How to Budget for Giving to Charity

June 9, 2020 Posted by : Jorge Cardozo
0 comment

Over the past two weeks, hundreds of thousands of citizens have gathered in cities across the US to demand that changes be made to our current policing and legal system. And though the Black Lives Matter movement is only just getting started, it has already managed to capture the attention of the entire country - and the entire world.

Voting With Your Feet - and With Your Dollar

As these events unfold, we’ve all been bearing witness to the fact that Americans have the power to vote with their feet by marching with their fellow citizens. It’s important to remember that giving to charity can also have a powerful impact on the world around you. With that in mind, it’s become a top priority for many people to build a budgeting strategy that will allow them to make one-time or regular contributions to organizations like Black Lives Matter.

Four Tips for Incorporating Charitable Giving Into Your Budget

The key to building a budget that will enable you to give to charity is to work with what you have. Most of us can afford some degree of contribution, but it will be counterproductive to your long-term financial goals if you donate more than you can afford. You should therefore look at building an altruistic budget as a sort of financial balancing act - one that will need to be adjusted as your financial circumstances change.

Here are three simple and effective ways to start giving to charity while continuing to work within your means:

  • Start by making small monthly donations, then work your way up. The best way to find out exactly how much you can afford to give to charity each month is to start small - say, by donating 1- 5% of your monthly income - and then gradually increasing that amount. For some people, the maximum amount that they’ll be able to give will be 10% of their monthly income. For others it will be less. Worry less about making your maximum contribution in your first month, and focus more on getting started with the process of giving. As your giving evolves you can set aside an annual budget for giving in a separate savings account. 
  • Do some background research into the organizations that you’d like to donate to. In order for our financial contributions to have maximal impact, it’s important to know which organizations will be able to put them to optimal use. Sites like CandidCharity Navigator or BBB Wise Giving Alliance provide scores and insights into the effectiveness of organizations. While you are doing your research, always make it a point to carefully review the mission statement of any cause or organization that you’d like to support and the diversity of their Board. Also, keep in mind that while supporting local organizations is always a good place to start, you’ll typically be able to have a greater impact by donating to organizations that have a national or global reach.
  • Focus on contributing to one (or two) organizations. The world is wrestling with a great number of serious problems, which often leads people to donate small amounts to several charitable organizations. While this is undeniably a commendable strategy, you’ll ultimately be able to have a more tangible impact by focusing your energy - and your budget - on one or two organizations. For example, donating $100 to Black Lives Matter will have a much more measurable impact than, say, donating $10 to ten different organizations.

Now more than ever, it’s essential for each of us to do our part to defend our neighbors, our communities, and our institutions. Let’s never forget that we have the power - as individuals and as groups - to influence the direction of history. When we develop personalized strategies for budgeting and donating, we make it that much more likely that the causes and organizations we support will flourish.

Subscribe to Our Blog

At Spartan Capital Intelligence, our mission is to demystify Wall Street and simplify the investment process. If you’re interested in learning more about investing, please sign up for our blog. 

Blog Subscription

Investing 101: What is a Hedge Fund in Simple Terms?
Investing 101: Art as an Investment

About Author

Jorge Cardozo
Jorge Cardozo

Jorge has over eight years of experience in wealth management and economic research, managing more than 600 million USD. He has invested in all types of securities, ranging from traditional assets (fixed income securities and funds, global equity) to alternative assets (real estate, hedge funds, and private equity). Jorge holds an MBA from a top global program.

Related Posts
“Wondering How to Spend Your 2020 Tax Return? Consider Investing”
Supporting Financial Wellness in the LGBTQ+ Community
Should You Open a Roth IRA or Traditional IRA?