Personal Finance Advice

The best personal financial budget allows for some charitable giving.  If you manage your finances well then chances are you have enough money to give some back to a worthy cause, and as a bonus you might be eligible for additional deductions when tax time rolls around.

Just like with any other aspect of your personal finances, you want to make sure that the charity you give money to is using the money in the most effective way.  After all, you work hard for your money so why would you give it to a charity that squanders it away on exorbitant administrative costs and other expenses instead of putting the majority of it toward the cause you’re trying to contribute to?

Follow this guide when trying to decide which charity to contribute money to:

1.  Choose a charity you are actually passionate about.  Be selective about the charities you choose to give to.  There are so many charities available - all of which are looking for money - so sometimes it can seem like a daunting task to choose which ones you want to give money to.  Narrow down the prospective charities by choosing ones that do work in a field you are interested in.  If you feel compelled to give to the poor, give money to a homeless shelter.  If you are passionate about animals, contribute to the local Humane Society.  If liberal arts are your passion then send contributions to a community theater.  There is no end to the potential charities that will gladly accept your donations.

2.  Make sure the charity is non-profit.  Some for-profit organizations do a pretty good job of masking themselves as non-profit, whether intentionally or not.  If you give money to a for-profit organization then your dollars may not be used in a charitable way and the donation may not be tax deductible.

3.  Choose charities where your money will go to the cause.  Some charities work more efficiently than others.  Choose a charity where the greatest percentage of your donation will go directly to the cause as opposed to administrative costs and advertising dollars.  Although it’s not easy to find many charities to choose from where 100% of the donation goes directly to the cause - charities have operating costs just like any other business, after all - you shouldn’t give money to charities who are going waste the majority of your donation on other expenses.  Most charities list the percentage of donations that go toward administrative costs on their websites or within literature they distribute.

4.  Choose a highly rated charity.  Not all charities are created equal, and unfortunately there are some charities that aren’t very charitable at all.  The vast majority of charities are actually working toward helping a cause, but there are some so-called charities that don’t do much more than line their own pockets.  Before contributing to a charity - especially if it is one you have never heard of before - check it out through the Better Business Bureau.  If someone has filed a complaint about a certain charity you’ll find out about it using that website.

5.  Get involved.  If you really want to get a glimpse at how charities use the contribution dollars they receive then consider spending some time volunteering with the charity.  You’ll see first hand how the money is used to help whoever the charity is supposed to help.

Be sure to give something.  Even when money is tight you probably have the ability to give at least a few dollars to a worthy cause.  Do it to help make the world a better place or do it for the potential tax deduction, but just be sure that you do it.