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Charitable Giving: To Give or Not to Give, That is The Question

Sign that reads "donate here" encourages charitable giving.

Giving money away is something we all aspire to do. Sometimes, it’s not a wise choice while other times, we can afford to double or even triple our current donations.

Charity is a very subjective topic. While your values, perceptions, and even your religion play a role, this article will only discuss the financial implications of charitable giving. How much (if any) should you give? When should you start giving? When should you stop? How should you choose a financially stable organization for your donated dollar? We’ve got answers

To Give or Not to Give

Requests to help others are abundant these days. Everywhere you look, someone needs your help. From neglected animals to the local food bank to displaced refugees in war-torn countries—there is no shortage of crises to assist. However, before breaking out that checkbook, you should be sure you’re financially stable.

What does financial stability look like? Good question. Here are a few things you may want to look for as you assess your own ability to help others:

  • Do you have an emergency fund? It wouldn’t be good to donate, only to be the one needing help just a few months later.
  • How much debt do you have? You don’t need to be completely debt-free to engage in charitable giving—but debt is a factor. You shouldn’t be overwhelmed with debt while contributing to the rehabilitation of others.
  • Do you stick to a budget? Consistently spending less than you earn is imperative to being able to help others.

If you’re not confident in your own ability to stay within your monthly bills, including “paying yourself” by saving for the future, call a non-profit financial counselor today to get on the right path. Holding off on check-writing for noble causes doesn’t mean you can’t still donate. If you have time and energy to contribute to a good cause, consider volunteering instead.

Signs You Can GiveMore

Some folks can afford to up their regular charitable giving, and you may be one of those people. Here are a few indications you’re poised to head that direction:

  • Credit cards are a tool for earning points and building credit. You haven’t needed one in years, but you’ve used them for their perks.
  • If your job suddenly disappeared today, you’d be all right for a while. You’re confident in your earning potential (trade certifications, skills, experience, professional network, and formal education). You could get another job quickly or have plenty of cash to live on comfortably until you land another gig.
  • You consistently save for emergencies and retirement. A double-digit percentage of your paycheck goes to retirement savings, so that when you can’t work anymore, you’re not the one receiving charity.
  • You don’t feel the need to escape from problems by spending money. Spending neither “liberates” you from life’s pressures, nor does it make you feel guilty. Instead, it’s just another thing to manage – it’s a resource to you like your time or health.

Vetting Non-Profits

Now that you’re ready to give or increase your giving, it’s time to choose a charity. You may already have one on your mind, or you may want to see a list of options. Either way, spend some time on the Federal Trade Commission’s Charitable Giving website to learn about the best way to identify a solid charity—as well as how to avoid a scam.

If you’re not in a place to financially give, let CESI Solutions help you get there. One of our credit counselors can help get you on your way to financial freedom.

Image Source: Flickr


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