It’s good to give, but it’s even better to budget for charity.
Charitable giving is a good thing. However, mostÂ people don’t include their charitable giving as part of their financial planning. With the holiday season approaching, a peak period for solicitations, here’s what to do to change that:
1. Determine how much you want to give annually.
Decide now how much your household plans to give and to what causesâ€”including tithing at church and donations to charityâ€”for this season and for next year. Focus on the causes you care about; just because a charity is worthy, doesn’t mean you should feel obligated to give.
When you budget for charity, you become clear on what you can afford, and you are more likely to follow through on your commitment to give.
2. Build your annual donations into your household budget.
Next, break those planned gifts down into weekly or monthly installments, and build them into your spending plan, just as you would any other bill or expense. Each quarter, make an assessment, and reallocate your giving based on your financial situation.
3. Maintain organized records of your giving.
Get receipts for all of your givingâ€”both for your own records and for tax purposes. Your purpose for giving may not be for a tax deduction, but that doesn’t mean you shouldn’t claim it, if you are so entitled.
Don’t forget to document non-monetary gifts, such as mileage on your car and clothing donations to charities recognized by the IRS. Get copies of proof of the tax-exempt status of the organizations you donate to, to keep on file with receipts and other documentation of your contributions.
4. Watch out for charity scams.
Never give to any charity that you are not familiar with and have not investigated for yourself. Make sure you get the actual name, address, and phone number of the charity, before giving. Then, check it out by going to the IRS website, which has an updated list of legitimate charities and nonprofit groups. You may also call the IRS toll-free at 877-829-5500.
Another useful website to verify the legitimacy of a charity isÂ www.give.org, which is part of theÂ Better Business Bureauâ€™s Wise Giving Alliance. Also, check out two great websites that review and grade individual charities: www.Charitywatch.orgÂ andÂ www.CharityNavigator.org.
The best part of planning your gifts? When you budget for charity, you have a guilt-free reason to say ‘No’ to unexpected solicitations: “It’s not in your budget to give now. My charitable donations are budgeted for the year. However, I am certainly willing to consider your causeÂ for next year’s budget.”
Black Enterprise Executive Editor-At-Large Alfred Edmond Jr. is an award-winning business and financial journalist, media executive, entrepreneurship expert, personal growth/relationships coach, and co-founder ofÂ Grown Zone,Â a multimedia initiative focused on personalÂ growth and healthy decision-making. Follow him on Twitter atÂ @AlfredEdmondJr.