How to Manage Your End-Of-Year Charity Donations

November 30, 2015

Connect Member

Helping people to recalibrate their connection between life and money.

It’s that time of year again —  when the final push for charitable requests starts to flow in before the end-of-year deadline comes along. When the holiday season is in full swing, people often look at their incomes and decide if, and to whom, they will be giving. Before reaching into your wallet, though, make sure to have a charitable giving plan in place and stick with it.

Personally, even though I give throughout the year to various charities and organizations, I still receive requests from certain groups as if I have not given anything in the past year. This results in my “double” giving without always realizing it. Judging by my conversations with clients and friends, donating to charity at the end of the year is one of the most unplanned cash flows in people’s annual budgets. Charitable giving is something that is very important to most people, but it is also one of those things we say “yes” to in the moment, but might have regrets about after the fact. In order to not have buyer’s remorse over your donations, it is important to plan out your giving ahead of time.

To start, make a list of organizations you want to contribute to before writing any checks. Then, place the organizations into various categories, such as below:

1. Heart Strings (You can further break this down into even more specific categories — i.e. homeless, medical, children, animals, etc.)

2. Network/Friends (Groups you attend for your personal network or to support friends)

3. Business (This can sometimes go under “marketing” or “entertainment.”)

4. Sometimes Need To Give To (Church/temple, friend, etc.)

After this is done, see how many of the categories you fill with your donations and ask yourself if you are happy with the way your giving is spread out. Adjust your list accordingly. When your list is finalized and you receive additional requests for gifts, check if the request somehow fits into your original plan. If it does not, decide if you want to add it on top of what you have already agreed to give. If you say no, do not feel guilty. You are taking control of your finances and have already divvied up your donation budget. For example, I received a call from someone about a race she was participating in to fundraise for a charity. It happened to be for a cause that was important to me, but I already donate to specific organizations for that purpose. I asked who was organizing the run and, when it turned out not to be one of the organizations to which I normally donate, I had no problem turning my friend down, because I already gave to similar organizations supporting the same cause.

You should also take into account organizations or boards you belong to. These organizations should be your priority; as a board member, it is also your responsibility to convince others to donate to the organization. One of my fellow board members decided to stop contributing to other charities in order to meet her board responsibility to a charity we were serving on. This allowed her to be more focused and thoughtful in her giving.

It’s also worth it to consider establishing a line in your budget for charitable giving throughout the course of the year. You do not have to give your full donation to an organization at once during the holiday season; rather, you can give monthly or quarterly. Nonprofits are businesses and need cash flow throughout the year. One of my clients put together a quarterly giving plan and found that donating over time helped her feel more comfortable with her cash flow while allowing her to give to a capital campaign that was important to her without affecting other important giving.    

Together, these tips should help you establish your charitable giving list for the year. In doing so, you can take control over all the requests you are receiving and make that pile of mail smaller. You can even go ahead and carry this plan forward for 2016. Enjoy the holidays and the spirit of giving by knowing you are helping others while still being in charge of your finances.

Joan Sharp is a member of the DailyWorth Connect program. Read more about the program here.