Even charitable giving benefits from a budget plan!

Planning and budgeting our annual expenditures is a common activity, but how many of us actually plan and budget our charitable giving?

The new year is a great time for professional advisors to urge their clients to assess (or reassess) charitable giving with the goal of supporting favorite charities and also remaining fiscally cautious. With intentionality and a little planning, this strategy also helps the nonprofit organizations.

Benefits of a year-long giving strategy include:

  • Helping nonprofit organizations meet their budgets throughout the year, which can save staff from concern about meeting constituents’ ongoing needs.
  • Avoiding the year-end scramble and making your tax-deductible gift available this year instead of next (for example, those making a QCD from an IRA directly to an unrestricted or field-of-interest fund at TCF would be providing fiscal benefits to those organizations in this calendar year).
  • Increasing predictability of cash flow (your own and the nonprofits) and therefore being proactive, not reactive, with your support.
  • Providing time to include children and grandchildren as a learning experience.
  • Exploring options for more complex gifts, such as closely-held business interests or charitable remainder trusts, that might provide tax benefits as well as meet charitable goals (rather than waiting until the last minute!).

Here’s a sample evaluation process to help clients assess their charitable budget:

  1. Review all your charitable donations from the last three years and compile totals for each organization. (TCF fundholders can check this information through their donor portal.)
  2. Then, think about these questions. The answers could help determine whether to continue your support at historic levels or consider putting your donation on hold to revisit at another time.
  • Which charities are the most important to you?
  • Are you personally involved (serving on the board of directors or a regular volunteer)? You may wish to continue your historic lel
  • Are there any organizations on your list that you supported primarily because the organization was raising money for a capital campaign, or because you were helping out a friend who is involved with that organization?
  • Are you comfortable with what you know about the organization, its leadership and its mission and vision? Are dollars being deployed towards programs in a way you understand and support?
  • Are there any new organizations you’re interested in supporting?
  1. Add up your total giving over the last three years and then divide it by three to get your average. Is that number doable this year? If not, reduce it to a level that fits within your financial situation. Or, if you expect your income and assets to increase this year, consider taking your charitable giving budget up a notch.
  2. Set a target for the total amount of support you wish to provide for each organization and the timing of that gift.
  3. Keep in mind that TCF can help with the discovery and discernment process as well as provide insight into how your gift might help the organization. (For example, organizations may be able to use your gift to leverage even more donations as a match or challenge during April’s Great Community Give.)

Don’t forget to review our Giving Back Guide, which includes mission, history and impact information of 65 local organizations!