Charitable Donations

[bikebum]

Hello Mustachians,

How much do you guys donate to charities? Do you use any rules like a percentage of income? If you volunteer, do you assign a monetary value to your time to keep track? Also, what are your favorite ways to donate/volunteer?

I always told myself I would start doing this once I had a good career and bought a house; here I am.

[chicagomeg]

Right now we're donating $50 a month. When we finish pay off debt (Next Month!!), I want to increase it to $100. Truly, that's about 2% of our income. I also volunteer a few hours a week doing taxes. Personally, my real plan is to donate much more of my time and skills after retiring, but it's good to keep in touch with organizations that are important to us in the meantime.

Right now, we do quarterly donations to an amazing organization I volunteered with in college, called LIFT; to the rescue we got our dog from, which paid for an expensive surgery to save his life; and we do 2 Kiva loans. The first two are automatic from my online Bill Pay; the third we do together but if something else comes up we want to give to as a sort of one-off, we do that instead.

[JamesL]

Last year I donated around $180, which is 1% of my take home pay. It sounds pretty pathetic, but since I take home such a low amount it's not *that* bad I guess. Especially since that's about a month worth of expenses.

This year though, I plan on volunteering instead. I'm doing 2 days through my work (although my work still pays me for the community service so it doesn't really count). I also plan on volunteering for Habitat for Humanity. I almost feel guilty because I'm sort of using that to learn some skills that will help me in the future (making me more handy).

Because of what I earn, I figure I'd rather donate my time instead of my money because I know where my time is going (physically building something for someone), and I save money (although honestly I'd rather donate time rather than money anyway, because I get to see first hand what my donation is doing for people). I value my time at around $35/ hour (since my work pays for school, insurance, benefits etc). I plan on volunteering at least a a full 5 days worth, so that's say 40 hours*$35=$1400. Definitely beats $180 IMO. I'll probably spend $50 on gas just getting to the volunteer places (most of the habitat for humanity are a bit south of me), so it's not like I'm doing it for *free* per say.

[anotherAlias]

I have a couple favorite charities that I feel strongly about that get about 10% of my income.  I've always felt that I've been very blessed and should pay it forward.

[10moreyears]

10%.  Since i have been tithing about 7 years ago my financial life has improved. it's amazing how much less materialistic you become when you can give away 10% of your income. Money and the "stuff" become less important. My wife and i agree that we have been fortunate to have had money and goodness flow back to us because of our generosity. The bible is a good resource of information on how to handle your financial life!

[c]

I have a monthly donation to http://www.hrc.org but otherwise my main giving is to family and friends when they're running a race or raising money for something local, eg a friends medical bills. Probably about 5% of my gross.

[sherr]

10%.  Since i have been tithing about 7 years ago my financial life has improved. it's amazing how much less materialistic you become when you can give away 10% of your income. Money and the "stuff" become less important.

+1

We also give about 10% and also volunteer regularly at a food pantry. My favorite charity is a wonderful local organization that is a combo homeless shelter / 7-step program that not only provides food / shelter for homeless people but also helps them break the addictions they are facing and generally get their lives back together. It is almost entirely run by graduates of the program, and they keep costs extremely low. Healing Place of NC if you're interested. My wife's favorite charity is an organization that works with inner city kids. We also give to our church and various other organizations as the need arises.

I agree that giving away 10% of my income does wonders for my mindset. Yes it will take me longer to retire because of it, but I am prone to greed / money hoarding so giving away my money is extremely therapeutic for me.

[No Name Guy]

How much:  couple grand a year out of pocket - both direct check writing and through the work based paycheck deduction to the company sponsored thing (the company thing: They hand out large grants for capital projects to various charities here in Washington - things such as refers for food programs, vans, etc). 
Rules:  Nope....what feels right.  I use Charity Navigator to insure those who I give to make good use of the money.  I also check out their tax forms every year to double check on charity navigator.
Volunteer:  I don't assign a value, however the group I volunteer with does if certain tasks (e.g. high skill) are done.  I think they get to take credit for 25 / hr on those.  More grunt volunteer work doesn't get credited as an "in kind" donation.  One nice thing however that I get on my compensation package is that for every 25 hours I put in, the Company will chip in $250 to the org.  So my hours are doing double duty.  It sure is nice to hear from the orgs that they received the hours matching check - it really hammers home how satisfying the work is (I get to enjoy it AND the org gets money - talk about a win / win).
What:  I'm a hiker, so I like to work on the public lands trails here in Washington with both Washington Trails Association and the Pacific Crest Trails Association.  Physical volunteer work is a nice change from sitting at a computer. 

[Christiana]

We tithe ten percent to our church, plus some additional, scheduled giving each month, which brings the total to 11% or so.

[bikebum]

Thanks for the replies! I was originally thinking around 10% of income but then it seemed like too much. You 10 %ers have made me reconsider. Do you use 10% before taxes or after. I usually base everything on my after tax income since I don't have hardly any control over the taxes.

