Want your charitable donations to have a bigger impact? Turns out, it’s as easy as making a few simple changes.
When you stop and look at the big picture, the way you approach your charitable giving can be almost as important as how much you give. A lot of us tend to give automatically, in response to emotional requests made during the holidays. And while it’s wonderful to give from your heart, it’s even better to give from your head and your heart.
So take the time to lay the foundation now, and when you’re ready to make a donation, you’ll see just how impactful these small changes can be.
Seven changes to make your charitable giving more effective:
- Focus on what matters most to you. You may want to set some money aside to support fundraising efforts by friends and family or to respond to unexpected events, such as natural disasters, yet try to allocate most of your charitable dollars to your dedicated causes.
- Hit the books. There are lots of resources that can help you find great charities that also are well run. Three places to start your research are GuideStar, GiveWell and the Center for High Impact Philanthropy. Look for organizations that demonstrate they can accomplish a lot with only a little. Need help finding charities? Use our charity search.
- Test the waters. If you’re considering a new charitable organization, it’s okay to start with a small contribution. Ask for recommendations from people you trust or who share your charitable interests. And get firsthand experience by volunteering. It’s one of the best ways to become a smarter donor.
- Go dollar for dollar. Take advantage of opportunities for matching funds, such as if one of your favorite charities is participating in a challenge grant, that’s the time to give. Your charity will receive a larger gift, at no extra cost to you. The same is true if your employer matches gifts to charitable organizations. Not sure if your company offers this benefit? Check with your Human Resources department. It could make a difference for your favorite causes.
- Timing is everything. Be sure to give when and how it makes sense for you. People usually respond quickly, in the easiest way: with a check, credit card or online contribution. But the quickest way is not always the smartest. Use a credit card, for instance, and your charity might be charged a fee on your gift.
- Be strategic about taxes. If you’re considering anything larger than a token gift, consider the impact on your tax bill. Would you get a larger tax deduction if, instead of cash, you donated appreciated securities or complex assets? Should you make the gift this year? Or are there reasons to push the tax deduction off to next year?
- Consider a donor-advised fund (DAF), like a Giving Fund from TIAA Charitable. DAFs are becoming more popular every year because they combine tax benefits with the flexibility to benefit multiple charities — on your own timetable. While you decide which charities your Giving Fund should support, your contributions to the fund are invested. That means they have the potential to grow — and grow tax-free — giving you the potential for larger gifts to the causes you care about.
Most of all, remember charitable giving is personal. The biggest reason to take stock of your giving periodically is to make sure it reflects — and is achieving — your charitable goals.