Budgeting for Charitable Giving

March 31, 2022

By Erin Belby

April is financial literacy month which makes it a great time to take a fresh look at your financial planning and budgeting.  As you do so, don’t forget to include charitable giving in your process.  Here are a few helpful ways to think about how to plan for your philanthropy:

Deciding how much to give

A great way to decide how much to give is to look at your full financial picture and understand how your values align with your spending. As a CPA, I like to look at things analytically and set goals.

My tax return is a consistent, regular measure of financial income every year, and I often use it to evaluate my annual giving goals and set new ones going forward. For example, last year I gave 2% of my adjusted gross income to my favorite causes. This year, maybe I decide we can give more because I feel really good about our family’s financial position; or maybe I decide we should pull back a little because the thought of kids’ orthodontia reminds me we might need to save for healthcare expenses.

Whatever I decide, I know it will be intentional, and that’s the ultimate goal.

Deciding where to give

If you’re new to the philanthropic landscape, take time to assess what causes and activities really mean the most to you. Ask friends with similar values what organizations they like to support. Start local and do a quick google search to find organizations that are addressing the issues most near and dear to your heart in your community. Or check out our list of local nonprofit organizations here.

As you become a more mature philanthropist, you’ll make connections with organizations that you have a giving history with- you’ll be added to their mailing lists and invited to their events. Try not to get caught up in the glossy paper and glamorous galas – but truly understand their impact- who are they serving, how far is their reach, are they able to innovate and pivot to changing needs?  What does your assessment mean for your giving plan?  Should you double down on these organizations or diversify your charitable dollars?

Fitting your goals to your habits

Once you know how much and where you want to give, make plans for how to give and keep it simple.  If you like to save in “buckets,” you could set up a giving “bucket” and make all your gifts at year end. If you need automation to keep things easy, set up monthly recurring gifts direct from your bank account or credit card.

However you do it, prioritize the organizations that mean the most to you first, while also setting aside some funds for the solicitations that come up in the moment; like your friend’s fundraiser for their favorite charity or the neighbor kids’ read-a-thon pledge.

Giving beyond your Lifetime

Now that you’re comfortable setting annual giving goals and achieving them, start thinking about your longer-term lifetime goals. Do you want giving to be a part of your legacy? How can you include your list of favorite organizations that you’ve carefully crafted and cared for over the years into a lasting gift after you’re gone?  This is great time to reach out to La Crosse Community Foundation to help you find ways to meet your goals. You can start by learning more here, but Jamie would also love to get your call! 🙂