Charitable Giving in My Budget

Happy Thanksgiving! I love this holiday so much because it emphasizes reflection on what we’re thankful for, and it’s the perfect start to the holiday season. The air has started to get crisp, and my whole neighborhood smells like woodsmoke from people starting to use their fireplaces. It’s all very hygge. But it’s also a time to think about your charitable giving. 

I planned on this being a short post since it’s a holiday today, but it turns out I have a lot to say about charitable giving. If you’re spending time with family today, I won’t be offended if you bookmark this post and come back to it another time; this holiday is most definitely not about phone or computer screens! (it’s about TV screens right? Football? Idk, I don’t speak sports).

Thankful

I’m thankful for my health, my family, and my friends. I’m thankful that SunCat’s health has stabilized and that StarDog and StarCat are so good at making me giggle. I’m thankful that I decided to start this blog a year ago as a creative outlet, and I’m thankful for the support of the amazing personal finance blogging community. I’m also so thankful that I have financial security. In the past year, I’ve paid off my consumer debt, and I’m making regular progress on my student loans. My emergency fund can cover about three months of expenses if I scrimp, and I’ve started saving for a down payment.

Charitable Giving and Giving Back

A big part of being lucky enough to have that financial security is making sure to give back. Charitable giving has always been so important to me, from learning to tithe in church to volunteering my time when I was a poor college student (and still now, when I’m a cheap young professional). I’ve written before about my love of the YNAB app for budgeting. One line item in my YNAB Budget is “Charity.” Every paycheck, a portion of my income goes to that line in my budget. Then, throughout the year, when I find a cause I want to donate to, I know I have the funds and that I planned for that donation.

Why Should I Give?

I think that everyone, no matter how tight their budget, should give back in some way. Why? Because we’re not animals. Because we signed a metaphorical social contract, and if you want the world to be a better place, you need to play an active role in making it one. Additionally, there is some evidence (though mostly correlational) that charitable giving increases happiness. There’s a mental health benefit to giving (maybe)!

If you can’t give money, give time. And even if you can give money, give time too. Can’t give either? Challenge that assumption. Where is your non-essential spending going? Can even a small fraction of that be diverted to charitable giving? Can you fit in an hour a week to help with a local group? You don’t have to give loads of money or have a donor-advised fund to make a difference. $5 from thousands of individuals adds up.

Give Intelligently

I’m not someone who donates spur of the moment because a canvasser caught me outside the metro station (the introvert in me cringes every time one of them tries to pull me into a conversation, and when I am caught, the polite Midwesterner in me takes 15 minutes to extricate myself…). Since I only give a limited (pre-planned and budgeted) amount, I want to make sure it’s doing the greatest good. If you’re thinking about giving to a charity, I recommend looking it up on Charity Navigator. They give each organization a score based a variety of variables, and you can read about any concerns with that organization’s spending as well.

Consider Unintended Consequences

Awhile back, Toms shoes started booming in popularity, and I still see quite a few of them around. People raved about the altruistic goal to donate a pair of shoes for every pair purchased. I mean, who can complain about donated shoes? Turns out, economists can. Papers have been published that suggest Toms donations negatively impact the local market, hurting local shoes salesmen and cobblers. This depresses the local economy. There’s also some concern that giving isn’t as efficient and thus shoes go to people who don’t necessarily need them or who could afford to buy their own (or might need other things more than shoes). (side note: this satirical video is hilarious)

I don’t point this out only to hate on Toms (though I think they’re a pretty silly way to spend your money). Instead, I point it out because it’s an aspect of the story that most people don’t consider. Make sure that you’re not overlooking something similar if you donate based on a tagline or the latest effort du jour. Another example (so I’m not just raining on one parade): remember the ALS ice bucket challenge? When it when viral, the organization was flooded in funds that they couldn’t efficiently distribute at a reasonable pace. Meanwhile, plenty of other groups fighting issues that are just as important were left in the dust. And now, how many people are still giving to the ALSA? Their need didn’t disappear with all of those one-time donations. Organizations, to maintain a consistent level of programming and progress, need a consistent level of funds.

Consider Timing

Okay, yes, I’m writing this post at Thanksgiving, right at the beginning of the holiday season. But most organizations will tell you that they’d much prefer donations at other points in the year. When all of their funding comes in one large wave, it’s hard for them to plan their budget long-term. This is NOT to say don’t donate now. Instead, donate now, AND consider also donating earlier or in regular intervals next year (if you don’t already).

Where I Donate

I might donate small amounts to other causes I care a lot about over the year: women’s rights and education, animal welfare, local education initiatives, etc. But the bulk of my donations goes to Heifer International. Why? I firmly believe that food security is one of the biggest problems in our world today.

I struggle with groups that focus on donating things or money without increasing a person’s agency, which is why I love Heifer. They donate livestock and agricultural resources (hey, I told you I’m a farm girl at heart) to food insecure families. Then, that resource grows. A family that receives a cow has milk that they can consume or sell. When their heifer gets pregnant (which is necessary for milk production to continue), they give that calf to another family in need, so the benefit of one donation spreads. They do the same with goats, chickens, and beehives.

I love the mission and the mode of implementation. You’re not giving food; you’re giving a way of increasing a family’s food production. That means you’re reducing the risk of aid dependency or disenfranchisement of recipients.

Ooh, and prizes!

Bonus for all of you sci-fi/fantasy nerds: I donate to Heifer International through Worldbuilders each year. The group was founded by Patrick Rothfuss, one of my favorite authors ever, and it’s a fun way to join others for a massive fundraising effort. The bonus is that your donations translate into lottery entries, and each year they mail out hundreds of prizes (books and games) to donors who win. I’ve won in three out of the past four years (your odds obviously go up the more money you donate).

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I hope you’ll consider donating time, money, or both this year and every year in the future. There are so many good organizations out there doing amazing work, and I didn’t even touch on some of the benefits of focusing on local organizations, where your money can create added value in your own community. So this holiday season, as you’re buying gifts and booking travel and cooking mountains of food, enjoy and celebrate. But also take a little time to think of those less fortunate, and send a little love their way.

What are your favorite charities, and how do you most like to give back? I’d love to hear!