Choosing Charities

Choosing Charities

When the recession began in 2008 and consumers began to feel a crunch in their budgets, they often reduced or eliminated charitable contributions. But as the economy has improved, nonprofits have seen the return of charitable donations. A June Reuters article reported that donations to charity rose to $298.42 billion in 2011, but were still $11 billion below a 2007 record. 

As you may again be considering which charities you want to contribute to, we know picking and choosing among your favorites can be difficult. Here are some tips for weighing which nonprofits to support first, while you are still reevaluating your complete financial picture: 

• Prioritize: Chances are some of the charities you support have greater importance to you than others. Create a list of all the groups you donate to and rank them. Then decide how many you can support.
• Bang for your buck: Consider where your dollar does the most good, both long term and short term. You may want to support groups with an immediate need and make larger donations to groups with a long-term goal when you can again afford it.
• Go local: While large national organizations can accomplish great things with pooled resources, in the short-term you may decide that local causes come first, particularly if you are in an area directly impacted by a natural disaster or other situation, like the loss of a major employer.
• Time versus money: If you decide you cannot donate cash, consider donating your time or doing pro bono work for an organization. They may be paying for services that you can provide free.
• Get specific: Fund a project with immediate and visible results, like a drive to restock the local food bank.
• Donate goods: Cut some coupons, scan the grocery circulars and purchase items for a food pantry, homeless shelter or other group. Don’t forget these organizations often need personal hygiene items and infant products like diapers and wipes. 

If you can’t live without helping one or more charities from your donation roster, consider a percentage decrease across the board. And remember that this situation will be temporary. As the economy continues with forward momentum, you can increase your charitable donations. If you need assistance obtaining financial information on a charity or if you need to re-examine your own situation to determine what you can afford to give, you may want to consider consulting with a Certified Financial Planner (CFP). Often a CFP can work with your tax advisor to help you and your favorite causes get the most benefit from your donations and bequests. 

FINANCIAL FACTS 

Are You Ready? – Two out of every five American males that live to age 65 will survive at least another 20 years to age 85 (source: Social Security, BTN Research).   

With And Without Inflation – The cost to attend an in-state public college (i.e., tuition, fees, room and board) has doubled since 2000.  Even after removing the impact of inflation, the cost to attend an in-state public college has doubled since 1989 (source: College Board).  

Lots And Lots Of People – Thirty six percent of the 7 billion people in the world live in China or India (source: Census Bureau, BTN Research).