The Thoughtful Philanthropist’s Guide to Year-End Giving

The Thoughtful Philanthropist’s Guide to Year-End Giving

Whether it’s the tax benefits or simply holiday cheer that prompts you to donate to charity this time of year, you’ll get the most out of your giving by doing a bit of thoughtful planning now.

If you’ve got charitable giving on your list of holiday to-do’s this year, you’re far from alone. Nearly one third of charitable giving occurs during the month of December. In fact, just over 10% of U.S. donations are dashed off in the last three days of the year.

But year-end giving doesn’t have to be a blind rush to respond to all of the charitable solicitations that will land in your mail or in-box (if they haven’t already). You can take control of the holiday donation requests and give purposefully and thoughtfully even amidst the year-end scramble. Here’s how:

Step 1: Set a budget. This is an obvious, yet very often overlooked first step. Many people will plan to give to charity during the holiday season, but neglect to settle on a clear amount ahead of time. This can lead to hap-hazard giving and a feeling of having little real impact on the causes you care about.

So do your future self a favor and sit down now with your family, your partner or even just yourself and set a budget. Make a list of any other donations you’ve made this year and which organizations they went to. Think about your overall holiday budget and how much you can afford to give to the causes you’re passionate about.

If you plan to claim a charitable deduction, now’s a good time to double check the guidelines. People filing U.S. tax returns should review the IRS rules for charitable deductions and run any questions by an accountant now. About three-fourths of Americans take the standard tax deduction, so it’s a fair bet that many donors intend to claim their donations on their income tax return, but don’t do it in the end.

Step 2: Write down your blue sky giving ideas. Now, you’ll want to think broadly about all of the issues you’re passionate about, and write them down. One way to do this is to jot down your “blue sky” giving ideas under three main categories:

  • Nonprofits we traditionally support. These are the organizations and issues you tend to support on an annual basis. Remember you’re not yet committing to donating to these this year—you’re just looking at where you have a history of giving.

In the example here, couple Stephanie and Robert like making an annual donation to their church and the university where they met. Stephanie’s a member of a local nonprofit board, and she makes an annual gift to it each December. Robert volunteers regularly with an organization that tutors low-income youth, and he’s given to it in the past. Finally, the couple has given a year-end donation to the ACLU for the past 10 years. All of these go on the list.

  • Causes we’d like to explore supporting. These are the issues you feel are topical, urgent and speak to you on a personal level. They may be causes you’ve given to before. Or something might have happened this year—perhaps you read a news article or traveled someplace new—and that experience made you think “this is an issue I want to do something about.”

Here, Stephanie and Robert jot down youth literacy, protecting Bristol Bay in Alaska from mining and addressing local hunger.

  • Donations made in honor/in support of others. How many times have you given to a charity you normally wouldn’t support, just because someone you know asked? Peer pressure—or even just wanting to support an issue important to someone important to you—is a common reason for giving.

Perhaps your neighbor is running a triathlon in support of cystic fibrosis. Or a relative passed away and asked that gifts be made in his honor to a specific environmental protection organization. It’s true that these gift requests come throughout the year and not just at year-end. But it’s still a good idea to think about any recent requests and how you could plan for them as part of your year-end giving.

In our example, Stephanie and Robert’s niece is participating in a week-long bike ride for an AIDS charity next spring. She needs to raise a significant amount of money to participate, and the couple have committed to helping her.

Here’s what the couple’s giving plan looks like after steps 1 an 2:

Step 3: Identify a few issues you can reasonably support this year. Now that you have your “dream” list of charitable causes to support, it’s time to come back down to reality. Recognize that to make an impact on the causes you most care about, larger gifts are usually better. As much as you want to, you can’t solve the world’s problems on your own, so you’ll want to choose a few issues you think need your money most right now.

In our example, Stephanie and Robert decide to look first at the causes under their “nonprofits we traditionally support” category. They’ve already pledged to give to their church and want to give their usual $100 to the ACLU. But they decide to delay giving to their alma mater until next year, when they’ll be celebrating their 25th anniversary and will want to make a major gift.

Stephanie wants to show her commitment to the board she sits on, so has decided to make a meaningful gift to that organization again this year. Robert wants to reassess his volunteer opportunities in the new year so decides to hold off donating to the youth tutoring center.

Next, the couple look at the issues under “causes we’d like to explore supporting.” Together, they decide that the coming year will be crucial for protecting the fragile environment around Bristol Bay from the development of the Pebble Mine. So they commit to directing a substantial chunk of their charitable giving to this issue, and leave their other passions for another year.

Finally, under “donations made in support of others,” the couple has already told their niece that they want to support her bike ride. So they make a note to fulfill their monetary pledge to her before the year is out.

Here’s their giving plan after step 3:

Step 4: Research your top issues. In addition to “setting a budget,” this is the step many donors end up skipping. In our example, Stephanie and Robert know most of the nonprofits they’ll be giving to, because they’re personally involved in their work. But this year, they’ve also decided they’d like to give to an organization working to protect the vulnerable environment around Bristol Bay in Alaska.

Stephanie and Robert aren’t especially familiar with the area or the issue. All they know is that they want to help protect the Bristol Bay salmon run from the development of a planned mineral exploration project. In an ideal world, the couple would spend time researching the organizations working on the issue, speaking with experts on the issue and choose a nonprofit whose strategy they support.

In reality, they just don’t have the time. What they can do is hire a philanthropic consultant like Thoughtful Philanthropy to create an impartial, well-researched report for them on which nonprofits are working in the area and the strategies they’re following.

At the very least, the couple should commit to spending a couple of hours researching organizations on their own, emailing the ones that sound promising and getting a feel for their work before committing to a single nonprofit to support.

Step 5: Select your nonprofits and decide how much to give to each. The final step is to follow-through and donate to the organizations you’ve selected. Most nonprofits have secure donation pages, so all of your gifts can probably be made online in a single sitting.

Deciding how much of your budget to allocate to each of your selected organizations is a personal decision. You may have already pledged certain amounts to nonprofits you traditionally give to. Remember that at the end of the day, the very fact that you’re supporting organizations whose work reflects your values matters more than the final amount.

Once you’ve finished making your gifts, be sure to sit back with a festive beverage and pat yourself on the back for closing out 2017 as a truly thoughtful philanthropist.

 

 

 

 

 

 

 

 

 

About Me

About Me

I am passionate about helping people become informed, empowered and enthusiastic donors. After more than 10 years in the nonprofit/charity sector, I embraced my fear of spreadsheets and got an MBA so that I could help citizens like myself become more strategic givers.  Today, I use my unique experiences in both sectors to help people who care deeply about using their money to make the world a better place.

Lauren Janus