular giving amounts for the tax write-off, this isn’t the most financially responsible way to give. The end of the year is usually already stretched tight with gift-giving, party, and travel expenses, so you may be unable to give us much of a lump-sum amount as you would like.
Consider a monthly payment plan. Although you can budget and set aside regular amounts of money for your charities of choice and then present them as a lump-sum, there are advantages of submitting monthly payments. First off, you will be less tempted to spend money you’ve set aside or re-purpose it (out of sight, out of mind). Secondly, many organizations prefer this method of giving because it allows them to utilize funds more effectively. After all, charities have budgets, too. If they can count on a certain level of income for an entire year, their projects and output is more definite and their funds will go further.
Give online with automatic deductions. Most larger charities have websites that allow you to give online. This reduces the cost of mailing materials and paper check processing, and is more eco-friendly. Furthermore, many organizations encourage automatic withdrawal of funds on a set day each month. This allows the reliability of steady pay dates for them, and eliminates the risk of forgetting to pay on your end. It is also cheaper to process. Of course, you’ll want to make sure the organization is reputable before giving them your bank account information, and be sure to check your monthly statements for errors.
Don’t forget but don’t overemphasize tax deductions. Most donations to charitable organizations are tax deductible, so be sure to keep record of all your giving for your income tax files. Although this is a great advantage of giving, it can be overemphasized as a motive for giving. Always give for the joy of giving, and consider the financial benefits secondary.
Budgets are a reflection of your priorities. Planning giving into your budget is a way to be true to yourself and a good steward of the funds you’ve been blessed to receive. Beyond a dollar amount each month, there are also countless ways to give of yourself on a daily basis that won’t cost you anything but a little time and effort, and reward you many times over.
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