The following post is from contributing author Laurel Gray.
It is a mistake to think that frugality and charity are mutually exclusive. “I was trained from the beginning to work, to save, and to give,” said noted philanthropist John D. Rockefeller, Jr. Even if you are not a Rockefeller, these three rules can be applied to your family’s monthly budget—no matter how tight.
In tough economic times charitable donations trend downward, but people do continue to give. According to a study by the Center on Philanthropy at Indiana University, 65% of U.S. households gave to charity in 2007. The average annual household contribution was $2,213 and the mean was $870. This works out to around 3% of annual income for most households, according to charitynavigator.org.
If you are clipping coupons and trimming expenses, $2,213 probably sounds like a astronomical sum. But there are many ways to work giving into your budget without torpedoing your ongoing efforts at thrift.
If you intend to make charitable contributions during the course of the year, plan ahead to make every dollar count. Here are a few hints to help you get the most bang out of your charity buck:
Trust, but Verify—Determine which charity is most in line with your interests and beliefs, then investigate the charity’s financial practices, especially its overhead costs. Make sure the charity meets IRS qualifications so that your donation will be tax deductible.
Double Up—If your workplace offers a matching program, review program rules to determine the level of matching (some programs match dollar for dollar, others are percentage-based). Small donations throughout the year can add up to make a big impact when coupled with your employer’s contribution.
Give as You Go—If a payroll deduction seems too much to bear, then consider signing up for an online giving program such as iGive.com. Your online purchases from affiliated vendors generate small donations to your chosen charity. If you shop online frequently, these donations will add up quickly.
Gifts with Meaning—If you are stumped for a gift-giving idea, you can make a charitable contribution in someone else’s name. Many charities like Heifer International and The Nature Conservancy offer gift programs and will even send a card to the recipient detailing the gift that was made in his or her honor. These donations are a great idea for the person “who has everything,” while helping you increase your annual giving
When the Well is Dry
If you are scraping to make ends meet and can’t spare cash for a donation, there are still ways to work philanthropy into your budget. During the holocaust, teenager Anne Frank wrote, “How wonderful it is that nobody needs to wait a single moment before starting to improve the world.” Don’t let a lack of liquidity stop you from starting to improve the world:
Purge—Go through closets, the attic, and the basement and donate unused items in good condition to Goodwill, your hospital auxiliary’s thrift shop, or other collection site. Remember that many organizations accept housewares, electronics, and even furniture. Ask for a receipt and follow IRS rules for non-cash charitable donations.
Think Outside of the Box—When cash is tight, think of other ways to give. Donate art or antiques to a charity’s fundraising auction. Place land in a conservation easement. Donate a clunker car or boat. Even accumulated airline miles can be gifted. Take an inventory of tangible and intangible assets and determine which items you can donate.
Give of Yourself—According to the National Philanthropic Trust, the estimated dollar value of volunteer time was $20.85 per hour for 2009. By volunteering your time to a charitable cause—be it building a house with Habitat for Humanity or volunteering at a literacy or food bank program—you can make a difference in your community.
Giving as a Way of Life
Perhaps no one exemplified Rockefeller’s work/save/give advice better than Lake Forest College alumna Grace Groner. After living through the Great Depression, she worked as a secretary at the same job for 43 years. She lived in a Spartan, one-bedroom house and led a simple, frugal life. When she died, she left a whopping $7 million dollar endowment to her alma mater. We may not all be in Ms. Groner’s league, but we can all make a positive impact in our own way by making giving a part of our financial strategy.