With the holiday season in full swing, many people want to make charitable contributions. Daily reminders from your house of worship or Toys for Tots to TV ads and emails ask for donations. It’s hard to miss the message of other’s not-so-good fortune. There is so much need. But how do you decide which charities to support? There are somewhere between 1.3 and 1.5 million charities here in the US. And 10 million charities and non-governmental organizations (NGOs) in need of your support around the globe. So, how can anyone choose charities to support from an endless range of possibilities?
Supporting your charities should have a “feel good” effect
I have grappled for years with that very question. More often than not, I answer that question with more questions. Is there a way to make more of an impact with my charitable dollars? How much should I give to people I know who are running for a cause? Should I focus just locally or help save children in Africa? How about the elephants or other endangered animals? What about the pet shelter where we got our kitties, Whisky and Skye?
To date, nothing I’ve chosen really makes me feel particularly good, with one exception. A couple of years ago, pre-Covid, Dan and I volunteered a few times at the Red Cross Food Pantry in Boston. We could see the need first-hand. Food was quite literally stacked to the ceiling when we arrived, and completely gone 4 hours later.
Talking to the people running the food bank gave us an up-close-and-personal look at food insecurity in America. Meeting the guests and their children put real faces on the problem. We were exhausted at the end of our shift but motivated to give. We knew our donation dollars would be well-spent.
Everything else has been more of an exercise in check writing. The organizations have, of course, been worthy. They are doing amazing things. But something is definitely missing.
Wrestling with the options
I started exploring how to choose charities as I prepared for a segment on BloombergQT. That’s Bloomberg’s online streaming news network that runs 24/7. I also needed the information for a December article I wrote for Retirement Daily. I was surprised with many of the findings.
The most surprising thing was the sheer number of charities one can support. Maybe I never thought of how many nonprofits are out there. And, for sure I would not have guessed 10 million. This did nothing to help me figure out where I might direct my charitable giving or find better options to get that “feel good” effect.
Also, a surprise was the sheer volume of dollars going to charities. In 2020, $471 BILLION went to nonprofits around the globe. That’s up from $448B in 2019. Before the pandemic. Giving by individuals was up from $310B in 2019 to $324B in 2020. That’s a lot of dollars going into the Salvation Army Kettles!
During the first year of a global pandemic, charitable giving broke all previous years’ records. The 2021 numbers won’t be out until mid-year 2022. There will be some interesting findings to come…
When looking for ways to choose charities to support…
…I by chance stumbled on a site called GiveWell.org (www.GiveWell.org). They describe their business as follows:
“GiveWell is a nonprofit dedicated to finding outstanding giving opportunities and publishing the full details of our analysis to help donors decide where to give.
We don’t focus solely on financials, such as assessing administrative or fundraising costs. Instead, we conduct in-depth research to determine how much good a given program accomplishes (in terms of lives saved, lives improved, etc.) per dollar spent.
Rather than rating as many charities as possible, we focus on the few charities that stand out most (by our criteria) in order to find and confidently recommend high-impact giving opportunities (our list of top charities).”
Well, it looks like I’m not alone in my search. Wrestling the millions of options to the ground is no easy task. It takes an army of analysts to help us narrow down the playing field and choose charities to support.
Using Charity Navigator
Another interesting resource I knew about but never used is CharityNavigator.org. They monitor and rate over 195,000 charities. You enter the name of your charities to support and get lots of information. They describe what they do as follows:
“Your guide to intelligent giving –Since 2001, we’ve been empowering millions of donors by providing them with free access to data, tools, and resources to guide philanthropic decision-making…
…donors can give with confidence knowing the organizations that are highly rated on Charity Navigator efficiently steward donations and are accountable and transparent.”
Finding a charity to support among millions is one thing. Making sure it’s a viable, credible, organization is definitely a different thing.
The last piece on my charities to support hunting expedition
The fact of the matter is there are still too many worthy causes and not enough money in my budget to support everything I’d like to. There are tornadoes that just ripped through my beloved Kentucky to the fires that destroyed houses north of Boston. And, the animals that are so cruelly mistreated or abandoned, and the one million children starving right now in Afghanistan. Those were the news headlines just before Christmas. I can barely handle the daily news these days.
The net result here is I want to put a good strategy and plan in place so my giving is meaningful. It is important to feel good about making these donations.
Turns out making a difference is important to most adults:
- 84% of millennials contribute annually
- 59% of GenXers also make ongoing donations
- 72% of Boomers give an average of $1,200 per year
After researching for the article, I came up with 12 tips that may help you (and me) focus in on the one or two or ten charities to support. Which of these options fits best for your giving strategy? Is there some aspect of the nonprofit world more important or meaningful to you? You can read more about each tip in my article on Retirement Daily, and here is the list:
- Give for maximum impact
- Support local to better your own community
- Connect with international organizations for global meaning
- Move society forward
- Remember loved ones who have lost their fight
- Protect culture and arts organizations
- Provide for those who need a hand
- Consider a religious tithe
- Support disaster relief efforts
- Direct your outrage to make a difference
- Concentrate family giving for bigger impact
- Cheer on your friends and give to their cause
An extra tax deduction for 2021
As we close out 2021, there’s a “bonus” you can take advantage of. If you make a cash contribution to a charity, you’ll get an extra tax deduction. Even if you claim the standard deduction. Here’s how it works:
- If you use the standard deduction, you can get an additional deduction. Up to $300 for single filers and $600 for married filing jointly. This deduction is for cash contributions to nonprofit charities.
- If you itemize, your cash contributions will be considered up to 100% of AGI.
This extra tax deduction ends on December 31, 2021. It is not scheduled to return in 2022, unless Congress sticks an extension in another bill. If you’ve got some extra giving to do, now’s the time.
No amount is too small (or too big) to give to a charity you want to support. The nonprofits truly appreciate every dollar. So, get out that checkbook or send an e-check, use Venmo, or set up recurring contributions on your credit card. It all works. You get an extra tax benefit this year…your charity gets an important contribution.
Isn’t that putting some extra sparkle in your holiday step?
Wishing you and yours a wonderful, happy, healthy holiday season and a Happy New Year.