Props to all you givers out there, including those that give smaller amounts. It all counts!

[sherr]

Thanks for the replies! I was originally thinking around 10% of income but then it seemed like too much. You 10 %ers have made me reconsider. Do you use 10% before taxes or after. I usually base everything on my after tax income since I don't have hardly any control over the taxes.

We do 10% after taxes, with the plan to continue donating 10% of our income in retirement. So I guess technically we will be giving 10% of any money that goes into our 401ks or other tax-deferred accounts, but will not be giving 10% on money that goes straight to the government.

[John74]

I have no fixed rule. I set up a charitable gift fund which I funded when my income was higher. Some years I contributed a lot of money to the fund and some years I contributed nothing in order to maximize my charitable tax deduction. I now use that fund to do my charitable giving. So, technically I now give 0% of my income to charity.

[Kierun]

No set amount but I donate to the Wounded Warrior Project

[Nords]

How much do you guys donate to charities? Do you use any rules like a percentage of income? If you volunteer, do you assign a monetary value to your time to keep track? Also, what are your favorite ways to donate/volunteer?

We donate about a quarter of my pension to a local food bank, a local homeless shelter, and AccesSurf.  That percentage just sort of happened as part of reducing our taxes and thinking about boosting our philanthropy.  We don't have much of a clue, let alone a long-term plan.

We really like using Fidelity's charitable gift fund and sending the grants anonymously.  The CGF uncouples the timing for our convenience.  It means that we can donate whenever our tax situation makes sense (especially for appreciated stock shares) and we can lump donations for a higher deduction.  Then we can use the CGF to distribute the grants whenever that makes sense (fundraising drive, a matching challenge, or just annually) without having our names get splattered on everyone's mailing lists.  (More info here:  http://the-military-guide.com/2011/07/28/charitable-gift-funds/)

When I retired (over a decade ago) I fantasized that I'd be volunteering regularly at places like Habitat for Humanity or military memorials/museums.  The reality has been less than the fantasy.  I haven't made the time for HFH because we've been working on our own habitat.  I've been treasurer of a small non-profit, and it was not exactly the fulfillment I thought it would be.  Spouse volunteered at a couple of non-profits for several years and has had several negative experiences (mostly lack of board involvement compounded by employee mismanagement) that have been very disillusioning.  In general the required effort and the due diligence have far exceeded the rewards.  We'd much rather donate our money (we have more than we need) than our time (which we've been guarding rather jealously).

When I wrote the book and started the blog, it didn't seem appropriate to make a profit from military servicemembers (and veterans and their families) to show them how to reach financial independence.  I wanted lots of reader stories and their advice.  I wanted to maintain my FI credibility without coming across as a huckster of "Buy my book and I'll show you how to get rich!"  For all of those reasons, I decided to donate all of the revenue to military charities chosen by the people who shared their stories/advice for the book & blog-- currently Wounded Warrior Project and Fisher House Foundation.  That was just over $2000 in 2012 and it'll probably be a little higher in 2013.  I've discovered that I'm much happier writing for charity than any other way of donating my labor.

I've come across some good resources in my reading, beyond the "usual suspects":
Bridgespan:  http://www.bridgespan.org/Home.aspx
GiveWell:  http://www.givewell.org/
Give Smart:  http://the-military-guide.com/2012/03/07/book-review-give-smart/
The Life You Can Save:  http://www.mrmoneymustache.com/2012/09/29/weekend-edition-the-life-you-can-save/ and
http://the-military-guide.com/2012/11/22/book-review-the-life-you-can-save/
Judy Martel's "Dilemmas of Family Wealth":  http://the-military-guide.com/2011/09/26/book-report-dilemmas-of-family-wealth/

I'm about a third into "Giving 2.0", and it's pretty good.  I'll have a better opinion when I've finished it.

[mustachecat]

I do donate, but I don't have a budget line for it. It was probably less than $1,000 in 2012, though. I also donate time, although it's sporadic.

As someone that works at a nonprofit, I urge everyone to take a look at your intended charity's 990, which is an annual filing with the IRS. There is a lot of... leeway in how one fills out 990s, and honestly, much of it can be opaque. But take a look at the hard numbers. How much is the executive director making? Are Board members being compensated (this is unusual)? Are Board members and/or executive staff also receiving compensation from related organizations? What was the filing year's deficit or surplus? How much information does the nonprofit disclose about how they spend their funds? I've seen three-word answers and three-page answers. Which one satisfies you?

All 990s are publicly available on Guidestar.org, although you need to register (it's free) to access them. Charity Navigator has its own ranking system, but taking a look at the data yourself is the only way to, well, know for yourself.

My favorite kind of volunteer work is working directly with people, but I don't really get a chance these days. I used to work exclusively in nonprofit fundraising, so most organizations wanted help with fundraising, not program services. Oh, well. You do what you can.