Many people find that being philanthropic with their money brings them joy. After all, being charitable can be a meaningful experience and is a way to put your core values into practice. Recent data confirms this, as The Philanthropy Roundtable has shown that 60% of Americans donated to charity last year.1 If being philanthropic fits with your personal and financial values, here are six strategies to help you maximize your charitable giving impact.
Identify the Causes You Care About
With finite resources, it’s important to be intentional about where to donate your money. Making a list of non-profit organizations that you have given to in the past, and perhaps adding some new organizations whose work you care about, is a good start. Looking over your list, consider what your current priorities in life are, and choose those that are in alignment with your values. This exercise can help you to ensure that your charitable dollars are supporting not just the causes that are appealing to you for help, but the causes that are currently important to you.
Consider Streamlining Your Giving
Speaking of those charitable appeals, it’s likely that you receive a multitude of donation requests from worthy nonprofits throughout the year. However, philanthropy isn’t like investing, where diversification is a recommended strategy. To maximize the impact of your philanthropy, you may consider streamlining your donations to charities that are akin and most closely align with your core values. For example, if animal welfare is important to you, you may want to focus your giving on shelters or animal and wildlife protection organizations. In this way, your giving achieves a greater impact across the spectrum of the cause you care most about.
Involve Your Family
Philanthropy is about more than money. It can also involve sharing your values with future generations and teaching them about meaningful ways that they can make a difference in the lives of others. Gathering your family together to actively participate in charitable giving decisions can also create a new shared tradition. While together, you’re helping to instill the spirit of giving, while offering each family member the opportunity to share with everyone the causes that are most important to them. There are a variety of ways to maximize your family’s charitable giving, including pooling money together toward a selected cause, establishing a fund that allows family members to choose how to direct their donations, or annually rotating the selection of charitable causes. When you instill the habit of giving, you are also building a values-based tradition that will positively impact both your family members and the lives of others.
Research the Charities Carefully
Take the time to determine the best charities that will accomplish your family’s charitable goals. Knowing the mission of each organization is the best place to start. Be sure the mission and values of your chosen nonprofits align with your giving intentions. Also ensure that the finances and management of the organization are sound. Look into what percentage of charitable donations directly support the cause or programs, as opposed to administration and overhead. There are reputable tools to help you gain this knowledge such as Charity Navigator, GuideStar, Charity Watch, and Charities Review Council.
Maximize Your Gift
Having determined where you want to focus your philanthropy, there are some steps you can take to maximize your giving:
- Give directly to avoid the middleman. Some nonprofits utilize the services of professional fundraisers, paying them anywhere from 40 to 80 percent of the proceeds received. Often these solicitations are via phone, so avoid this and give directly to the charitable organization.
- Avoid using credit cards. Nonprofits usually have to pay a credit card fee of 3 to 5 percent, which reduces the amount of your donation and thus the level of your charitable giving impact.
- Look into employer matching gift programs. Many employers offer the opportunity to match your gift, thus increasing your charitable contribution and your impact.
- Gifting appreciated assets that you have held for more than one year as a direct gift can provide you with tax benefits while helping the charity of your choice. You may also consider establishing a donor-advised fund (DAF) which can also provide you with tax savings.
Note: A donor-advised fund (DAF) is a charitable investment account that you establish at a public charitable foundation that can help support nonprofit organizations you care about. They provide a flexible way to donate with either cash or securities, and they can provide many tax advantages. A DAF can prove to be a strategically beneficial tool to consider in your philanthropic efforts, though it won’t be right for every family.
Giving Beyond Money
Donating money isn’t the only way to practice philanthropy. Time and talent can be just as valuable to a charitable organization, and many organizations need the skills of volunteers. Whether you’re giving at the financial level that you would like to or not, volunteering can help you feel more connected to the causes you care about.
Concluding Thoughts on Maximizing Your Charitable Gifting Impact
Practicing philanthropy through the giving of your time, talent, or money to make an impact on the charities and causes you care about can be very meaningful for both you and the organizations of your choice. Often, it doesn’t take a lot to make a difference. Be comfortable with the level of your giving and consider some of the strategies offered here to maximize your impact and instill the value of philanthropy in your family, as well.
If you think you or a family member would benefit from financial guidance related to charitable giving, give us a call at (540) 720-5656.
Sources:
- [1] https://www.definefinancial.com/blog/charitable-giving-statistics
- [2] https://www.charitynavigator.org
- [3] https://www.guidestar.org
- [4] https://www.charitywatch.org
- [5] https://smartgivers.org
- [6] https://www.investopedia.com/terms/d/donoradvisedfund.asp
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
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Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.