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Thread: What's your charitable giving strategy?

  1. #1

    Default What's your charitable giving strategy?

    Recently some friends of mine were asked to join the board of a local social services charity. It's not a huge charity - maybe $25 million in annual turnover - but I was still surprised. After all, they're not dramatically wealthier than us, but clearly they donate more to this particular charity (which is also one of our giving priorities). I ended up asking a bunch of my friends how they think about charity and I was pretty surprised at the range of responses.

    Some of them (including the aforementioned board members) took a very disciplined approach - they designated a fixed percentage of their gross household income for charity, and then distributed it to a relatively small selection of organizations to maximize their individual impact. I'd call these the 'tithers'. These were also much more likely to take volunteer or leadership roles in an organization they had 'adopted'.

    Others were the complete opposite. They gave small amounts to large numbers of charities on an ad hoc basis, generally whenever an organization (or friend) asked for a donation. They rarely had a preset amount decided for overall giving, but were quick to accede to a request. I'd call these the 'givers'. They gave to a lot of Facebook causes, marathon races, people on the street, etc.

    Yet others were somewhere in the middle: Often without a clear idea of how much they'd like to allocate but something vaguely formed, and with preferred organizations but no firm plan. I'd call these the 'diffusers'.

    I started thinking about this a lot more because, first, my wife and I are finally in a position to make somewhat more substantial charitable contributions and, second, there's the possibility of windfalls in the future that might require a more carefully considered giving strategy. On the one hand, I think the 'tithing' approach has a lot to say for it - it's disciplined, organized, and probably more likely to result in substantial allocations. It also allows for a clear focus on impactful giving rather than a more nebulous effect by many small donations spread around. Yet on the other hand, I feel like it ends up being a bit impersonal. There's no spontaneous compassion driving a giving decision like might happen with the 'givers'; it's more akin to an automated payroll deduction to pre-selected asset allocations.

    What are your thoughts? How do you think about how much you should give, and how it should be distributed? How do you handle windfalls (like an inheritance or realized equity stakes)?

    I'll chime in later with some thoughts on how my wife and I currently structure things, but I'd love to hear others' approaches first.
    "When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first." - Werner Heisenberg (maybe)

  2. #2
    I donate sporadically, usually in $500 increments. I don't plan for it really, I'm still focused on my own financial security. I just pick a charity whenever my finances are noticeably above plan. I usually tend towards lower visibility charities, since I figure they need it more.

  3. #3
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    Hmm, I don't know that I have an actual strategy. What I do is kind of random. But I think there's this subconscious limit that makes the money go out more easily if I am under a certain limit. By the way, charity for tax purposes is very restricted in the Netherlands.
    For the people on the receiving end the 'charity' can work out substantial. Like living rent free for extended periods. But I must say that I can get annoyed with people not using the opportunity they are given. Like not improving themselves as they don't have the burden of paying for a roof over their heads.
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  4. #4
    Senior Member Flixy's Avatar
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    I don't donate much to be honest, but I'm closest to what you'd call a giver: I mostly donate if I'm asked directly, so often projects or organisations where people I know are involved. Only thing I donate regularly is blood.

    A while ago we did do a charity event with my department at work: volunteering on a day for local kids who are pretty poor, which was a lot of fun, and those organisations do need a lot of free manpower.
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  5. #5
    I don't give anything face to face except to people who are begging, when I have change or the time to help them buy food.

    My most substantial giving over time has been in the form of monthly payments to two organizations for the past thirteen years.

    For the past five years, I've made more short-term commitments (a year each) tied to cutting back largely unnecessary spending on something else. It began with the money I was spending on tea/coffee at the hospital, and then the money I saved from canceling my gym membership, a series of newspaper and magazine subscriptions, and, most recently, most of the money I was spending on eating and boozing out. It's been an effective way to keep me motivated, and it's an easy way for me to identify money that I'm likely not really going to miss.

    For the past two years now I've usually given away things that I was intending to sell (good quality products that we didn't need or that had been replaced) via a group that works with immigrants who've recently moved here (large number of young refugees and asylum seekers, many families).

    I occasionally sell the things that I bake, during those times when I make many batches in a row in order to try out ideas or sort out a recipe. I've donated the surplus to WFP, and, family situation permitting, I hope to do something similar on a larger scale with food for an event this autumn—either local charity dinner or just takeaway meals.

    I generally only donate to international orgs, but, since our municipality has of late become more focused on pursuing inane and costly middle-/upper-class projects, I'm trying to determine which local orgs may be the most important to support. There are two in particular that are chronically underfunded.

    Moving forward, I'll be shifting more of the donations towards my mother's retirement savings, while anything I make from selling food (apart from specific charity events) will go towards the spawn's world domination fund. Will start becoming more active in groups that require volunteers and esp. local mentors instead, because we've found that it's a fun way to get to know our changing community, and I think it can overall be more useful than my money.

    No major tax benefits for charitable giving, in Sweden, unless recent changes to tax law have been reverted even more recently.
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  6. #6
    I like the idea to be able to give in order for the people to help themself.

