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Get More Out of Your Charitable Giving

Wise ways to support great causes

Hands holding money

Jamie Grill/Getty Images

'Tis the season of gifts — and not only those wrapped with a bow or sealed in a tin. About a third of all charitable giving occurs in December, surveys show.

Even if the timing is driven as much by tax savings as by the spirit of the holidays, scientific research backs up the idea that we really do receive when we give. In fact, such acts of altruism have been shown on MRI scans to light up the same areas in the brain that are activated by food and sex.

Still, when it comes to the gifts you seal with your signature, chances are high you could be getting more from your donations: more joy, more of a sense of accomplishment and more personal fulfillment.

So before sitting down with your checkbook in the next few weeks, take a little time to consider your overall giving plan and how to maximize your impact — including the impact on your own well-being.

Limit your causes

How to go from where most of us are now — supporting many charities somewhat haphazardly — to finding a deeper sense of satisfaction and connection from our donations? One approach experts recommend is focusing on a smaller number of organizations but getting involved in each wholeheartedly.

To do this, you'll need to narrow down all the issues that are important to you (animal welfare, environmental protection, education for girls, food for the needy…!) to one or two deep concerns. “Think of your values and beliefs and ask yourself, ‘Is there anything more important than that?’ Keep going with the question until you get to your highest priority to support,” says Andrew Sivertsen, financial planner at the Planning Center in Moline, Ill. Choosing your biggest concern might be as emotional as it is pragmatic; you know there’s great need in the world, but perhaps there are one or two causes that tend to keep you up at night. Focus on those.

Research the short list

After you’ve narrowed down your priorities, the next step is choosing a specific organization making progress on the issue you care most about. You can do that with the help of online tools such as Charity Navigator, GiveWell and the BBB Wise Giving Alliance, all of which collect data and rate organizations.

"When comparing charities, don’t entirely rule out those that spend some of their budget on overhead,” says Una Osili, associate dean of research at the Lilly School of Philanthropy at Indiana University. “Nonprofits need funding to pay staff and keep the lights on and hire an accountant,” she says, adding that such overhead can also vary widely depending on the type of work an organization does. “Focus on the mission of the organization versus the fraction of the budget devoted to administrative costs.”

Experts say you’ll also be happiest knowing exactly where your money is going. Giving to specific projects within larger organizations is one way you can feel more connected to an organization’s mission. Nonprofits such as UNICEF USA and Heifer International, for instance, let you choose from a list of options to direct funds to specific places or projects, so that you can support Syrian refugee children, for example, or give a goat for a needy family in Zanzibar.  

Keep tabs and get involved

Once you’ve decided where your money is going, experts say that staying on top of a group’s progress and, ideally, being involved in its mission will give you more lasting rewards than simply signing a check. Read your chosen charity’s newsletters, visit its website or Facebook page, attend its events, become a volunteer — maybe even spread the word among friends and family about the group's mission and why you’re supporting it. “Research shows donors get the most satisfaction and fulfillment when they’re engaged and connected with the organization,” Osili says.

Sivertsen also notes that studies show you’ll get more of a bump from deliberating sending monthly gifts throughout the year than you will by sending a single yearly donation or signing up for auto-give programs (though those automatic monthly charges to your credit card are a foolproof way to give regularly and stay on budget).

Practice saying no

And now, the really hard part: staying focused when other needy organizations come calling. “You have to know that whatever you give to that [new group] is going to take away from the charities you’ve identified to support,” Sivertsen says.

And of course you have to know how much you can afford to donate to anyone in a year, which means you need to set a budget for donations, just like any other spending category. You can think about your giving bucket as a percentage of income (especially helpful if your income fluctuates) or a set dollar amount.

As for handling the awkwardness that comes with coworkers or relatives asking for donations to causes they support: “If you’re giving because you don’t want to say no, it might be a good idea to have a policy about small gifts,” Sivertsen says.

That might mean giving a token amount anytime someone asks (though you should include an estimated total of these small amounts in your budget). Or it might mean coming up with a thoughtful response that allows you to decline purposefully. As Sivertsen says, you might offer up something like, “I know you guys are doing wonderful things with that organization, but the thing most dear to me is [this cause], and all of my gifts go to that.”