Make 2017 the year you finally budget for charity
If you're an avid reader of the news, or even just a casual internet user, then you know the state of the world isn't exactly great at the moment.
You probably want to help in whatever ways you can, and that often means financially supporting the organizations you care about. But maybe you're not totally sure how to work that into your budget.
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As calls for monthly donations to nonprofits doing essential work become more and more common — and trust us, they'll need it — these tips will help you have an impact without breaking the bank.
1. Figure out how much you absolutely need to spend this month.
First, some budgeting basics. Lazetta Rainey Braxton, CEO of financial planning firm Financial Fountains, says that in order to get a clearer picture of how to make room for donations this year, you'll need to calculate your "committed" expenses.
That means housing payments, bills of any kind, medical expenses and so on. Anything you've committed to spending cash on every month falls into this category.
2. Assess the money that's left over.
Once you have a handle on your committed expenses, the rest falls under the category of "discretionary income." This is the money you use to dine out, see a movie or buy that video game you've been eyeing. This is likely where you'll have to make some adjustments.
Which brings us to...
3. Embrace inevitable trade-offs.
You knew it was coming. Braxton says fitting donations into a budget means deciding what we can do without.
"Often that means there are some trade-offs that have to come in play," she says. "Because if you're introducing a new cash flow that's hitting your bank account — and I don't want to call it an expense, it's an investment — you have to figure out where it fits."
You need to ask: What will you trade off to be able to contribute an extra $25, $35 or $50 to charity every month?
For example, if each week you spend $30 on salads, $20 on beers at happy hour and $15 on coffee, take a week or two off and put that money toward a cause you care about.
Trade-offs don't have to be painful. If you love the morning ritual of stopping at your local coffee shop, keep it. But if you were looking to cut back on alcohol in 2017 anyway, skip happy hour a few times a month and donate that cash where it's needed.
Image: AMBAR DEL MORAL/MASHABLE
4. Do your research.
Once you have a handle on your financial situation, the next step is thinking clearly about where your interests lie, and set specific goals for causes that matter to you.
"Too often we lead from our hearts and we don't take the time to use our heads as well," says Sandra Miniutti, vice president of marketing at Charity Navigator, which rates charities to "guide intelligent giving."
Miniutti suggests thinking of charitable giving in the opposite way you might think of investing in the stock market.
"With your regular finances, you're investing in very diverse ways in order to reduce your risk," she says. "We would say the opposite applies for charitable giving — that you're better off concentrating your giving. We recommend that donors pick just a few charities, make a commitment to those charities and stick with them for the long haul."
Consider the financial health of an organization — that is, how much of a charity's budget goes toward its cause versus overhead — and how committed it is to transparency and accountability.
Ultimately, when trust is everything, proper research empowers donors to make confident decisions — and it also means more bang for your buck.
5. Figure out where you stand on one-time vs. monthly giving.
The choice between one-time and monthly donations is a matter of personal preference. But Miniutti says recurring donations benefit both the donor and the recipient. They can help you break down donations into manageable sums, and also serve as an automatic, set-it-forget-it solution that doesn't require much upkeep.
From a charity's perspective, monthly donors signal to an organization that the work it's doing is important.
"You've made a commitment to being a partner to them, and they know that they can then count on you for that money each month," Miniutti says.
A pool of monthly donors brings in money that can help relieve a lot of the budgeting challenges most organizations face.
6. Make it easy on yourself.
In addition to regular donations, consider programs that help you bake charity into your daily routine.
Amazon Smile lets you purchase anything as you normally would on Amazon.com, but 0.5% of eligible purchases go toward the charitable organization of your choice (from the Red Cross to local chapters of the ACLU and Planned Parenthood).
There are also several apps that help you with microdonations, and certain credit cards, airlines and hotels with loyalty programs will allow you to donate unused points or miles to impactful organizations.
7. Consider it an investment.
If you don't have the time or skill set to volunteer for your chosen cause, a financial commitment is a tangible way to support charities serving marginalized communities and those in need.
"I wish people would take more ownership of the role that money plays in change, instead of saying money is evil because those who've had money have abused it in issues of power," Braxton says.
She truly believes our dollars can effect change on a cumulative basis.
"I let a client decide what works for them," Braxton says. "But [I make it] very clear that I believe money has a lot of energy behind it that is useful ... and can be used for individual good and the common good."
