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5 Keys to Smart Charitable Giving

"If you haven't got charity in your heart, you have the worst kind of heart trouble."

–Bob Hope

Anytime is a good time to get out your checkbook to support the worthy charitable causes of your choice.

As I've said all along, being smart about money and living a more frugal lifestyle isn't about being greedy, dishonest, or stingy toward others. Ultimately, it's about choosing to spend wisely and to consume less ourselves so that we have more—of both treasure and time—to share with those we love and those who need our help.

For a new book I'm writing, I recently surveyed hundreds of fellow "cheapskates"—as I've defined that term. I've discovered that on average, cheapskates give significantly more to charities (about 5 percent of their income) than the national average most of Americans (less than 3 percent). What isn't surprising is that when most cheapskates donate to charity, they want to do it the smart way and get the most bang for their donated bucks.

Here's how they do it:

Check out the charity first: View charitable giving as investing in social good, and exercise due diligence just as you would before making any other investment. Web sites such as and provide a wealth of information on thousands of charitable organizations. They can help you evaluate a charity's financial stability, funding, governance and ethical practices, and even the fairness of the CEO's compensation. In the end, the decision of which organizations you support is up to you, but do your homework first.

Double your donation with a matching gift: Many companies match donations made by their employees to qualified nonprofit organizations, dollar for dollar, up to a specified limit. Charities occasionally have a source of matching funds (for instance, a matching grant or a generous individual donor), which can also allow you to effortlessly double your support. Of course, you can also truly "double-down" and be the source of a matching gift yourself by offering to match the gifts of others to a charity of your choice. This is a great way to leverage the spirit of giving and your donation.

Consider making an unrestricted donation: Many people want to be assured that their donation to a charity will be used for a specific purpose or program and not for "overhead" or other general purposes. While this is understandable from a donor's perspective, it often hamstrings the organization; in the end, the restriction doesn't allow the best use of the limited financial resources available to most nonprofit groups. Once you're satisfied the organization is a good steward of its funds, trust it to do what is best with your donation. Consider giving an unrestricted gift to support the breadth of an organization's good work.

Volunteer for a firsthand look: During the 25 years I managed nonprofit organizations, supporters often asked me whether I'd prefer they make a financial donation or volunteer their time. My answer was always the same: "Both." Most charitable organizations depend on donations of both money and time—in the form of volunteer labor—to carry out their important work. Not only can volunteering be fun and rewarding, but it's also one of the best ways to get a true feel for a charitable organization, to evaluate whether or not it also deserves your financial support.

Know the tax implications: Generally speaking, donations of cash and property to qualified nonprofit organizations are tax-deductible, although IRS regulations regarding the tax implications of charitable giving are complicated. Consult a tax professional and IRS Publication 526 regarding your individual financial situation.

Donations should be made no later than Dec. 31 of the year in which the deduction is claimed.

According to the IRS Web site, "To claim a deduction for contributions of cash or property equaling $250 or more, you must obtain a written acknowledgment from the qualified organization showing the amount of the cash and a description of any property contributed, and whether the organization provided any goods or services in exchange for the gift."

And finally, it's easier than ever before to make a donation on behalf of someone else and to let them choose which organization they wish to support: See and for flexible giving programs that allow you to instill charity in the hearts of others.

Jeff Yeager is the author of the book, "The Ultimate Cheapskate's Road Map to True Riches." His Web site is