    To just give a 'bulk' amount would seem strange to me. Also, I'm not exactly in position where I can give away something meaningful, like a modern x-ray machine etc.
    But I no longer give away money, it's too hard to keep track of. I used to be a member in IM, (https://www.imsweden.org/en/about-im/), gave smaller amounts, like 50$ month.
    And some cancer organisations recently, but I came to some conclusion about those groups and gave that up.

    I usually give away things I don't need etc. like my old desktop. I helped someone with a computer and gave away an old iMac some time ago.
    I like to talk to people and help them with minor task, like digging out old photos of lost family members in old cell phones.
    On rare ocassions I can buy small things like dipers and food; I never give cash - I feel like I have done that misstake.

    In the future I might consider it meaningful to go on some mission (if I can help out with thech or organization work).

    mmm... I guess that is pretty much it.

  7. #7
    Interesting responses, thanks for sharing.

    Traditionally we've been in the 'diffuser' camp, but we've gotten more disciplined about it lately. Our charitable giving generally falls into three pots:

    First are subscription style affiliations, where everyone is asked to chip in a certain amount every year. That's fairly straightforward and accounts for about half of our giving. They're generally local organizations that provide a service we either use or think should be available for others in our community to use.

    Second are donations we make to organizations that do work we find important (generally local social services, education, or healthcare) but which aren't on a regular subscription plan. These we tend to donate based on some calendar events such as their annual fundraising drive or whatever. This used to be a small chunk of our donations, but it's rapidly growing now that we have greater financial resources. This is still not very well thought out - amounts are haphazard and somewhat arbitrary. We also volunteer our time for these organizations - not more than a few hours a month, especially since our professional skillset is largely useless for more charities - but it's a good practice and it helps contextualize and personalize the experience of charity for our kids.

    The third and smallest bucket is for the causes that we are solicited to help out by friends (through things like race fundraisers or whatever). We're rarely super excited about the charities, but we do it to help our friends out (who generally have a personal reason for the organization choice). This is sporadic and amounts are rarely more than a couple hundred dollars at a time.

    We rarely give money to individuals for a host of reasons, but we do occasionally contribute to funds set up to help out someone in our social circle who has a sudden life-altering event/expense. The biggest recently was after a friend of ours was killed in a car crash - we and a bunch of friends chipped in to help cover immediate costs for her husband and three small children, ended up covering more than $100k, which gave them some much needed buffer. We'll similarly ante up for crazy medical expenses or the like, but only for people we know.

    I'm ashamed to say that the amounts we donated until recently never amounted to more than a few thousand a year. I was still in training, and paying for housing and childcare where we live is so prohibitively expensive we didn't see a way to increase it much. Now that we're both working in real jobs, though, we've started looking at this in a more disciplined manner. We're trying to increase the percentage of our gross income dedicated to charity from the low single digits to the high single digits, but that kind of money requires a bit more thought in how it should be disbursed. For now, we're just focusing on the organizations in our second 'bucket' and trying to systematically increase the amounts and, possibly, our personal involvement.

    There's also a nonzero chance that we may have one-off influxes of substantial income during our professional lives. For that kind of money (should we ever be so fortunate), we'd probably earmark a specific proportion and invest it in just a few organizations that could use sustaining funds in an endowment or the like. I'm a big believer in endowments for nonprofits that rely on either fickle small money or user fees, and I much prefer donating to something like a scholarship fund than I would to a capital campaign, where so much big-money gifts are spent. But for now this is a theoretical preference, not one I can put into practice.
    "When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first." - Werner Heisenberg (maybe)

  8. #8
    I used to tithe 10-15% to my church, and gave money to several charities. But then I became disillusioned with the church, and was disappointed by non-profit philanthropic organizations in general that use 'tax deductions' to get donations. (One example is the United Way, which helps fund the YMCA/YWCA, but membership costs exceeded my budget. And there's the whole scouting debacle...)

    I don't really have a "strategy" right now, other than volunteering my time. I could do better about making commitments that way.....

  9. #9
    oh! I belong to the few that still pay church tax over here!
    I suppose that's one form of charity. (in total amount it will be around 30k usd as it is right now)

    But I had use of them when the kids was smaller and I have seen the good it can make so I don't mind much.
    ...and I wan't to get burried somewhere with a good conscience.

  10. #10
    Quote Originally Posted by rille View Post
    oh! I belong to the few that still pay church tax over here!
    I suppose that's one form of charity. (in total amount it will be around 30k usd as it is right now)

    But I had use of them when the kids was smaller and I have seen the good it can make so I don't mind much.
    ...and I wan't to get burried somewhere with a good conscience.
    Honestly, I wouldn't pay a church tax just on principle. But that's because I'm an American who is allergic to the idea of an established religion in a secular state.
    "When I meet God, I am going to ask him two questions: Why relativity? And why turbulence? I really believe he will have an answer for the first." - Werner Heisenberg (maybe)

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