Giving; either financially or with our time; to benefit others is one of the most rewarding things we can do. It’s our chance to express the values we stand for and do our part, however small, to help make the world a better place. Cheesy, but true.
“We make a living by what we get. We make a life by what we give.” ―Winston S. Churchill
Is giving a part of your financial plan?
However, effective giving requires thoughtfulness as well as generosity. Instead of just handing over cash on a whim, structuring how you give and to who can make it a truly impactful part of your financial plan. These questions can act as a useful guide to when mapping out your financial generosity goals.
Who do I want to help?
What change do you want to help make in the world? What environmental issues or social injustices really fire you up? The list of causes to support is almost endless, from protecting native wildlife to putting food on the table for families in need. Choose a cause that really moves you on a personal level.
According to recent research by Koda the top 3 reasons Aussies say they give are:
- ‘It’s a good cause/charity’
- ‘I respect the work it does’
- ‘Sympathy for those it helps’
The research also shows the causes most favoured by Australian givers are religion, international, then health.
What organisations align with my mission?
Now you’ve figured out the general goal for your financial gift giving, it’s time to narrow down the charities and organisations supporting your cause. You won’t be short on choice. There are thousands of charities tackling all types of social and environmental challenges.
If you’ve decided to support a national or local charity and you don’t already have an organisation in mind, check out The Australian Charity Guide for a good starting point. There is likely to be a similar website in your location.
It’s important to find an organisation worthy of your hard-earned cash so beware, there are some less than legit charities out there. It’s a smart move to check the credentials of the charity with the regulatory body in your country.
Giving: How much can I afford?
So just how much money should you be giving to charity? You should approach this generosity goal by taking stock of your existing commitments.
The amount you can afford to give will be impacted by your current financial situation like paying credit cards and loans; take care not to overextend yourself.
If there doesn’t seem to be much of a surplus but you are comfortable meeting your commitments, why not consider forgoing an unnecessary regular expense and donate the cash instead?
If there is just no wiggle room at the moment, get beyond the dollars and cents and create a time commitment instead! Think about the amount of time you’d like to intentionally contribute to a cause on a weekly or monthly basis.
Giving your time is just as beneficial as a cash donation, and possibly even more personally rewarding.
As your finances begin to shape up and you find some breathing room, you can begin to include a small donation in your plan too.
How will you give?
Now you’ve determined a figure or percentage you can afford to give, decide whether you’ll set this up as a recurring donation to a charity or keep this money aside for flexible giving in a separate account.
Or, you can do both. Split the amount you can afford to give between an electronic recurring donation and a ‘giving fund’ for those occasions you feel moved to give spontaneously.
Some employers offer workplace giving programs which are becoming increasingly popular. It’s a simple way to regularly donate to charities or organisations that are entitled to receive tax-deductible donations.
You nominate the charity and the amount to be deducted from your pay. Your employer then makes the donation directly to the charity each payday. Deductions are then claimed via your tax return.
Is your donation tax deductible?
Your generous giving can come back to you too. Some charity donations can be claimed as tax deductions on your individual tax return each year and, depending on the amount you give, can be quite lucrative.
The organisation you donate to must be endorsed as a Deductible Gift Recipient (DGR) and to be entitled to the deduction, you can’t receive any benefit for the donation. For example, purchasing a ticket in a charity raffle doesn’t count.
The gift must be also be money or property, which includes financial assets such as shares.
If you’re not sure whether the charity has a DGR endorsement, or that your donation will be deductible, check out the rules in your country.
And remember, the more you give, the more you recieve!
With Christmas just around the corner, from The Investor’s Way team I want to wish you all happy holidays! Enjoy time with your families and loved ones. Put down your phones, talk and make it a special time to connect, reflect and inspire.
In the spirit of giving, I am running a giveaway for people who access my FREE report and share the love. You can access the giveaway here. Share with your friends and family and you can access some awesome gifts.