How to make your philanthropy count

Individual Americans donated $292 billion to charity in 2018, according to the National Philanthropic Trust. That accounted for 68%—the largest source—of charitable giving in the country, reflecting an uptick from the year prior. Even after you decide you want to begin volunteering or donating money, it can be tough to know where to start.

While many people have likely participated in group charity events, like a corporate fundraiser, the trend shows that Americans are choosing to get more involved in giving back.

Even after you decide you want to begin volunteering or donating money, it can be tough to know where to start. Budding philanthropists often have trouble knowing how to choose an organization to work with. Understanding the financial implications of giving and where donations will be used can be difficult to navigate.

Luckily, there are plenty of reputable and accessible resources—from watchdog groups to academic research—that can help answer those questions. As you get started on your philanthropic journey, here’s a handy guide.

Identify Your Passions, Then Do Research

It can be overwhelming to sort through the seemingly countless causes that need attention, so the best place to start is to think about what you have seen in the news that sparks your interest and concern. You may be passionate about reducing the impact of climate change, but need to narrow your focus further to determine whether you’d like to help on a local, domestic, or international level, said Ashley Post, spokesperson for Charity Navigator, an independent charity evaluator website. From there, digital resources are available to help guide your research.

If you don’t have a charity in mind, groups like Charity Navigator as well as Charity Watch and GuideStar are among the most widely-cited charity evaluators in the country, and offer lists according to topic to help you identify groups that match your interests. Around November and December each year, trusted publications like Consumer Reports publish lists like Best and Worst Charities for Your Donation, rounding up much of the data from the aforementioned sites in one convenient location.

When you’re determining which causes are important to you, it’s helpful to also identify organizations whose work is labor intensive and may require volunteers—such as soup kitchens or cleanup efforts. For many, that hands-on approach is more appealing than a financial contribution. But if you’re looking to donate, the Better Business Bureau’s Wise Giving Alliance publishes regular reports about recent disasters, as well as reports about specific charities (which is helpful when you already have a charity in mind you’d like to research).

“These websites can help you get a sense of how organizations spend your donations,” said Kathleen McCarthy, director of the Center on Philanthropy and Civil Society at the City University of New York. “If there’s an organization that’s doing cancer research and 90% of its funds are spent on fundraising, then that’s a real red flag.”

Seek Out Expert Financial Advice 

Once you’ve identified a cause and the scale to which you’d like to get involved, it’s time to seek out a financial advisor. Speaking with an advisor or tax expert is key to help you parse existing tax laws that may guide how much you give and when. The advisor may also point you in the direction of donating something beyond hard dollars. Stocks, for example, are one type of asset you can donate to a charity that can help you avoid paying gratuitous taxes. Fidelity Charitable, an arm of Fidelity Investments, offers digital guides on how to improve your charitable financial habits as well as the option to open “giving accounts.”

While a financial adviser is able to tailor advice for how much to give based on your own income and portfolio, McCarthey said the average American donates around 1-2% of their discretionary income to charity each year, though that percentage increased “exponentially” among higher income brackets who typically benefit from income-specific tax breaks.

You can have an easier time thinking about how much you spend on charitable giving each year if you automate a smaller donation monthly, much like you would pay for a subscription service, Post said, rather than donating a larger lump sum at the end of the year.

Making Your Donation Count

When you can, it’s helpful to a charity to donate directly through their website rather than through a third-party like Facebook or Instagram. While those platforms make donating convenient, Post said, your data is not shared with the charity. That is both a good and bad thing: It means the social platform is protecting its users privacy, but it also keeps donors from forming a relationship and better familiarizing with a given charity. When you donate to a charity, it has the ability to send you updates about the cause and how your money was spent.

Ultimately, getting involved in any capacity, be it through donations, volunteering, fundraising or building awareness, is something everyone can do with the right tools and research. “Philanthropy is a word that has a lot of weight behind it,” Post said. “But really, it’s something we can all be a part of.”

Alexandra Mondalek is a freelance writer living in New York. She regularly covers fashion, business and culture. Find her on Twitter @amondalek and Instagram @hautetakes.  Sept 20, 2019